House Republicans introduced their own drilling fee and Marcellus Shale environmental protection proposal-- House Bill 1950 (Ellis-R-Butler)-- Tuesday and just hours later on Wednesday the 127-page bill was reported out of the House Finance Committee by a vote of 15 to 10-- Republicans in favor, Democrats opposed.
The bill includes the county-adopted drilling fee proposed by Gov. Corbett and the additional environmental protection measures he announced in his Marcellus Shale proposal in October, including a blanket provision preempting local regulation of drilling as a land use.
As with the Governor's proposal, the money raised through the optional county drilling fees would be split between the local communities in which the fee is enacted and the Commonwealth, with 25 percent of the revenues going to the state and 75 percent remaining at the local level.
Of the state’s share, 70 percent would be used to fund road and bridge repairs related to well impacts. The remaining 30 percent would be split up among environmental programs, health initiatives and state emergency response activities.
Of the 75 percent of revenues that would go to the local governments, 36 percent would go to the county in which the well is located, 37 percent would go to the municipality in which the well is located, and 27 percent would be distributed to all municipalities within the host county using a formula based on miles of highway and population.
This proposal from Rep. Ellis is significantly different from a drilling fee proposal he introduced in June-- House Bill 1715-- which called for a uniform statewide fee starting at $25,000 per well with the proceeds divided between counties, other local governments and school districts hosting Marcellus drilling.
A provision added to House Bill 1950 would also transfer funds out of DCNR's Oil and Gas Fund to finance the Environmental Stewardship (Growing Greener) Fund as expanded by Gov. Rendell to include alternative energy and economic development projects like parking garages. It is not the narrowly focused priorities established in the original Growing Greener Program proposed by Gov. Ridge-- mine reclamation, watershed restoration, farmland preservation and wastewater and drinking water projects.
Transfers would also be used to fund county conservation districts, the Hazardous Sites Cleanup Fund and increase in-lieu of tax payments for state owned land.
A summary of the bill is available online.
“This legislation (House Bill 1950) would enact a competitive local option impact fee that would help to protect our environment and deal with the effects of harvesting natural gas without driving good-paying jobs out of our economy,” Rep. Kerry Benninghoff (R-Centre), Majority Chair of the House Finance Committee said. “The majority of people in Pennsylvania want to see us take some action on this issue. Today, we took the first step toward enacting a responsible bill that would benefit all Pennsylvanians.
“The reality we are dealing with is that we need a plan that can get 102 votes in the House, 26 votes in the Senate and the signature of the governor,” Rep. Benninghoff added. “We passed a responsible, competitive, realistic plan out of committee.”
“This legislation (House Bill 1950) would enact a competitive local option impact fee that would help to protect our environment and deal with the effects of harvesting natural gas without driving good-paying jobs out of our economy,” Rep. Kerry Benninghoff (R-Centre), Majority Chair of the House Finance Committee said. “The majority of people in Pennsylvania want to see us take some action on this issue. Today, we took the first step toward enacting a responsible bill that would benefit all Pennsylvanians.
“The reality we are dealing with is that we need a plan that can get 102 votes in the House, 26 votes in the Senate and the signature of the governor,” Rep. Benninghoff added. “We passed a responsible, competitive, realistic plan out of committee.”
The Minority Chair of the House Finance Committee, Rep. Phyllis Mundy (D-Luzerne) said, "This is an extremely weak, ill-conceived bill. The consequences for local residents could be terrible. Not only do local governments lose local control, but there is little in place to protect residents, the environment and property values. And to make matters worse, the proposed fee is structured to create winners and losers. Unfortunately, Luzerne County would be one of the losers."
Rep. Mundy said she fears that local governments would be dealing with similar scenarios such as one that happened near her legislative district, where an oil and gas company proposed building a natural gas metering station near the Dallas Area School District campus.
"A combination of zoning regulations and public outcry prompted the project to be moved further away from the campus. But if this bill becomes law, the drilling industry could dictate to local government where it will do business.
"The natural gas industry has a large, expensive impact on our Commonwealth, and that's simply not enough. Taxpayers have been footing the bill for the coal industry for years, and that shouldn't happen again with the gas industry."
In reaction to the House action, Gov. Corbett said, "I applaud House Finance Committee members for moving this important measure. This bill contains many of the provisions contained in our proposal, and I am pleased to see the legislature working toward a final bill."
The Governor added he looks forward to continued discussions with the General Assembly that will lead to a strong and sensible Marcellus Shale legislative package.
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