The Senate Environmental Resources and Energy Committee, chaired by Sen. Mary Jo White (R-Venango), today approved amended legislation that would impose an impact fee on natural gas drilling in Pennsylvania.
As amended by the Committee, Senate Bill 1100 (Scarnati-R-Jefferson) would set the fee at a flat $40,000 in the first year of production, followed by $30,000 in year two and $20,000 in year three. A fee of $10,000 would be assessed from years four through 10.
Sen. White said the schedule reflects the decrease in community impacts as the well production decreases. Of the revenue collected, 60 percent would go to local and county governments with drilling activity, and 40 percent would go for environmental and safety initiatives.
The amended bill also sets aside $1 million a year for training and equipment for emergency responders in Marcellus Shale drilling areas, and would allow drillers a credit of up to 30 percent of their fee if they donate to affordable housing programs.
“We want to be clear to distinguish an impact fee from a tax. A fee is tailored to defray the cost of an activity, while a tax is levied on an activity and the revenue redistributed elsewhere – a redistribution of income,” said Sen. White. “We’ve all been put on notice that there will be no new taxes. This is an attempt to provide some relief to communities that experience direct impacts due to drilling.”
If a severance tax is enacted in the future, the fee would be rescinded.
“This measure is not a final product. This is an attempt to put forth a real proposal for industry, community and legislative comment,” said Sen. White.
More information is available on the Committee's website.