The County Commissioners Association of PA Tuesday announced its support for Gov. Corbett’s shale gas impact fee proposal, which implements numerous recommendations of his Marcellus Shale Advisory Commission.
The group had initially expressed support for the proposal following its October 3 announcement by the Governor, but with reservations concerning the mechanism by which counties would levy the impact fee.
The Association’s expression of full support follows several discussions with Lt. Governor Jim Cawley, who chaired the Advisory Commission, and Energy Executive Patrick Henderson, along with internal review by the Association’s policy committees.
While several technical matters remain under review with the Administration, the Association expressed confidence that there was clear understanding of the issues and that they would be resolved as the legislation progressed.
The Association stressed that the remaining issues do not represent a qualification of the Association’s support, nor do they constitute a reason for delay in introduction and consideration of the legislation.
The Association continued to express its strong support for the 75 percent allocation to impacted communities, noting that counties and municipalities do not currently receive direct revenues from Marcellus and other shale gas producers, as they do from other mineral operations, based on a 2002 Pennsylvania Supreme Court decision that exempted oil and gas from local property taxes.
Yet counties do provide services and incur costs based on gas development, including highway and bridge infrastructure, emergency management planning and response, human services, record keeping and others.
The Governor’s proposal directs the impact fee proceeds to these types of services, and CCAP notes that the list of allowable expenditures, and the formulas for distribution of the funds among the municipalities in the county, mirror proposals offered to the Governor’s Commission by it and the other local government groups.
CCAP also reiterated its prior support for the Governor’s proposals to strengthen or address environmental, public safety, and pipeline concerns among others.
The Association expressed its appreciation to Lt. Gov. Cawley and to Energy Executive Henderson for their leadership in discussions with the Association’s policy committees and staff.
Under Gov. Corbett's proposal, counties with shale gas would be authorized to levy an impact fee on active wells, at a maximum rate of $40,000 per well for its first year of production ($30,000 in the second year, $20,000 in the third, and $10,000 per year through the tenth year).
Seventy-five percent of the proceeds would stay with the impacted county and its municipalities, and the remaining 25 percent would be forwarded to the commonwealth for allocation among several shale gas-specific funds.
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