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Legislative Outlook 2011: Pennsylvania
December 31, 2010

by Ronald W. Schuler

In the 2011 legislative session, Pennsylvania's new Republican governor, Tom Corbett, and its largely Republican legislature are likely to pick up where the last session left off with regard to Marcellus Shale issues.

The co-director of Governor Corbett's transition team, Leslie Gromis-Baker, recently publicly suggested that the Governor was considering establishing a Marcellus Shale commission to study matters for future legislation, but it remains to be seen whether the idea has any legs.

The primary issue left over from last session is the question of whether there will be a Marcellus Shale severance tax in Pennsylvania. Governor Corbett made a "no taxes/no fees" pledge during the campaign, but it is possible that a compromise will be reached whereby no revenue from a severance tax will end up going to the state. Instead, if passed, municipalities or counties would be the likely recipient of severance tax revenues, and the tax would likely be referred to as a "local impact fee," based on either the volume or value of produced gas, to assist local authorities in funding road and other infrastructure improvements directly related to Marcellus activity.

After several high-profile oil and gas production accidents in Pennsylvania and nearby in West Virginia last year, it is likely that Pennsylvania legislators will be moving to address drilling safety issues. Less certain is the fate of "forced pooling" legislation; while it is likely that some form of "forced pooling" legislation will come up for a vote during this session, the matter remains controversial, and it is anyone's guess whether it will pass.

Bankruptcy & Creditors' Rights Ronald W. Schuler