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Taxation and Regulation of Hydraulic Fracturing in Pennsylvania
=Act 13= On February 8, 2012, the Pennsylvania General Assembly passed Act 13, which was signed into law on February 14, 2012 by Governor Tom Corbett after much debate surrounding a severance tax and a per-well fee. Act 13 overhauled Pennsylvania's oil and gas laws and instituted an impact fee on gas wells. The impact fee applies to all unconventional natural gas wells, with the fee decreasing as the well ages. Act 13 outlines as to how the impact fee is to be spent, with a majority of the funds being distributed to local governments in order to cover the impacts of hydraulic fracturing, as well as portions of the funds going to state agencies involved in regulating drilling and to the Marcellus Legacy Fund, which is spread out around the state for various environmental and infrastructure projects. Since its passage, Act 13 has been at the center of legal battles, pitting local governments and environmental groups against the Corbett Administration. The central issue of these cases was to decide who would decide how to zone oil and development.

=Robinson Township v. Commonwealth of Pennsylvania= On December 19, 2013, the Pennsylvania Supreme Court ruled in a 4-2 decision, that certain portions of Act 13 were unconstitutional. The Court struck down sections of the law that called for statewide rules on oil and gas to overrule local zoning rules and which required municipalities to allow oil and gas development in all zoning areas. The Pennsylvania Supreme Court cited the reasoning behind their ruling on the basis that these provisions violated the Environmental Rights Amendment of the Pennsylvania State Constitution, which guarantees that all Pennsylvanians are provided with clean air, water, and the preservation of the environment. The Pennsylvania Supreme Court also found the medical gag order section of Act 13 unconstitutional, as the Pennsylvania Supreme Court said that the statute gave the natural gas industry special treatment.

=Severance Tax= Pennsylvania remains the only major gas-producing state without a severance tax on natural gas drilling. In 2009, the Pennsylvania House of Representatives passed a severance tax on natural gas drilling, but the legislation was defeated in the Pennsylvania State Senate. With the implementation of an impact fee under Act 13 in 2012, debate surrounding a severance tax subsided. Governor Tom Wolf made enacting a severance tax on natural gas a central part of his campaign in 2014, making a push for a severance tax in his budget addresses as governor. Governor Wolf has stated that his planned severance tax would be sensitive to the natural gas market and would assist in funding education. Those in support of a severance tax have cited the influence of gas industry lobbyists as the reason behind the lack of a severance tax in Pennsylvania. The gas industry has spent $7.7 million on campaign contributions since 2007, and $3.7 million on lobbying in 2017. Supporters of a severance tax have also cited the decline in revenue from the impact fee as a reason for the need for a severance tax. . Opponents of a severance tax state that if a severance tax were implemented, it would stop energy independence in the state and slow the growth of jobs in the natural gas industry.

=Regulations on Hydraulic Fracturing in Pennsylvania= Various regulations on hydraulic fracturing exist in Pennsylvania. The Oil and Gas Act of 2012 requires that operators of unconventional wells complete the chemical disclosure registry form and post the form to the Chemical Disclosure Registry web site to report the chemicals used in the hydraulic fracturing process. The Pennsylvania Department of Environmental Protection requires applicants for a well permit to identify a potentially impacted public resource and notify the appropriate public resource agency. The regulations also ban the use of temporary waste storage pits at unconventional well sites as well as outline rules for operator responses to spills and releases. These regulations also require pipeline companies to develop Preparedness, Prevention, and Contingency Plans when performing directional boring under a waterway in efforts to minimize impacts on water. Oil and gas regulations in Pennsylvania also require permits for well drilling and operation, waste disposal, road use, pits and impoundments, wastewater discharges, water use, stream and wetland impacts, air emissions, and erosion and sedimentation.

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