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| FOR IMMEDIATE RELEASE |
| Pa. House Democratic Caucus
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House Democrats: 'We must do better' than weak GOP shale bill
Pa. House passes county-option 'impact fee' with lowest tax rate in nation
HARRISBURG, Nov. 17 – Pennsylvania House Democrats strongly opposed the weak Marcellus Shale natural gas tax supported by Gov. Tom Corbett and passed by the Republican-controlled House today.
The Corbett-Republican bill, H.B. 1950, passed 107-76, largely along party lines. The bill now moves to the Senate.
House Democrats blasted the bill for its low, 1 percent tax rate on drillers in the Marcellus Shale, its lack of adequate environmental protections and its infringement on local governments’ power to regulate drilling activities in their communities.
“This Corbett-Republican tax bill does not force these huge, out-of-state drilling companies to pay their fair share – and it fails to address the many statewide impacts of drilling activity, including environmental threats,” said Democratic Leader Frank Dermody, D-Allegheny. “This bill is more than just a gift to the oil and gas industry – It’s a reckless abandonment of our responsibility to protect and defend the welfare of this commonwealth.”
The Corbett-Republican tax bill would allow some counties the option of assessing and collecting an “impact fee” but limits that fee to what is effectively a 1 percent tax rate per well. The “fee” could only be assessed and collected in counties with active natural gas drilling in the Marcellus Shale region, and direct revenue from the fee would be limited to those counties.
“This bill would benefit only a select few – namely the drilling companies – while leaving the vast majority of Pennsylvanians with zero benefit from the development of this rich natural resource,” said Democratic Whip Mike Hanna, D-Clinton/Centre. “If we are serious about protecting our environment, then we should enact a robust severance tax, not this sham of a bill.”
Beyond the low tax rate, House Democrats argued for stronger environmental protections, including higher bond requirements for drillers and stricter regulations to protect the water, land and air for Pennsylvania residents, both now and for future generations.
“This bill is an absolute embarrassment,” said Democratic Caucus Chairman Dan Frankel, D-Allegheny. “It has an obscenely low tax rate, inadequate environmental regulations and pitifully low bonding requirements. This is not what Pennsylvanians want. They want a serious bill that protects the interests of Pennsylvanians over the interests of the oil and gas industry.
“We can do better, and we must do better,” Frankel continued.
Democratic Caucus Secretary Jennifer Mann, D-Lehigh, also noted that the Corbett-Republican bill fails to do anything to spur additional job growth in Pennsylvania – the No. 1 issue facing the commonwealth today.
“The key to creating good-paying jobs statewide is a commonsense Marcellus Shale bill that benefits people in every county, not just those counties with drilling operations,” Mann said. “A rising tide should lift all boats, but this bill is so limited in ambition and delivers so few dollars for economic development the end result just doesn’t do enough.”
The Corbett-Republican tax bill includes language that allows local zoning powers to be usurped by the state. House Democrats firmly oppose any state pre-emption of local municipalities’ zoning rights.
“House Bill 1950 allows the state to strip cities, boroughs and townships of their power to regulate where and how drilling activities can be done within their communities,” said House Appropriations Committee Democratic Chairman Joe Markosek, D-Allegheny. “The language of the bill is convoluted and confusing, but it’s apparent that existing zoning powers would be usurped by the state under this bill.”
Democrats noted that the House, under Democratic leadership during 2009 and 2010, passed a fair and reasonable severance tax on Marcellus Shale natural gas drillers – twice. Both times, those efforts died in the Republican-controlled state Senate.
Democrats said the Corbett-Republican bill falls well short of those previous efforts, and it falls short of what Pennsylvanians demand in a Marcellus Shale bill – strong environmental regulations and a tax that forces the oil and gas industry to pay their fair share.
“This bill is a failure in nearly every way,” said Caucus Administrator Ron Buxton, D-Dauphin. “From the lowest-in-the-nation tax rate to the weak environmental protections, it is clear that the residents of Pennsylvania just weren’t a priority in this bill.”
“House Bill 1950 is nothing more than a thinly veiled disguise by Republican leaders to appear responsive to public demand for an extraction tax on the state’s drilling industry,” said Democratic Policy Committee Chairman Mike Sturla, D-Lancaster. “After dragging their feet, they finally arrived at a weak bill that fails to protect the environment, strips local governments of regulatory control, and pales in comparison to the extraction taxes collected by other drilling states. It is too little, too late.”
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