A hearing sponsored by the House Finance Committee into legislation that would impose an impact fee on natural gas drillers is scheduled for July 19 in Lycoming County. A report from Governor Corbett’s Marcellus Shale Advisory Commission on the impact the drilling has on local government infrastructure is due July 21.
“We weren’t really thinking about the report when we planned the hearings,” said a House Republican caucus spokesperson. “The point of the hearing is to review the impact fee proposals already in the House.”
House and Senate GOP leaders have said that the report from the Governor’s shale commission will have little, if any, effect on the fee legislation they consider. The Governor, for his part, said he did not want to see impact fee legislation in front of him before the Commission released its findings. The Governor’s position was one of the key reasons impact fee legislation was not approved with the budget at the end of June.
In the Senate, legislation, SB 1100, that would place a flat fee on each well -- a fee that would decrease as the well ages -- cleared the Senate Environmental Resources & Energy Committee in the Spring. Under the bill, the host local governments and state-level environmental funds would receive the funds. The bill awaits action in the Senate Appropriations Committee.
On the House side, a proposal gaining some early traction would send all the money raised through the fees – $50,000 per well the first year and decreasing after that – to the host counties, townships and boroughs. State-level environment programs would receive additional funding from the Oil and Gas Lease Fund, which is in turn funded by lease and royalty money from wells on state land.
“The balance in the Oil and Gas fund will explode was more wells are drilled,” said a staffer with state Rep. Dave Reed, R-Indiana, who sponsored the legislation. “There will be more than enough there to fund the environmental programs.”
Directing all the money to the local governments would avoid any criticism of raising taxes to benefit state-level programs.
An official with a natural gas driller said that they are “okay” with a fee provided it lessens as a well ages.
“The local impact falls off as the well ages because you just don’t have the same level of activity,” said the official who did not want to be identified. “If the impact falls off, the fee should as well.”