Environmental Rights Amendment Disposal of Funds Generated from Sale of Public Natural Resources Constitutionality
Pa. Envt'l Def. Found. v. Commonwealth, PICS Case No. 17-1119 (Pa. June 20, 2017) Donohue, J.; Baer, J., concurring and dissenting; Saylor, C.J., dissenting. (63 pages).
Fiscal enactments diverting proceeds from sale and lease of public natural resources away from environmental conservation into the general fund violated commonwealth's obligation as trustee, since proceeds from trust assets were required to be returned to corpus of trust or dedicated to trust purposes. Order of the commonwealth court reversed.
The Pennsylvania Environmental Defense Foundation appealed from the order of the commonwealth court granting summary relief to the commonwealth and denying the foundation's application for summary relief. The foundation's application challenged the constitutionality of statutes relating to funds generated from the leasing of state forest and park lands for oil and gas extraction. The people had previously ratified the Environmental Rights Amendment, which was codified into Art. 1, 27 of the Pennsylvania Constitution. Section 27 held that the commonwealth's public natural resources were the common property of the people, and designated the commonwealth government as trustee of those resources to conserve and maintain them for the benefit of the people. Two decades later, the legislature created the Department of Conservation and Natural Resources, which was authorized to execute contracts and leases for the extraction of natural resources found in state forests and parks, and specifically appropriated all funds from oil and gas leases, previously allocated to the Department of Forests and Waters, to DCNR.
DCNR executed a lease for Marcellus Shale natural gas that brought in hundreds of millions of dollars in royalties. Thereafter, the legislature passed a law prohibiting the use of oil and gas lease funds without appropriation to the general fund by the legislature. Under pressure, DNCR leased additional acres for resource extraction, and the legislature appropriated hundreds of millions of dollars into the general fund, finding that the lease fund was not a constitutional trust, and using lease funds to support the overall budget of DCNR, rather than simply supporting its conservation efforts.
The foundation filed a declaratory judgment action against the commonwealth, contending that the government's decisions violated the rights of commonwealth citizens conferred by 27 and the lease fund act. The commonwealth court first ruled that the legislature's actions did not reflect a failure to act consistent with its trustee obligations under 27. The commonwealth further construed the foundation's claims as asserting that the commonwealth did not provide adequate funding to DCNR, rather than asserting that the commonwealth failed to abide by its duties as trustee, and declined to "second guess" legislative appropriations. The commonwealth court ruled that the lease fund was not a trust fund and that there was no constitutional mandate that funds derived from resource development be reinvested in conservation.