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Pa. Envtl. Def. Found. v. Pennsylvania

ELR Citation: 47 ELR 20081
Nos. 10 MAP 2015, (Pa. , 06/20/2017)

The Pennsylvania Supreme Court held that the legislature’s diversion of oil and gas royalties from public lands to the general fund for non-conservation purposes violated the state constitution. In 1955, the legislature created an oil and gas lease fund, and required all rents and royalties from oil and gas leases to be deposited into the lease fund to be exclusively used for conservation, recreation, dams, or flood control or to match any federal grants made for those purposes. Forty years later, the legislature created the Department of Conservation and Natural Resources (DCNR), replacing the Department of Forests and Waters, for which all monies from the lease fund were to be appropriated. In 2008, DCNR began approving leases in the Marcellus Shale natural gas play that dramatically increased the money flowing into the lease fund. In 2009, the legislature capped this source of money for the lease fund at $50 million, and redirected all other monies to the general fund. Environmentalists challenged the redirection of funds, arguing that it violated the rights of all state citizens conferred by the state Environmental Rights Amendment. The lower court held that there is no constitutional mandate that monies derived from oil and gas leasing be reinvested into the conservation and maintenance of the Commonwealth's natural resources. The Supreme Court disagreed, holding that the amendments to the fiscal code were unconstitutional, and that the funds must be expended to conserve and manage the public’s natural resources for the benefit of the people. The court stated that the phrase “for the benefit of all the people” does not give the state the right to spend proceeds of the leasing on general budgetary items. The case was remanded for further proceedings.