Thursday, 28 April 2011 11:52
Here's Laura Olson's breaking news story on the Marcellus Shale impact fee proposal unveiled by Senate leader Joe Scarnati:
HARRISBURG -- Unveiling his much-awaited proposed local impact fee on gas drillers, Senate President Pro Tem Joe Scarnati said he believes his plan, or an adaptation of it, should be passed with the state budget in June.
The proposal would assess a base fee of $10,000 per well, a figure that would rise based on production and natural-gas prices. Revenue would be collected by the state Public Utility Commission, and distributed to local governments, conservation districts, and for statewide environmental and infrastructure projects.
While the breakdown for each of those recipients is still rough, he told reporters this morning that he would like to see 60 percent go back to drilling-heavy communities. The top Senate Republican also said his fee would be retroactive, accounting for drilling activity last year when lawmakers failed to agree on a severance tax plan.
Gov. Tom Corbett opposes a state severance tax, but has said he will consider a local fee to alleviate impacts from drilling.
Mr. Scarnati said that there is "political pressure" on lawmakers to approve a fee to end a debate that has been on-going for more than two years.
"I cannot see how we get a state budget done with the cuts that are occurring in so many lines without addressing an impact fee for this industry," said Mr. Scarnati, of Jefferson County.
He said he talked with the governor earlier this week about gas drilling impacts, and said he tried to craft his plan around Mr. Corbett's opposition to any money going to the state's general fund.
"I have a caution light" from the governor, he said. "I don't have a red light; I don't have a green light."
Mr. Scarnati and other Senate Republicans last year supported a state tax that would have assessed drillers at 1.5 percent for the first five years of a well's production, and 5 percent after that. Mr. Scarnati described his new proposal as a "much better plan" that would bring in significantly more revenue.
Estimates from his staff showed the fee raising $45 million from wells that were producing last year, $76 million this year and $103 million in 2012. Last year's Senate GOP tax rate was projected to raise $56.8 million in 2012, which Mr. Scarnati said was lower due to a number of exemptions for capital costs.
Of the portion that will go to local government, he is proposing this distribution: 36 percent to counties with producing Marcellus Shale gas wells; 37 percent to municipalities with wells; and 27 percent to municipalities with no producing sites but are in a county with wells.
He also would prohibit municipalities, like Pittsburgh, that have adopted zoning ordinances prohibiting drilling from receiving funding from the fee. The PUC would be required to publish a "model zoning ordinance" with certain standards to be laid out in his bill, as a comparison to determine if a municipality has a prohibitive ordinance.