HARRISBURG, November 15, 2011 – – State Sen. John P. Blake (D-Lackawanna/Luzerne/Monroe) today decried the virtual party-line passage of legislation that would assess a minimal impact fee on gas drillers. Blake noted that his opposition to SB 1100 “was not only because of what it does, but because of what it fails to do”.

Senate Bill 1100 would levy an initial base impact fee of $50,000 per well, which would decrease annually and be completely eliminated in twenty years even if wells were still producing at that time. There is no provision in the bill that addresses the volume of natural gas produced at well-heads throughout the state.

“We in Northeastern Pennsylvania know all too well the implications of allowing our natural resources to be extracted from the ground while seeing the wealth associated with that extraction industry exiting the state,” Blake said. “Global multi-national, multi-billion dollar natural gas companies who are consolidating control of the Marcellus field are able and willing to exploit our natural resources for years to come, but the Republican-controlled General Assembly in Harrisburg appears unwilling to ask that industry to pay a fair share back to state coffers to relieve tax burdens on our middle-class or to support local communities statewide that are afflicted by failing infrastructure, environmental degradation, joblessness and economic recession.”

“Drilling companies are paying hundreds of millions in severance taxes in other states and yet in PA Senate Bill 1100 provides only for a wholly inadequate impact fee that will be but a rounding error on the balance sheets of these profitable companies,” Blake added.

Under Senate Bill 1100, revenue from the proposed impact fee would be split, with 55 percent going to counties and municipalities in the Marcellus Shale regions and the remaining 45 percent being used for statewide infrastructure improvements, environmental protection programs and other natural gas related projects. Republicans estimate that the impact fee would raise $94 million this year, up to $155 million next year and roughly $255 million 3 years from now.

“Contrast these numbers with the tax revenues collected in other gas states like Texas where they raise over $2 billion per year; North Dakota where they collect over $2 Billion and Alaska where they collect over $4 billion,” Blake said.

In floor remarks Senator Blake also expressed serious concerns about the provisions in SB 1100 that “erode or preempt the influence of local land use and zoning ordinances and remove local control over proposed gas drilling and pipeline operations within their jurisdictions”.

Senate Bill 1100 would permit the state attorney general’s office to compare a municipality’s zoning ordinance to a statewide zoning standard. If it were found that the municipality ordinance had stricter standards than the state, that municipality would be ineligible for any impact fee revenue.

The bill was sent to the House for concurrence.

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