Proposed Impact Fee Brings Controversy
By Rick Hiduk
Pennsylvania House Bill 1950, loosely known as the “Impact Fee Bill,” passed a House Finance Committee (HFC) vote on Nov. 2 but still has a long road to travel before it becomes law. Nonetheless, the contents of the far-reaching piece of legislation has elected officials and citizens on both sides of the fence crying foul. HB1950 does seem to address some of the regulatory problems that the state’s old Oil and Gas Act did not, but the minimal impact fee it does support would likely not address the problems faced by municipalities most affected by gas drilling and would almost certainly strip them of any authority over how the industry conducts itself.
“It’s still in the ‘sausage grinder,’” said Bradford County commissioner Doug McLinko, in reference to the potential for significant alterations and amendments to the bill.
Rep. Tina Pickett, for example, is considering adding an amendment that would require the gas companies to do private water well testing prior to drilling near homes and businesses. Many of the companies are already doing this, she noted. By making the requirement part of the legislation, however, landowners would be notified that, if they do not permit the gas company to test their water in advance of drilling operations, they forfeit their rights to take legal action for tainted water after the fact.
Pickett is not a member of the HFC and therefore did not vote on the measure. The bill now moves through the reading process in the House and is “on first consideration,” she explained. When the majority leader calls HB1950 up for second consideration, it will move to the House floor for debate and amendments.
Chief Oil and Gas quickly commended the HFC for establishing environmental and safety standards in HB1950 that will allow companies to pursue gas development “efficiently and economically.” There was no reference in the Chief press release to the one percent impact fee.
The Pennsylvania Budget and Policy Center (PBPC) immediately chastised the legislation, citing the impact fee as insignificant and claiming that the bill “strips authority from cities, boroughs, and towns to regulate local gas drilling activity.” PBPC director Sharon Ward added, “This loss of control comes at a bargain basement price. Drillers in Texas will pay five times as much in drilling taxes over the life of a comparable deep well as they will in Marcellus shale.”
The Pennsylvania State Association of Township Supervisors issued a statement on Nov. 14, opposing HB1950, calling it “an attack on local land use decisions…which were implemented with health, safety, and welfare of residents in mind.”
“I don’t support any intrusion on local government,” McLinko concurred. Citing local representatives as an exception, McLinko faulted policy makers who influenced the bill as nearsighted and ignorant. “I’m appalled, in general. It is reckless and irresponsible of them,” he stated, noting that few of the officials involved with the legislation have visited Bradford County to get a proper assessment of what it means to be the most drilled county in the state.
As per the revenue that might be realized from an impact fee, both McLinko and commissioner-elect Daryl Miller are concerned that the funds would not be redistributed fairly by Harrisburg and would not adequately address pressing needs such as the strain that increased traffic and industry place on fire companies and other first responders.
Both also contend that Bradford County and other nearby counties have done better working directly with the gas companies to get roads and infrastructure repaired than would be possible under the proposed new law.
“When I tell the people in Harrisburg that the gas companies have already put $300 million into road repair in Bradford, Wyoming, and Tioga Counties, they look at me like I have two heads,” McLinko remarked. “They can’t believe it. I don’t think they have gone the distance to really understand the impact of this industry at the local level.”
Miller cited Terry Township in Bradford County as a prime example of a municipality where a one percent impact fee could not possibly keep up with the need for road repairs and construction. He also expressed concern that HB1950 singles out the gas companies in a manner that no other industry or development is assessed.
McLinko added that, when one calculates the benefits to the economy in terms of an increased tax base, robust business, and low unemployment, HB1950 could drive the gas industry out of Bradford County and Pennsylvania altogether.
“We are in huge competition with other states, especially Ohio with the Utica shale,” he remarked.
Pickett seems to agree, in theory, that the increase in the tax base from the development of the Marcellus shale is already evident and may outweigh the need for an impact fee. But she adds that the environmental protection measures included in the legislation are needed.
“I have not heard from any of my local municipalities opposing this,” she related via email. “The uniformity of regulations from region to region is something put in place several years ago for agriculture, and it seems to be working well. It also saves local municipalities from excessive legal and court costs.”