Mixed views
Unfortunately, one of the most important measures affecting our region in decades passed both the state House and Senate last week without the support of a single local lawmaker.
The two bodies passed separate bills imposing fees and regulations on the Marcellus shale industry, largely based on party affiliation with Republicans supporting them and Democrats opposing them.
However, even though the measures have the support of Republicans there are major differences between the two bills, and they will have to be resolved with the help of GOP Gov. Tom Corbett before either of the proposals become law. Facing a Dec. 31 deadline, it’s possible that the deadlock might not be resolved, meaning the whole process would have to start over on Jan. 1.
One point, though, that Republicans and Democrats in both bodies and Corbett agree on is that some type of “impact fee” is needed. But that was about the only thing they could reach a consensus on.
They even differed over the term “impact fee” with Democrats claiming Republicans were trying to disguise a tax increase with semantics.
But the real disagreement was over how much of an “impact fee” is needed and how the revenue should be used. Both Senate and House Democrats claimed that the “impact fee” wasn’t large enough and wouldn’t generate enough funds for environmental programs and community impacts. Republicans in the House and Senate disagreed with themselves, mainly over the size of the fee.
The House bill levies a $40,000 impact fee during a well’s first year of operation, decreasing annually to $10,000 in years four through 10. After that, the fee would cease to exist.
Under the Senate bill, the impact fee would be $50,000 for the first year, decreasing annually by $10,000 from the fourth year to the tenth year. The fee would be $10,000 annually from year 11 to year 20 and disappear after that.
The House bill would also give counties the option of imposing fees, while under the Senate measure, the fees would be mandated statewide.
More important for local residents, under the House bill local municipalities involved in the Marcellus shale industry would get 75 percent of the impact fee revenues with the remaining 25 percent going to various state programs.
The Senate bill would give local municipalities 55 percent of the revenues with the remaining 45 percent going to the state.
Republicans in both the Senate and House do agree, though, that local officials shouldn’t have final control over zoning issues related to the Marcellus shale industry. Democrats had strenuously fought to allow local officials more say-so in zoning, but were rebuffed.
Republican legislators and Corbett had initially backed measures to keep all local input out of zoning, contending consistent and uniform regulation was needed for the industry to grow. However, a compromise of sorts was reached on this hot issue as both bills passed with identical language. Under the proposals, a well driller can ask the attorney general to determine whether a proposed gas ordinance is “reasonable” or not. If a municipality persists in keeping that ordinance, it would lose out on any impact fee revenue.
The measure would increase the setback distance between a well and any nearby waterways or buildings, boost bonding requirements and penalties, and increase the required information to be released on hydraulic fracturing chemicals.
From our point of view, imposing any tax or “impact fee” would be preferable to doing nothing. Certainly the worst thing that could happen would be for the Republicans to not pass any sort of legislation.
As far as the two bills, we see good and bad in both of them and would prefer some type of hybrid to eventually be passed.
On the amount of the fees, we definitely agree with the Senate bill, which would raise much more money than the House measure.
Despite Corbett’s comments to the contrary, the Marcellus shale is here, and it’s not going anywhere. There’s no way companies involved in this industry will leave until the Marcellus shale is drilled out. Simply put, our legislators need to get as much money as they can for this precious natural resource.
We also agree with the Senate bill that would mandate a statewide fee for all wells across the state. We think letting counties decide whether they want to impose a fee would only lead to problems. Imagine Fayette County imposing a fee and Greene County not doing it. It could lead to businesses leaving Fayette County and in the end all taxpayers would suffer from a loss of revenues.
However, we agree with the House measure on where the money should go. It’s important that the money go to the municipalities involved in the drilling. While it would be nice to share this revenue with everyone in the state, communities affected by the drilling will need this money to take care of all the problems associated with it.
Residents in our area have a particular interest in this issue. We saw the horrific problems caused by the coal industry in the past and need to be reassured that nothing like that will happen with the Marcellus shale development.
The money must be there to fix whatever problems come up. And rest assured there will be problems.
Unfortunately, the zoning issue has already been decided to the detriment of local residents. It’s somewhat ironic that Republicans always push for local control until it’s something related to business and industry.
It’s good to see that some restrictions and penalties will be increased and enforced statewide, but you have to wonder why the Republicans don’t trust local residents to make the right call on the important zoning issue.
In the end, despite our local lawmakers not having much say in the final passage of this bill, this is something that all local residents should watch with deep care and concern. Good or bad, this legislation will have a tremendous impact on our future.