State senator proposes 'impact fee' on gas drillers
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HARRISBURG - The much-awaited Senate Republican plan for an impact fee on gas drillers arrived Thursday with a sense of urgency and some linguistic gymnastics.
With the governor opposed to a state severance tax, Senate President Pro Tem Joe Scarnati explained his plan as a "local impact fee." It drew both support and concerns from longtime advocates of a drilling tax, and promises of deliberation from his fellow Republicans.
"It starts a conversation," Corbett spokesman Kevin Harley said.
But Mr. Scarnati, a Republican from Jefferson County, says that conversation has been under way for some time, and his constituents are asking for help with rising costs from drilling. Citing "political pressure" on lawmakers, he said some form of assessment on drillers should be approved with the state budget in June.
"I cannot see how we get a state budget done with all the cuts that are occurring in so many lines without addressing an impact fee for this industry," Mr. Scarnati said.
His proposal, which is still a draft, would assess an annual base fee of $10,000 per well. That figure that would rise based on production and natural-gas prices, to a potential high of about $35,000 in a well's high-producing initial years. Revenue would be collected by the state Public Utility Commission, and distributed to local governments, conservation districts, and for statewide environmental and infrastructure projects.
The breakdown between those three categories would be subject to discussion, he said, suggesting 60 percent as a share for drilling-heavy communities.
Of the portion for those local communities, he is proposing that 36 percent go to counties with producing 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.
Those local dollars could be used for a variety of expenses, including road construction, updates to municipal water or sewage systems, surface water reclamation, and other costs "reasonably related to the health, welfare and safety consequences" from drilling.
"We make sure that we don't limit ourselves with impacts," Mr. Scarnati said. "Today we see the impacts - tomorrow those impacts can change."
Mr. Scarnati and other Senate Republicans said last year that they could support a state tax of 1.5 percent for the first five years of a well's production, and 5 percent after that. Democrats, including then-Gov. Ed Rendell, sought a higher levy of at least 5 percent, and with more funding for the state budget than Republicans were willing to support.
First Published April 29, 2011 12:00 am
