Friday, May 18, 2018

Federal Court Decision Strikes Down All 2017 Fiscal Code Budget Amendments, Including Environmental Riders

A federal court decision Thursday not allowing the transfer of $200 million from the PA Professional Liability Joint Underwriting Association Fund to the General Fund struck down Act 44 of 2017, the Fiscal Code amendments, in their entirety, according to Drew Crompton, Sen. Scarnati's Chief Counsel.
Click Here for a copy of the opinion.  Click Here for a copy of the order.
Crompton said in a written statement Thursday evening, "Judge Connor's decision today regarding the Joint Underwriting Association case is disappointing, but in light of his ruling to strike down Act 44 (the Fiscal Code of 2017) in its entirety, his decision may also negate dozens of important programmatic items-- a remedy that even the Plaintiffs in the case did not request.”
House Republican spokesman Steve Miskin was quoted by the AP as saying they are reviewing their options, “especially in light of what appears to be an absolutely overly broad order that goes way beyond the legal of the case.”
Wolf spokesman J.J. Abbott told the AP the transfer was “one of the many mechanisms passed by the General Assembly and signed into law to eliminate the deficit.” He said the administration was reviewing the decision.
The net result of this ruling, if left unchanged or if other action is not taken, would be programs supported by transfers made in the Fiscal Code bill would not receive funding. The most likely fix for this issue is reenactment of the 2017 Fiscal Code provisions, minus the transfer from the JUA fund.
Among the provisions eliminated by the decision, according to Crompton, is the requirement to transfer $300 million from special funds to the General Fund.
However, other environmental riders in the Fiscal Code bill eliminated by the decision to strike down the entire Act include--
-- Oil and Gas Lease Fund: Transfers $20 million from the Oil and Gas Lease Fund to the Marcellus Shale Legacy Fund for distribution to the Environmental Stewardship Fund and $15 million transferred to the Marcellus Legacy Fund to transfer to the Hazardous Sites Cleanup Fund.
-- Air Pollution Act Transfer:  Transfers $30.4 million from a settlement by the Attorney General relating to violations of the Air Pollution Control Act by Volkswagen received during the fiscal year to the General Fund.
-- Small Water And Sewer System Funding: $15 million available for small water and sewer projects with a cost of not less than $30,00 or more than $500,000.  Transfers an additional $10 million from Building PA Program to small water and sewer projects.
-- Funding Sewer/Water Laterals: Allows public municipal authorities to use funds to replace private water and sewer laterals.
-- Susquehanna and Delaware River Basin Commissions: Authorizes the Auditor General to audit the river basin commissions and the commissions shall reimburse the Auditor General for the cost of the audit.  In addition, no more than 25 percent of the appropriations to the commissions may be spent in any quarter.
-- Increase Access To Natural Gas: $6 million transfer from the Building Pennsylvania Program to the Natural Gas Infrastructure Development Fund to improve access to retail use of natural gas for schools, hospitals and businesses.
-- Repeals Drilling Moratorium End Date In Southeast: Repeals the January 1, 2018 expiration on the drilling moratorium in the South Newark Basin in Southeast PA.
-- Temporary Cessation Of Oil & Gas Wells: Provisions relating to payments of royalties during periods of nonproduction.
-- Washington Crossing State Park: Requires DCNR to spend $2.2 million on maintenance and upkeep of the park.
Click Here for a House Fiscal Note and summary of the final 2017 Fiscal Code bill.
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