A brief submitted by the PA Environmental Defense Foundation February 15 to Commonwealth Court in its Environmental Rights Amendment challenge to the unconstitutional transfer of monies from environmental funds now includes the most recent transfers proposed from the Oil and Gas, Keystone, Environmental Stewardship and Hazardous Sites Cleanup funds by Gov. Wolf.

In June 2017, PEDF won its case in front of the PA Supreme Court which declared transfers from the DCNR Oil and Gas Lease Fund to the General Fund and other programs unconstitutional because the General Assembly and the Governor were not acting as trustees for Pennsylvania’s natural resources under the state’s Environmental Rights Amendment (Article I, Section 27).

The case was then remanded to Commonwealth Court where it has been since then to sort out a remedy consistent with the PA Supreme Court’s decision.

The new PEDF brief submitted to Commonwealth Court in support of summary judgment summarizes the higher court’s findings saying, “They [the General Assembly and Governor] failed to exercise their fiduciary duties of prudence, loyalty and impartiality in appropriating and using the Oil and Gas Lease Fund for purposes other than remedying, restoring and enhancing the public natural resources of our State Forests and Parks in Northcentral Pennsylvania.”

The brief also recounts all the actions the General Assembly and the Governor have taken since the June 2017 decision that are inconsistent with the PA Supreme Court decision--

“On July 11, 2017, less than a month after the Supreme Court issued its opinion in PEDF II, Governor Wolf and the Commonwealth ignored the Court’s directives and enacted the General Appropriations Act of 2017, which appropriated $61,291,000 from the Oil and Gas Lease Fund to pay for DCNR operations for the 2017-18 fiscal year, including salaries and travel expenses.

“On June 22, 2018, the Respondents approved the General Appropriations Act of 2018, which appropriated another $48,798,000 in the Oil and Gas Lease Fund from the Oil and Gas Lease Fund to pay for DCNR general government operations.”

Also included were transfers from the Oil and Gas Lease Fund going back to 2012 to the Marcellus Legacy Fund for subsequent distribution to the Environmental Stewardship (Growing Greener) and Hazardous Sites Cleanup funds.

“Just as the Section 27 [Environmental Rights Amendment] trust assets in the Oil and Gas Lease Fund have been used in place of tax revenue in the General Fund, Section 1601.2-E(e)(1) authorizes Section 27 trust assets to be used [unconstitutionally] to replace insufficient landfill fees in the Environmental Stewardship Fund.”

The brief points to the same “misuse” of trust assets from the Oil and Gas Lease Fund in the transfers to the Hazardous Sites Cleanup Fund to replace tax revenue from the Capital Stock and Franchise Tax as it was being phased out.

“Another example of the Respondents’ cavalier attitude toward their duties under Section 27 is found in Section 3 of the 2017 Fiscal Code Amendments. Section 1507.1 of the Fiscal Code is amended to add a provision (b.1) that diverts $30,409,055 received from a settlement for violations of the Air Pollution Control Act from the Clean Air Fund to the General Fund.

“On February 5, 2019, the Governor issued his Executive Budget for the next fiscal year [FY 2019-20] and is recommending the appropriation of $69,774,000 to pay for DCNR general government operations.”

The brief also points to the Governor’s FY 2018-19 transfer $10 million from the Keystone Recreation, Park and Conservation Fund and the proposed FY 2019-20 transfer of $30 million from the same fund as examples of violations of the PA Supreme Court decision in using those funds for which he has a fiduciary duty to replace insufficient tax revenue needed to pay for government operations.

“The Respondents have given no indication that they contemplated, let alone reasonably exercised their duties as the trustee of the environmental public trust created by Section 27 [the Environmental Rights Amendments.] For the reasons more fully set forth in this brief, PEDF is requesting that this Honorable Court declare the Respondents actions unconstitutional and a violation of their Section 27 duties.

“The Respondents’ use of our public natural resources to pay for general government operations, including salaries and routine daily expenses of DCNR, is based on the misconception that the Commonwealth has some proprietary interest in the public natural resources to make that decision.

“Respondents’ proprietary use of the public natural resources to pay for general government operations is depleting the very public natural resources they are bound as trustees to conserve and maintain.

“DCNR has started to document the degradation, diminution and depletion of the public natural resources occurring on our State Forests from shale gas extraction.

“In the 2014 Monitoring Report, DCNR states that natural gas development on State Forest land, “especially at the scale seen in the modern shale-gas era, affects a variety of forest resources and values, such as recreational opportunities, the forest’s wild character, scenic beauty, and plant and wildlife habitat.”

The brief also refers to the 2016 Monitoring Report as a continuation of this documentation, saying, among other impacts, DCNR “reports that “noticeable changes to the forest landscape are evident” with the largest increase overall resulting from “an additional 9,913 acres of forest edge (35 percent change in the Elk State Forest specifically).””

“DCNR needs to use the proceeds from the extraction and sale of oil and gas in the northcentral State Forest to both prevent and remedy the degradation of those forests and to meet its corollary obligation to sustain the forest through ecosystem management….”

Also noted was the action of the General Assembly in the FY 2017-18 budget to repeal the original Oil and Gas Lease Fund Act and replace it with a new Oil and Gas Lease fund “with no protections on the use of the funds that are part of the corpus of the trust, mingled the funds of the corpus of the trust with non-trust funds; and generally eliminated DCNR from using the funds that are the corpus of the trust to put the funds back into the corpus of the trust.”

PEDF asked the Court to declare all these itemized transfer actions “unconstitutional because they “plainly ignore the Commonwealth’s constitutionally imposed fiduciary duty [under Section 27] to manage the corpus of the environmental trust for the benefit of the people to accomplish its purpose – conserving and maintaining the corpus by, inter alia, preventing and remedying the degradation, diminution and depletion of our public natural resources” as the PA Supreme Court said.

PEDF said, “Affirmative legislative action is needed to ensure that the new Oil and Gas Lease Fund has protective limitations to replace the limitations of the now repealed Oil and Gas Lease Fund Act to protect the proceeds that from the sale of its public natural resources that are a part of the corpus of the public trust.”

Among the recommended provisions for legislation are--

-- “Ensure that the funds from the sale of the oil and gas in our State Forest are part of the corpus of the Trust and can only be used within the corpus of the trust.”

-- Require that “prior to any further appropriations of the funds from oil and gas that are a part of the corpus of the trust that the trustees insure that there are and will be trust funds for future generations to ensure that the public natural resources are of at least the same quantity, quality and diversity as they are for the present generation.”

-- Require that “all the proceeds from oil and gas extraction on State forest lands must be used to prevent and remedy the degradation and diminution of the in the areas affected by the oil and gas extracted and sold.”

-- Require that “DCNR administer the Oil and Gas Fund money that is a part of the corpus of the public trust, and use the money consistent with its expertise to ensure the public natural resources of our State forests and parks are managed sustainably consistent with the principles of ecosystem management.”

-- Require “the Respondents to keep detailed accounts of the type, amount and use of the Section 27 trust funds in the Oil and Gas Lease Fund.”

Click Here for a copy of the brief.

For more information on the challenge, visit the PA Environmental Defense Foundation  website.

NewsClip:

Meyer: Lawmakers Keep Questioning Wolf’s Intricate Web Of Environmental Funding

Related Stories:

PA Supreme Court Declares Law Diverting Oil & Gas Lease Funds To General Fund Unconstitutional

Gov. Wolf Proposes To Shift $75.7 Million From Environmental Funds To Pay Agency Operating Expenses Instead Of Funding Community-Based Projects

DEP Citizens Advisory Council Urges Senate, House To Adopt Funding Source For Hazardous Sites Cleanup Program Before It Becomes Insolvent

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[Posted: Feb. 26, 2019]

3/4/2019