Pennsylvania has long incorporated its advantageous position atop deposits of oil and coal into its economy. As technological advancement in the 21st century meant greater access to – and utilization of – natural gas reserves trapped in shale, Governor Tom Corbett advocated for changes to Pennsylvania’s long-standing Oil and Gas Act in 2010 and 2011. The Pennsylvania General Assembly passed House Bill 1950 on February 8, 2012. Governor Corbett signed them into law as the Oil and Gas Omnibus Amendments on February 14, 2012. The law is known colloquially as Act 13.
Among many new requirements, the law most notably requires an “unconventional gas well fee,” or impact fee. Pennsylvania considers an “unconventional well” as any wellbore drilled into an unconventional formation, including geologic shale formations. Thus, any fracking wellbore is considered an unconventional well and the operator of that wellbore must pay the required impact fee. Act 13 dictates how impact fees will be distributed to the state government and local governments, and also directs how the impact fees must be spent.
Three sections of Act 13 permitted the government to assess these fees: Section 3303 (which preempted local and municipal oil and gas regulation under existing environmental laws), Section 3304 (which required municipalities to allow any and all reasonable development of oil and gas resources and established uniform fracking rules) and Section 3215(b)(4) (which allowed for waivers to drill near water bodies).
Multiple plaintiffs filed suit against Act 13 in Pennsylvania’s Commonwealth Court less than 4 months after it was into law. Plaintiffs included multiple Pennsylvania townships and municipalities, environmental non-profits, and medical professionals. In a 4-3 majority, the Commonwealth Court found, in July 2012, that Sections 3215(b)(4) and 3304 violated [PDF] Pennsylvania’s Constitution.
Governor Corbett’s administration appealed to the Pennsylvania Supreme Court, and oral arguments were heard in October 2012. The Court issued its decision on December 19, 2013, not only affirming the various municipalities’ right to standing but also declaring portions of Act 13 illegal. The Court found that the sections of Act which preempted local and municipal zoning rules violated the commonwealth’s Constitution.
The Corbett administration asked the Supreme Court to reconsider its ruling on January 2, 2014. Seven municipalities filed a brief in opposition to the request for reconsideration on January 15, 2014. The Court declined in a one-sentence order [PDF] issued on February 21, 2014.
The commonwealth continued to collect impact fees during the ongoing litigation. The 2012 fees totaled $204.3 million, and Pennsylvania anticipates that the 2013 fees will top $224.5 million.