On Tuesday, July 8, 2014, the Pennsylvania State Senate passed
the Commonwealth's fiscal code by a margin of 26 to 22.
Included within the fiscal code, as a companion piece to the
legislation, were provisions critical to the Commonwealth's
commitment to future natural gas development on state
lands. Specifically, the fiscal code included measures
which: 1) allow drilling for natural gas on state land; and 2)
separate regulations applicable to conventional oil and gas
drilling from unconventional drilling. The measure was passed by
the Pennsylvania State House last week and is now awaiting the
signature of Governor Tom Corbett.
Prior bills seeking to differentiate regulations imposed upon
conventional and unconventional drilling failed to survive review
by the State Legislature. Consequently, the inclusion and passage
of both measures in conjunction with the fiscal code have drawn the
ire of Governor Corbett's political opposition as lacking
transparency and circumventing the legislative processes of debate
and discourse. Moreover, prior to passage of the fiscal code by the
State Senate, concerns were raised by opponents of the measure
(which was comprised of more than 31 separate provisions, some of
which were unrelated) that the bill violated the single-subject
provision of the Pennsylvania Constitution. However, despite that
argument, the fiscal code, and the pro-Oil and Gas Industry
provisions included therewith, passed.
It is anticipated that Governor Corbett will sign the measures into
effect, as doing so will enable him to fulfill his recent promise
to lift former Governor Ed Rendell's moratorium on additional
leases of public land. The result will certainly be a mutually
beneficial result for oil and gas operators and the Commonwealth as
it will renew oil and gas operators the potential ability to
develop previously inaccessible public lands, while raising an
estimated $95 million for the state budget.
This article is presented for informational purposes only and is not intended to constitute legal advice.