Democrats said bill does not collect enough revenue
By Eric Boehm | PA Independent
HARRISBURG — House Republicans moved ahead with a natural gas drilling impact fee plan that, they said, strikes a balance between protecting the state and allowing the growing industry to continue adding jobs.
The new impact fee plan reflects the recommendations of Gov. Tom Corbett’s Marcellus shale commission by implementing a county-level fee of up to $40,000 per well over a 10-year period, with 75 percent of the revenue remaining with local governments in the areas where drilling takes place.
The remaining 25 percent would fund various state government departments and agencies, with the majority of it earmarked for the state Department of Transportation to pay for infrastructure repairs.
Another portion of the revenue would be directed to the state Department of Environmental Protection for the purpose of plugging abandoned wells and regulating active wells.
Democratic committee members decried the bill, passed Wednesday morning, as a giveaway to the natural gas industry because the fee was not high enough.
“We’re calling this the ‘drill, baby, drill’ bill,” said state Rep. Phyllis Mundy, D-Luzerne, the minority chairwoman of the House Finance Committee. “You have managed to benefit the industry while providing the least possible benefit to Pennsylvania citizens to protect their land, their water, their air and their property values.”
Under the proposal, the fee for a single well would net a total of $160,000 for state and local governments over a 10-year period, which Mundy said would equate to about 1 percent of the revenue a natural gas company would generate from the same well.
State Rep. Eli Evankovich, R-Armstrong, said the amount of money an industry makes should not be taken into account when developing tax policy.
“We don’t tax grocery stores for the products they put on their shelves; we tax them for the money they make on sales,” Evankovich said. “I think we should be taxing natural gas extraction the same way that we tax every other industry.”
"I'm not aware of any grocery stores that have ruined water wells or spilled toxic chemicals onto the land and into our streams," Mundy responded.
The state House Finance Committee approved the bill with a straight party-line vote of 15-10. The bill will be sent to the House Appropriations Committee next.
The bill also contains language that would override local zoning ordinances regarding where natural gas drilling can occur. The natural gas industry has been asking the state to clarify this complicated issue, because many of the more than 1,400 municipalities within the Marcellus shale footprint have their own laws regarding where well sites can be placed.
About half of those townships and boroughs have natural gas drilling zoning rules, which address fencing, lighting, security, access, signage and atmospheric discharges, among other issues, said state Rep. Brian Ellis, R-Butler.
Michael Savage, chairman of the Rush Township Board of Supervisors, said the Centre County Township should have control over its zoning laws. The township is considering a pair of ordinances that would prevent natural gas drilling from taking place, either directly or indirectly.
“That's the wonderfulness of federalism," Savage said. “I don’t mean to be glib about it, but if local governments are really supposed to be responsible for what goes on in their jurisdictions, then they have to be able to take care of it."
The 120-page bill was made public at 6 p.m. Tuesday for the 10 a.m. Wednesday committee meeting, which Democrats said was not enough time to review it.
“I think that enough substantial issues have been raised that it warrants us to not have a rush to judgment,” said state Rep. Richard Mirabito, D-Lycoming.
But the legislation will have to pass through the House Appropriations Committee before it can be put up for a floor vote, and no session days are scheduled until Nov. 14.
State Rep. Kerry Benninghoff, R-Centre, committee chairman, said the bill focused on keeping the industry active in the state, where it has created 44,000 direct jobs to keep Pennsylvania’s unemployment rate of 8.3 percent, which is below the national average of 9.1 percent.
“The reality is that it is the fastest growing job creator in the commonwealth,” Benninghoff said.
Patrick Henderson, the governor’s energy executive, said the administration was pleased with the bill’s progress.
The state Senate is close to passing its own impact fee bill that also would address environmental regulations and zoning provisions. That bill is awaiting a vote from the Senate Appropriations Committee, but will be amended at least once before the vote is taken.
Monday, the Senate canceled a planned meeting to amend that bill and postponed it for at least two weeks. Now, the House has taken up the issue.
“This is a collection of proposals that can be passed by both chambers," said Benninghoff.
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