Property Rights

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NOVEMBER 16, 2010

Gas Pipelines and Eminent Domain

There is another battle brewing over the development of the Marcellus Shale—pipeline construction and eminent domain. With little infrastructure in place, pipeline companies are contributing to the Marcellus economic boom, but the emergence of this new industry also presents a threat to property rights.

Eminent domain laws were originally created for things like power lines, highways, and pipelines, as these structures are considered to have a primarily public benefit. But in recent years eminent domain laws have been abused by local governments, who have sought to take private property and give it to another private entity in the name of "economic development".

In Pennsylvania, eminent domain can only be used for large interstate pipelines (pipelines crossing at least two states), while the smaller gathering lines connecting each well must be negotiated with landowners. This important limitation shrinks the number of property owners vulnerable to eminent domain, but the possibility for a court showdown still exists.

Meanwhile, some pipeline companies are applying for utility status in Pennsylvania in order to acquire more expansive eminent domain powers. Other pipeline companies worry this will open a floodgate of regulations from the PUC.

In the end, most pipeline companies are very vocal about their preference to negotiate fair compensation, and restrictions to avoid the expensive and time consuming process of eminent domain. The Penn State Marcellus Center shares some additional tips for landowners negotiating the construction of a pipeline on their land.

posted by ELIZABETH STELLE | 10:40 AM | 0 comment

AUGUST 18, 2010

Pittsburgh's Proposed Petroleum Prohibition

The Post-Gazette features an article on a proposed ban on natural gas drilling in the city of Pittsburgh:

Ben Price, who helped draft the bill as projects director for the Community Environmental Legal Defense Fund in Franklin County, said the city's right to protect residents from the hazards of drilling should trump any state claim of authority over drilling matters.

"Rights precede the state," he said. "Rights precede government. Rights precede state statues [sic] and are superior to them."

Apparently, while the rights of the city government precede the state, the right for private landowners to lease their own land doesn't precede the right of city government to prohibit leasing.

posted by NATHAN BENEFIELD | 10:26 AM | 0 comment

JULY 21, 2010

Natural Gas & Forced Pooling

The soon-to-be unbalanced FY 2010-11 state budget, included language that a severance tax on natural gas would be passed in Pennsylvania by October 1.

Many drillers would support a fair severance tax, as long as its among other changes to modernize regulatory obstacles in the state. Drilling here is already more expensive than comparable states due to the topography and regulations.

However, a proposed forced (or "fair") pooling law is not a regulatory change Pennsylvania should adapt.

A pooling law would require landowners to allow a drilling company to capture the natural gas under their property (and receive payment), if a majority of homeowners in that area ("pool") - a current proposal requires a 75% majority before forced pooling occurs - have agreed to lease their land. The law wouldn't force homeowners to allow wells on their property, and it would ensures they receive royalty payments for the gas recovered. And while the gas industry is correct - pooling laws reduces drilling costs and the environment impact by increasing efficiency - it also forces individuals to give up their property rights.

Property rights should not be infringed upon simply for the sake of convenience or to save costs. Indeed, that is little different than abusing eminent domain to take homes to give to Pfizer.

Yet the regulatory framework for the drilling industry does need revamping to address the growing operation costs. Lawmakers should consider the higher costs of drilling in Pennsylvania - due to a lack of forced pooling, along with other barriers - when considering a severance tax.

posted by KATRINA CURRIE | 01:01 PM | 0 comment

OCTOBER 30, 2008

Lancaster County Home Rule Charter Vote

Here is some information I have compiled on the Lancaster County home rule ballot measure (per a request from a Lancaster County Resident).

Currently six counties in Pennsylvania have home rule (Philadelphia, Allegheny, Erie, Lackawanna, Northampton, and Lehigh) The proposed home rule charter in Lancaster County would increase the number of county commissioners to five, instead of the current three; replace the position of a county administrator with an appointed executive; consolidate the Register of Wills, Clerk of Courts and Prothonotary into one office; and eliminate two part-time jury commissioners. The major debate over the issue seems to be what would be the effect on county taxes and spending.

Unfortunately, there isn't a great deal of research and evidence of the effect of home rule or county government structure on spending. Some years ago, as a graduate student, I did a paper on county government reform. My conclusion was inconclusive: counties with home rules/"reformed" structures had higher expenditures, but much of this was explained by the fact that home rule charters were larger and spent more to begin with - and hence became, or were allowed to become, home rule, as a result of their size.

That conclusion is mirrored in papers by David Latzko of Penn State University on Home Rule and the Size of County Government in Pennsylvania (2005; updated in 2008). From the 2005 abstract:

This paper finds that taxes are not significantly higher or lower in counties which have adopted a home rule charter. Non-tax revenues in the form of state and federal grants are higher in home rule counties. As a result, county expenditures are also positively related to home rule status.

Additional Resources:

Pro/Con

News Stories

posted by NATHAN BENEFIELD | 11:12 AM | 0 comment

APRIL 9, 2008

Eminent Domain post-Kelo

The Cato Daily Podcast for today covers state eminent domain reform reforms since Kelo.

For more visit the Castle Coalition, and their report on state eminent domain law.

posted by NATHAN BENEFIELD | 09:20 AM | 0 comment

FEBRUARY 20, 2008

The ACLU gets it right for once

Tony Phyrillas on the ACLU's defense of property owners' right to put campaign signs in their yard in South Park (not that South Park).

posted by NATHAN BENEFIELD | 09:50 AM | 0 comment

SEPTEMBER 28, 2006

Group plans rally to oppose seizure

Upcoming STOMP Rally to feature the Commonwealth Foundation.

posted by NATHAN BENEFIELD | 10:27 AM | 0 comment

SEPTEMBER 27, 2006

Cramer Parking/HIA Eminent Domain Case

The Patriot News reports that the legal standoff between Cramer Airport Parking may be resolved, if the airport agrees to one of three solutions that would allow them to take over the Cramer land (if needed) but allow the Cramer's to stay in business.

It may be a shock to some, but it seems free exchange works better than eminent domain.

posted by NATHAN BENEFIELD | 00:54 PM | 0 comment

AUGUST 22, 2006

State sues over HIA attempt to seize land

The Pennsylvania Attorney General's Office has filed suit to stop the Harrisburg Airport from using eminent domain to take Cramer Airport Parking, reports the Patriot News. Cramer Airport Parking is near to, and competing with, the Harrisburg Airport parking lots. It is good to see one issue in which state government seems to be on the right side, following eminent domain reforms passed by the General Assembly in April.

posted by NATHAN BENEFIELD | 10:18 PM | 0 comment

MARCH 23, 2006

Abuse of Eminent Domain

Harrisburg Airport continues its quest to use eminent domain to take over a nearby competitor, according to the Patriot News. The Susquehanna Area Regional Airport Authority (SARAA) is trying to force out Cramer Airport Parking, which offers long-term parking near, and in competition with, Harrisburg airport. SARAA is claiming "eminent domain" based on a need to build new storage areas exactly where Cramer Parking is currently located.

By dismissing this lawsuit, the courts have basically stated that it is acceptable for government bodies to forcibly put private competitors out of business. To paraphrase the judge's ruling - "they're not a monopoly, they're the government".

Clearly it is time for eminent domain reform in Pennsylvania.

posted by NATHAN BENEFIELD | 01:43 PM | 0 comment

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