Committee Approves Scarnati's Marcellus Shale Impact Fee Proposal

Harrisburg – The Senate Environmental Resources and Energy Committee, chaired by Sen. Mary Jo White (R-21), today approved amended legislation that would impose an impact fee on natural gas drilling in Pennsylvania.

As amended by the committee, Senate Bill 1100 would set the fee at a flat $40,000 in the first year of production, followed by $30,000 in year two and $20,000 in year three. A fee of $10,000 would be assessed from years four through 10. The bill is sponsored by Senate President Pro Tempore Joe Scarnati (R-25).

White said the schedule reflects the decrease in community impacts as the well production decreases. Of the revenue collected, 60 percent would go to local and county governments with drilling activity, and 40 percent would go for environmental and safety initiatives.
The amended bill also sets aside $1 million a year for training and equipment for emergency responders in Marcellus Shale drilling areas, and would allow drillers a credit of up to 30 percent of their fee if they donate to affordable housing programs.

"We want to be clear to distinguish an impact fee from a tax. A fee is tailored to defray the cost of an activity, while a tax is levied on an activity and the revenue redistributed elsewhere – a redistribution of income," said White. "We've all been put on notice that there will be no new taxes. This is an attempt to provide some relief to communities that experience direct impacts due to drilling."

If a severance tax is enacted in the future, the fee would be rescinded.

"This measure is not a final product. This is an attempt to put forth a real proposal for industry, community and legislative comment," said White.

More information from today's committee meeting, including video and audio, is available on the committee homepage at www.senatormjwhite.com.

Pictured, the Senate Environmental Resources and Energy Committee, chaired Sen. Mary Jo White (wearing green), met to consider legislation imposing a natural gas impact fee in Pennsylvania.
Provided by Senate Republican Communications