Pa. House still arguing shale well fee proposal

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HARRISBURG -- State representatives today will continue debating a measure to overhaul Pennsylvania's gas-drilling regulations and impose a fee on those shale wells, in an effort to send the bill to Gov. Tom Corbett's desk.

The legislation, which was the result of years of debate in Harrisburg and months of furious activity, passed the state Senate on Tuesday morning on a vote of 31-19.

When the governor began his annual budget address minutes after that Senate vote, Mr. Corbett thanked senators for their vote and urged the state House to "resolve this as quickly as possible."

The measure was poised for passage late Tuesday, though Democratic lawmakers took their final opportunity to protest against not being included in recent negotiations, as well as note their disapproval that the bill did not have a larger assessment and broader regulations.

Senate President Pro Tem Joe Scarnati, R-Jefferson, who has been a key advocate for assessing a fee on natural gas drillers, bristled against criticism that the plan's votes this week were too speedy in light of final details being ironed out over the weekend.

Mr. Scarnati said he has "tromped through this subject with two governors" as several past attempts to create a severance tax fell short and the number of Marcellus Shale wells boomed. He began to push for an impact fee last spring -- after Mr. Corbett, a Republican, pledged not to sign a drilling tax -- and worked with Senate Democrats over the summer to incorporate their shale-related suggestions.

The Republican-negotiated measure melds the fee amounts in previous bill into a tiered system pegged against the price of natural gas, which would raise between $190,000 and $355,000 per well over 15 years. That fee is projected to raise more than $190 million retroactively for 2011, rising to $333 million by 2015.

Of the fee revenue, 60 percent of the funds would be distributed to local governments with gas drilling, with the remaining 40 percent to be deposited into a state Marcellus Legacy Fund.

During the late-evening House floor debate, state Rep. Dan Frankel, D-Squirrel Hill, slammed that allocation as too small, particularly the $6 million that would be earmarked for the state Department of Environmental Protection.

"That doesn't make up for the $10 million cut proposed in the governor's budget today," Mr. Frankel said.

Each county would be able to decide whether to charge the fee, which would be collected and distributed by the state Public Utility Commission. If a county decides not to charge a fee -- and thus forfeit its share of local fee dollars -- officials in half of the municipalities in the county could override that decision by voting to charge the fee.

It was the zoning provision that drew the most vocal opposition from Democrats in both chambers. Under the measure, the state Public Utility Commission would review those local ordinances upon request and rule whether they are reasonable based on state-prescribed guidelines.

Those uniformity standards, though tweaked during the GOP negotiations, still were deemed too overreaching for some: The Pittsburgh City Council on Tuesday approved a non-binding resolution opposing that provision, and various environmental activists continued to speak out against the restrictions.

Harrisburg Bureau Chief Laura Olson: or 717-787-4254.


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