Impact “Fee” or Impact “Tax”? It Matters in this (Court) Case
Is the money collected from drillers in Pennsylvania for wells a fee, or a tax? Under the Act 13 law passed in 2012, it’s called an impact fee. We’ve long made the case that it’s part fee, part tax (see our story from 2012: PA’s New Tax on Drilling (er Sorry, Impact Fee)). Our definition, which we think makes eminent sense, is that a fee is money collected to reimburse the government for a service used. You drill a well in a community, you run big trucks over rural roads–those roads get damaged and it takes money to repair them. Or if there’s an accident because of the increase in traffic and fire/police are called out more frequently–there’s a cost associated. Local towns meeting to review and debate requests related to new wells? Takes precious time, and money. The impact fee, as originally intended, would compensate local municipalities for out-of-pocket expenses they incur when drilling comes to town. But then greedy politicians who like money to flow through their stick fingers got involved and in order to “sell” the impact fee in Harrisburg, compromises were made. In the end, 60% of the money collected from the impact “fee” stays local–to reimburse towns and counties for out-of-pocket expenses. The other 40% goes into the Harrisburg black hole and disappears into the fingers of local and state politicians who don’t incur any expense from drilling. So we call that 40% portion a tax–an obscene one at that. Why does it matter whether it’s considered a tax or a fee? Because of a Commonwealth Court case in which a driller maintains it’s a tax and the company doesn’t owe it if it’s considered a tax…
Read More “Impact “Fee” or Impact “Tax”? It Matters in this (Court) Case”
In May 2012 a water truck driver delivering water to an Anadarko Marcellus Shale well pad in Clinton County, PA missed a turnoff for the road he was supposed to take, at 2:30 am in the morning. A couple of miles later he crashed and tragically died because the road he was on was not marked well and not conducive to the truck he was driving. There was a sign warning the driver not to go beyond a certain point. The driver had previously–that night–already delivered to the well pad and successfully turned onto the road he was supposed to take. Why did he miss it the second time? His widow maintains that even though he worked for a subcontractor, Anadarko was the company in charge and should have had a light illuminating the “No Anadarko Traffic Beyond This Point” sign. So she sued Anadarko, and the subcontractor, for wrongful death. Lower courts threw out the lawsuit but a federal appeals court has just reinstated a civil suit against Anadarko that will go to a jury…
Pennsylvania Attorney General Kathleen Kane, who has been indicted on numerous felony charges and likely to be forced from office any day now, filed a lawsuit yesterday against Chesapeake Energy in Bradford County Court over the issue of shorting landowners out of royalties. What every story we’ve seen (thus far) misses is this: The lawsuit also names Williams as participating in the scheme to defraud landowners out of royalty payments. So this is not just a Chesapeake story, it’s a Williams story too. Landowner groups are “hailing” the decision, jumping up and down with glee. Let us throw a little cold water on your face. Note to landowners and the groups that represent them: When you (metaphorically) crawl into bed with Kathleen Kane, you’re crawling into bed with a rattlesnake. Sooner or later she’s going to turn on you too. Mark it down. It’s in her nature. With that disclaimer in place, we’ll break down the news for you, and show you a copy of the lawsuit Kane’s office filed yesterday…