Preemption Language Gone, But Pennsylvania’s Impact Fee Would Still Limit Local Governments

November 18, 2011 | 3:13 PM

By Scott Detrow

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State leg­is­la­tors may no longer be weigh­ing whether or not to “super­sede and pre­empt” local drilling reg­u­la­tions. But the two impact fees in front of the House and Sen­ate would still restrict what munic­i­pal­i­ties could and could not reg­u­late, when it comes to gas extrac­tion oper­a­tions within their boundaries.

Both the House and Sen­ate added lan­guage into their Mar­cel­lus Shale bills this week requir­ing local gov­ern­ments to allow nat­ural gas wells to oper­ate in all zones, includ­ing res­i­den­tial. The near-identical sec­tions of HB 1950 and SB 1100 also empower Pennsylvania’s Attor­ney Gen­eral to serve as the judge of whether or not a municipality’s drilling ordi­nances are “rea­son­able.” Under the pro­vi­sions, the Attor­ney Gen­eral can bar a town­ship or bor­ough from receiv­ing any impact fee rev­enue. The Attor­ney Gen­eral would also have the power to bring suit against the offend­ing munic­i­pal­ity in Com­mon­wealth Court.

There are sev­eral major dif­fer­ences between the impact fees passed by the House and Sen­ate this week. This method of restrict­ing local zon­ing options is one of the few major areas where lead­ers from both cham­bers are on the same page.  That means the odds are good it ends up in the final bill.

Here’s how the reg­u­la­tory scheme works:

What’s Rea­son­able?

The leg­is­la­tion requires munic­i­pal­i­ties’ ordi­nances to “pro­vide for the rea­son­able devel­op­ment of min­er­als.” What’s rea­son­able? By and large, that’s for the Attor­ney Gen­eral and the Com­mon­wealth Court to decide. But the bills both set para­me­ters local gov­ern­ments would be required to follow.

Munic­i­pal­i­ties would have to:

• Com­plete per­mit reviews within thirty days.
• Allow oil and gas oper­a­tions and impound­ment pools in all zones, includ­ing residential.
• Allow com­pres­sor sta­tions and nat­ural gas pro­cess­ing plants in agri­cul­tural and indus­trial zones.
• Keep drilling reg­u­la­tions in line with exist­ing con­struc­tion and indus­trial zon­ing. That means a town­ship wouldn’t be able to set one stan­dard for noise emit­ted by com­pres­sor sta­tions, and another for fac­to­ries within its borders.

The leg­is­la­tion also sets a manda­tory 300-foot buffer zone between well pads and res­i­den­tial build­ings. Com­pres­sor sta­tions would need to be 750 feet from build­ings, and could not exceed a sound of 60 deci­bels at the adjoin­ing prop­erty line.

Why the stan­dards? Drew Cromp­ton, the chief-of-staff for Sen­ate Pres­i­dent Pro Tem Joe Scar­nati, explained they’re meant as a way to keep munic­i­pal­i­ties from enact­ing effec­tive mora­to­ri­ums on drilling within their bound­aries. It pre­vents “silly ordi­nances” aimed at keep­ing drillers away he explained, like bans on water trucks within munic­i­pal lim­its. “That is unrea­son­able,” he said, “and makes the indus­try go nutty. …This is meant to set base­lines to pre­vent that from occurring.”

Nat­ural gas drillers have been vocal in their request for statewide zon­ing consistency.

Drilling oppo­nents are up in arms over the restric­tions, espe­cially the require­ment to allow drilling within res­i­den­tial zones. “It makes sweep­ing new restric­tions on what towns can do with their zon­ing,” said Myron Arnowitt, the state direc­tor of Clean Water Action. “Well pads and frack pits full of chem­i­cals will be allowed as close to 300 feet to your home, or your child’s school.” Arnowitt said he’s con­cerned the restric­tions would “make it almost impos­si­ble for town­ships to exer­cise their rights and oblig­a­tions to pro­tect their res­i­dents, busi­nesses, and com­mu­nity qual­ity of life.”

Roots In 2005 Law

How would the new statewide stan­dards be enforced? That’s where the Attor­ney Gen­eral comes in.

Under the legislation’s setup, if a drilling com­pany thinks a munic­i­pal ordi­nance is unrea­son­able, it can file an appeal with the Attor­ney Gen­eral. The AG would then review the zon­ing lan­guage, and issue a rul­ing within 120 days. If the office deems the ordi­nance unrea­son­able, the munic­i­pal­ity doesn’t get any impact fee revenue.

There’s more, though: the leg­is­la­tion would allow the Attor­ney Gen­eral to file suit against the local gov­ern­ment in Com­mon­wealth Court, in order to inval­i­date the ordi­nance. Effec­tively, the Penn­syl­va­nia Attor­ney Gen­eral would be suing on behalf of an aggrieved drilling com­pany. If a spe­cial mas­ter appointed by Com­mon­wealth Court rules on the driller’s behalf, the court would have the power to make the munic­i­pal­ity pay both sides’ legal fees.

The setup is based on the 2005 ACRE law, which imposed sim­i­lar restric­tions on munic­i­pal zon­ing of agri­cul­tural activ­ity. Like the impact fee bills, the law had a goal of bar­ring local gov­ern­ments from craft­ing zon­ing reg­u­la­tions designed specif­i­cally to crack down on local farm­ing activ­i­ties – specif­i­cally, the cre­ation sludge pools on large-scale indus­trial farms. The law pro­hib­ited local gov­ern­ments from enact­ing zon­ing  that, “pro­hibits or lim­its a nor­mal agri­cul­tural oper­a­tion.” Here, “nor­mal” meant day-to-day activ­ity geared toward rais­ing live­stock or grow­ing crops, and prepar­ing prod­ucts for sale.

If an agri­cul­tural pro­ducer takes issue with a munic­i­pal ordi­nance, it files a com­plaint with the Attor­ney Gen­eral, who has the power to sue a munic­i­pal­ity. Since the law went into effect, the Attor­ney Gen­eral has got­ten “15 to 20 requests a year,” accord­ing to Ross Pifer of the Penn State Dick­in­son School of Law, who wrote an arti­cle ana­lyz­ing the ACRE law in 2010. “The Attor­ney Gen­eral gen­er­ally accepts about half, mean­ing  [the office] feels about half of those ordi­nances would be con­sid­ered unau­tho­rized.”  Most of the time, the munic­i­pal­ity works with the Attor­ney General’s office to amend its lan­guage,  and avoids a court case. “A rel­a­tively small num­ber of cases have required lit­i­ga­tion,” said Pifer. “But I think a lot of…disputes have been resolved through the process that’s set up.”

The Attor­ney General’s spokesman did not return a call for com­ment on how effec­tive the ACRE setup has been for the depart­ment, and how many staffers are devoted to work­ing on munic­i­pal chal­lenges. Gov­er­nor Tom Cor­bett served as Attor­ney Gen­eral, of course, from 2005 to Jan­u­ary 2011. His spokesman did not respond to calls for com­ment on ACRE, either.

The setup has its crit­ics. In 2009, a group opposed to a large-scale pig farm in Peach Bot­tom Town­ship, York County, ral­lied in the Capi­tol against what they framed as an unfair restric­tion on a local government’s right to reg­u­late what hap­pens within its bound­aries.  The law ren­ders a munic­i­pal­ity inca­pable of pro­tect­ing its “health, safety and wel­fare,” activist Laura Yan­ney said at the time, accord­ing to an arti­cle pub­lished by Capitolwire.

Repub­li­can Sen­a­tor Joe Scarnati’s top staffer, Drew Cromp­ton, dis­agreed, call­ing the leg­is­la­tion a suc­cess. “Five years ago we had a real dust up. …com­mu­ni­ties were rebelling, try­ing to get local gov­ern­ments to restrict where agri­cul­tural farm­ers could put these sludge pools.” Cre­at­ing a sit­u­a­tion where the Attor­ney Gen­eral would rule on local ordi­nances elim­i­nated the pres­sure res­i­dents were plac­ing on their town­ship super­vi­sors, to draft zon­ing aimed at indi­vid­ual farm­ers, he argued.

Cromp­ton said he hopes the impact fee bill will have a sim­i­lar effect. “It empow­ers the Attor­ney Gen­eral to call balls and strikes, and say…whether zon­ing is out of bounds or not.”