Legislators Co-Sponsor New Marcellus Shale Fee Plan
6/15/2011
HARRISBURG – Reps. Mario M. Scavello (R-Monroe), Mike Peifer (R-Monroe/Pike/Wayne) and Rosemary M. Brown (R-Monroe/Pike) have co-sponsored legislation that will create an unconventional well impact fee – applied to Marcellus Shale wells – that would be distributed to local governments, environmental programs and road and bridge repairs.

The proposal, known as the Shale Impact Mitigation Policy for Local Government, the Environment and Roads Act (SIMPLER), divides proceeds from the impact fees between three new funds in the State Treasury benefiting local governments and environmental concerns in shale impact areas, and roads and bridges across the Commonwealth.

“No matter how many wells are physically located in the districts we represent, the potential environmental impact on the lakes and watersheds in Monroe, Pike and Wayne counties is our primary concern,” said Scavello. “Our area depends on environmental tourism, boating, fishing, hunting, skiing, canoeing, biking and hiking, so naturally we are most concerned with the possible impact of wells on watersheds, lakes and rivers.”

House Bill 1700 would assess a $50,000 impact fee per well for the first two years of production on an ‘unconventional well,’ such as those being drilled for Marcellus Shale. The impact fee decreases $5,000 every two years from $45,000 in years three to four to $20,000 in years 13 through 14, and is set at $15,000 for the next six years of production and $10,000 in year 21 and thereafter.

“Our constituents support an impact fee that stays locally and is used to monitor and remediate any issues that arise from Marcellus shale gas wells drilled in our counties or in neighboring areas,” said Peifer. “Marcellus Shale jobs have been a boon to Pennsylvania, which is third in the nation in job creation during the past nine months, but we must have a balance between jobs and the impact of the wells on our natural areas.”

“We want to ensure that the health and safety of the people we represent is protected specifically by the companies conducting the drilling,” said Brown. “We don't want to see a similar situation as what happened with the coal industry where decades of mining resulted in environmental impacts we are still addressing today. The impact fees will stay local and allow municipalities and counties the financial means to protect our area and the areas experiencing the majority of drilling.”

House Bill 1700 is sponsored by Rep. Marguerite Quinn (R-Bucks) and has bipartisan support. It will be referred to the House Environmental Resources and Energy Committee, but Quinn did not rule out introducing the proposal as an amendment to a bill moving through the Legislature during June so that it can be considered as part of the budget process.




Unconventional Well (Marcellus Shale)
Impact Fee Distribution Fact Sheet (House Bill 1700) 

    • The Local Government Shale Impact Mitigation Fund would receive 50 percent of the revenue. 
            o Half would be provided to municipalities in which wells are located. The funds could be used for: 
                ? Water, storm water and sewer system construction, repair and maintenance; 
                ? Preservation and reclamation of surface and subsurface water supplies; and 
                ? Construction and maintenance of municipal roads and bridges. 
            o Half would be provided to counties in which wells are located. The funds could be used for: 
                ? Municipal police, fire and emergency medical services, equipment and training; 
                ? Equipment for countywide training for municipal first responders and emergency preparedness associated specifically relation to gas well incidents; and 
                ? Grants to municipalities for environmental projects relating to watershed protection and flood control, and planning and enforcement activities. 
    • The Environmental Shale Impact Mitigation Fund would receive 30 percent of the revenue. 
            o 25 percent would be transferred to the Environmental Stewardship Fund until the 2014-15 fiscal year. 
                ? 15 percent from the 2015-16 fiscal year and beyond. 
                ? 10 percent would be transferred to the Hazardous Sites Cleanup Fund from the 2015-16 fiscal year and beyond. 
            o 5 percent would be transferred to the Conservation District Fund. 
    • The Impact Road and Bridge Shale Impact Mitigation Fund would receive 20 percent of the revenue for funding highway and bridge construction priority projects across the Commonwealth.

Reps. Mario M. Scavello
Reps  Mike Peifer
Reps  Rosemary M. Brown
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