Negotiations still taking place between GOP leaders, Corbett
By Eric Boehm | PA Independent
HARRISBURG — The General Assembly is inching closer to agreeing on a natural gas drilling fee and environmental rules for gas companies operating in the state, but the key sticking point is who will collect the fee.
Senate President Joe Scarnati, R-Jefferson, said state senators still were divided over Gov. Tom Corbett's plan to have counties that host drilling collect the fee. This proposal is included in a House-passed impact fee bill.
A separate, Senate-passed measure would have the state collect the fee, which proponents argue allows for more uniform taxation.
“Many of our members believe that a county-by-county fee is not good policy,” Scarnati said Wednesday. “If we want to be business friendly, we have to do it statewide."
Republican leaders of the state Senate and state House, along with Corbett’s staff, are working out the details of the final bill in closed-door meetings before it is put into legislation.
The House and Senate passed separate natural gas drilling bills last month — less than 72 hours apart — after more than three years of legislative work on the issue.
But the bills differ on various issues, including the fee structure. The Senate wants a per-well fee of $360,000 over 20 years, while the House has proposed a per-well fee of $160,000 over 10 years.
The bills also set different standards on environmental issues, such as setbacks between drilling sites and waterways.
The House bill — based on Corbett’s Marcellus Shale Commission report — gives counties with drilling the authority to collect the fee and keeps 75 percent of the revenue at the local level.
The Senate bill, however, would have the state collect the fee and distribute only 55 percent to local municipalities. The remaining revenue would be divided between various state level agencies and departments related to gas drilling.
Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group, said her member companies were more concerned with the cost of the fee than the administrative process of it and would be willing to deal with different structures in different counties.
"The most important thing is to keep this competitive so the capital and the investments continue to flow into Pennsylvania," Klaber said. "At the end of the day, where the fee is collected is not as much of a concern."
With Republicans negotiating the final product now that bills have passed both the House and Senate, Democrats are left to criticize what they see as shortfalls in the two competing plans.
“I think that it comes up a little short for the taxpayers,” state Sen. John Blake, D-Lackawanna, said of the Senate proposal, which he said should include a higher fee and larger setback requirements. “I voted against it, not because of what it does, but what it doesn’t do.”
On the House side, State Rep. Greg Vitali, D-Delaware, said both bills were "woefully inadequate" regarding revenue and environmental protection.
The Senate Environmental Committee on Wednesday amended House Bill 1950, which the state House passed last month, to reflect language in a different shale fee passed by the state Senate last month as well. The bill was moved out of committee Wednesday, so the Senate could vote on it by early next week. Senate rules require a bill to be on the calendar for three days before a vote on final passage can be held.
Scarnati said committee members were willing to “get this done as quickly as possible,” once a final agreement was reached with the House and governor.
“The goal here is to get everybody herded in the same direction,” Scarnati said. “Our goal is to protect the environment and to preserve the industry in Pennsylvania.
Democrats want the fee structure to generate more revenue, require greater distance, or setback, between wells and waterways, and eliminate provisions that would pre-empt local zoning laws for drilling, said Senate Minority Leader Jay Costa, D-Allegheny.
And the final piece to the puzzle is lawmakers from the southeastern part of the state — where there is no Marcellus shale and therefore no gas drilling — who want some of the revenue from the fee or at least use some that revenue to fund environmental programs like Growing Greener and the Hazardous Site Cleanup Fund, which helps deal with industrial waste.
“The fact that the bill is moving is good, but I don’t like their bill and I think we did a better job,” said Rep. Kate Harper, R-Montgomery.
The House and Senate bills, as currently written, focus the revenue exclusively on the parts of the state where drilling is taking place. Corbett also supports that approach.
