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On Aug. 2, the PA Environmental Defense Foundation filed a petition in Commonwealth Court asking for the return of $1.3 billion in state forest drilling revenue to DCNR’s Oil and Gas Lease Fund in compliance with a PA Supreme Court decision on July 21.

The PA Supreme Court issued a decision again, declaring unconstitutional the transfer of monies derived from natural gas drilling in State Forests from DCNR’s Oil and Gas Fund to the General Fund, in order to balance the state budget and fund agency operations. Read more here.

The PA Supreme Court said in its July decision, “...we hold that the income generated from the revenue streams at issue must be returned to the corpus as a matter of trust law.” 

The Court continued, “We conclude that the bonus payments, rentals and penalty interest qualify as income and not the sale of trust assets. Since the Environmental Rights Amendment does not create an entitlement to income in the beneficiaries, the revenue generated from these Marcellus Shale leases must be returned to the corpus to benefit all the people.”

Repayment of funds

In its petition to Commonwealth Court, the Pa Environmental Defense Foundation requested the Court to order--

Accounting of Funds Transfered: “To order the State Treasurer to provide an accounting of the monies deposited into the Oil and Gas Lease Fund from Fiscal Year 2009-2010, through the present, the transfers or disbursements of these moneys to other funds, and the expenditure of these moneys by the Commonwealth from these funds.”

Repay $383 Million Unconstitutionally Transfered: “To compel the State Treasurer to pay $383,000,000 into the Oil and Gas Lease Fund to redress the Commonwealth’s breach of trust in transferring this amount from the Oil and Gas Lease Fund to the General Fund, pursuant to Sections 1604-E and 1605-E of the Fiscal Code and Section 1912 of the Supplemental General Appropriations Act of 2009, which the Pennsylvania Supreme Court has declared to be facially unconstitutional.”

Repay $800 Million Used for DCNR Expenses: “To compel the State Treasurer to pay money into the Oil and Gas Lease Fund to redress the Commonwealth’s breach of trust in appropriating money annually from the Oil and Gas Lease Fund to pay for DCNR’s general budgetary needs in lieu of General Fund appropriations, rather than using the money for projects to conserve and maintain our State Forest and Park public natural resources-- amount equal to $800 million.”

Repay over $200 Million Transferred To Marcellus Legacy Fund: “To compel the State Treasurer to pay money into the Oil and Gas Lease Fund to redress the Commonwealth’s breach of trust in transferring money from the Oil and Gas Lease Fund to the Marcellus Legacy Fund for disbursement to other funds for non-trust purposes-- an amount equal to over $200 million.”

Pay Interest on Funds Unconstitutionally Transfered: “PEDF requests this Honorable Court to order the Commonwealth to pay interest on money repaid to the Oil and Gas Lease Fund to redress the Commonwealth’s breach of trust by using proceeds from State Forest oil and gas leases for non-trust purposes, as set forth above.”

Order General Assembly and Governor Not to Breach Public Trust Again: “PEDF requests this Honorable Court to enjoin the Commonwealth from committing further breach of trust by spending any further proceeds from State Forest oil and gas leases for general budgetary matter, including DCNR annual operations, in lieu of General Fund appropriations, rather than using the proceeds for projects to conserve and maintain our State Forest and Park public natural resources.”

Read the entire petition.


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