Of the more than 2,500 municipalities in Pennsylvania, four faced challenges to the money they received from Marcellus Shale development since 2012, when the state’s Act 13 governing the industry was passed.
Those four townships – Cecil, Mt. Pleasant, Robinson and South Fayette – also happen to be four of seven municipalities who argued in court that the zoning provisions of Act 13 were unconstitutional.
A state appeals court Thursday ruled municipalities cannot be subject to zoning reviews by the Public Utility Commission and, subsequently, to revocations of impact fee monies by the PUC.
Last December, the state Supreme Court struck down key zoning provisions of Act 13 and remanded several other provisions of the law back to Commonwealth Court for consideration.
The court decision Thursday upheld some provisions of the law that municipalities argued were unconstitutional, but several petitioners were still pleased with the verdict.
Peters Township Councilman David Ball, a petitioner in the case, said he considered the ruling a big win for municipalities.
“We won the thing that we were most concerned about, that we really don’t want the PUC reviewing ordinances, and the court was very clear on that,” Ball said.
Ball said the decision will prevent the PUC “from being able to basically bully townships” by withholding impact fees on unconventional gas wells – a revenue stream that was established by Act 13 in lieu of a severance tax on the industry.
The PUC and other state agencies argued impact fees should be withheld in certain cases when zoning ordinances did not comply with Act 13.
“Now with this court ruling, that threat is gone. … We won’t have to deal with the PUC’s intimidation anymore,” said Andy Schrader, chairman of supervisors in Cecil Township, one of the petitioners in the case.
“Everybody that lives in one of these communities is affected,” said Brian Coppola, former supervisor for Robinson Township and a petitioner in the case.
Coppola said the PUC withheld $400,000 in impact fees from Robinson Township when a resident argued the township zoning ordinance was prohibiting natural gas development and asked the PUC to review the ordinance. The PUC ultimately released the funds under court order – an action Coppola thinks ultimately helped their case.
“We’ve already lived through a challenge,” said John Smith, solicitor for Cecil and Peters townships, “and we’ve already received, in the past, suggestions from oil and gas operators that if we don’t approve certain permits, that our impact fee may be at risk, and/or they would seek attorneys fees under the act.”
Smith said in an email statement he was “extremely pleased” with the court ruling Thursday that “once again protected the rights of local governments and Pennsylvania citizens with its decision in favor of the Act 13 municipalities.”
However, he disagreed with other aspects of the ruling. The court upheld the provision of Act 13 that drilling operators are not required to notify private water suppliers if there is a spill, though they are required to do so for public water sources.
“While we believe all Pennsylvania citizens agree that the failure of the law to require notice of spills at drilling sites to local citizens that rely on water wells and springs for drinking water is not sound policy, the court did not believe that the provision rose to the level of violating the Pennsylvania Constitution on equal protection grounds,” Smith said in an email.
Smith said what opponents called a “medical gag order” was not found to be unconstitutional, but said the court’s interpretation of that provision was commendable.
“The court did interpret the law to read that disclosures of trade secrets can be made to patients who suffer chemical exposures from drilling operations … and that the medical information can be written in medical records,” Smith said. “The court’s reading of the statute alleviated much of our concern with how much the confidentiality agreement or ‘medical gag’ provision would serve to hinder patient care. We will be discussing the full decision with our clients in the near future.”