Impact Fee: Compromise on Details, not Principles

Capitolwire reports (subscription required) on the negotiations between the House and Senate Marcellus Shale impact fee bills — HB 1950 and SB 1100. Here’s a recap:

  • The fee per well would be $260,000 over 10 years — right in the middling of what the House ($160,000) and the Senate ($360,000) proposed per well.
  • The fee would be imposed at the local level, not at the state level. Reportedly, the Senate has proposed a revision that would give municipalities with the majority of the population the power to force the county to impose the fee.
  • The Senate is seeking a statewide entity to collect the fee instead of the Public Utility Commission. And the Senate wants revenue going to counties that aren’t affected by drilling.
  • The local zoning ordinances debate is unsettled but Capitolwire reports it’s likely to remain under the authority of the attorney general.

As a compromised bill is debated, legislators should rely on sound principles protecting people, not politics or pressure from special interest groups for more money.

The impact fee should remain at the county level and the county should be able to decide how much the fee should be, within the maximum cap. In order to actually be an “impact fee,” the amount should be linked to the actual, uncompsenated costs to government of drilling.  County officials should be held accountable to show that they imposed an appropriate fee to pay for the government’s cost to remediate a drilling problem.

Allowing municipalities to force the county to act seems a very odd way to manage our commonwealth. It is doubtful that many legislators would support extending this concept and giving county officials the ability to force the state legislature to adopt a policy, if a majority of counties support it.

Further, the fee should not be imposed to extract additional revenue for unrelated government purposes or subsidies, but strictly limited in its use to the actual costs of drilling.  Anything more is a tax increase.

To learn more about implementing a principled fee on Marcellus Shale drilling, click here.