Pennsylvania Supreme Court Issues Major Decisions on Uniform Construction Code, Oil and Gas Act
The Pennsylvania Supreme Court recently issued major decisions dealing with the administration of the Uniform Construction Code and with local government’s authority with respect to oil and gas drilling activities.

In Allegheny Inspection Services, Inc. v. North Union Township and Allied Building Inspections v. Millcreek Township, Fairview Township, and Harborcreek Township, the court overturned the Commonwealth Court’s decisions and determined that townships have the authority under the Uniform Construction Code to designate a single agency to perform inspections.

Following are summaries of these important cases:

Allegheny Inspection Services, Inc. v. North Union Township and Allied Building Inspections v. Millcreek Township, Fairview Township, and Harborcreek Township

Townships may appoint a single agency for the purpose of exclusively conducting inspections required under the Pennsylvania Construction Code Act.

The Pennsylvania Supreme Court squarely addressed this issue in consolidated cases arising out of Fayette County and Erie County.  The dispute centered upon the interplay of two provisions of the Act, applicable to municipalities which opt to administer and enforce the UCC. 

Section 501 (b) states: “This Act may be administered and enforced by municipalities in any of the following ways: . . .”

1. Designate an employee to serve as a municipal code official;
2. Retain one or more construction code officials or third-party agencies to act on behalf of the municipality for administration and enforcement of this act;
3. Enter into an agreement with another municipality for joint administration and enforcement;
4. Contract with another municipality for administration and enforcement; or
5. Any combination of the above.

Section 501(d) provides that: “Nothing in this Act shall allow a municipality to prohibit a [qualified] construction code official . . . from performing inspections in the municipality.”

In its decision, the Commonwealth Court had reconciled the two provisions by holding that the terms “administer” and “enforce” in subsection (b) did not encompass inspections; and, that subsection (d) meant that municipalities must accept the reports of any licensed inspector.

On appeal to the Supreme Court, the aggrieved townships and PSATS, through its Township Legal Defense Partnership, argued for townships’ power to designate an exclusive inspection agency for administration and enforcement of the UCC.

The State Supreme Court reversed the Commonwealth Court’s holding and expressly held that municipalities may appoint a single third party inspection agency to administer and enforce the UCC. The Supreme Court based its holding on the plain meaning of the statutory language and on public policy considerations. The Supreme Court concluded that, “Safety would be undermined by a system that allows builders to handpick inspectors and then requires the entity charged with enforcement to accept the inspections without question.”

PSATS welcomes the Supreme Court’s decision and believes it both fulfills the legislature’s intent and prevents a situation that would have undermined the purposes of the Act and weakened townships’ ability to fully implement the code by controlling the inspection process.

The Supreme Court’s decision clarifies that:
     
1) Townships are in control – Permit holders, whether they are homeowners, property owners, design professionals, or contractors, do not have the authority to select an “inspector of their choice” to perform UCC inspections unless an opt-in township expressly allows them to choose one.

2) UCC regulations haven’t changed – Opt-in townships have the authority and responsibility to determine how the building code will be administered and who will enforce it. In other words, the options that are spelled out in the UCC remain unchanged.

3) Townships may reject inspection reports – Unless they choose otherwise, opt-in townships are not required to accept reports from UCC-certified inspectors who have not been approved to do work in the municipality.

4) UCC inspections are not governed by different criteria than other aspects of administration and enforcement – The court also made it clear that performing inspections goes hand in hand with the UCC’s administration and enforcement. Therefore, the Commonwealth Court erred when it determined that inspections are governed by different criteria. Whoever administers and enforces the code, the Supreme Court held, must have control over the inspection process to properly perform its duties under the law. 

In February, the Pennsylvania Supreme Court issued decisions in two cases that sharply define local government’s powers with respect to oil and gas drilling activities.

Oil and gas drilling is largely governed by the Pennsylvania Oil and Gas Act, which expressly supersedes all local ordinances, except those ordinances adopted under authority of the Municipalities Planning Code and the Flood Plain Management Act. Further, those “preserved” areas of local regulation may not impose conditions or requirements on the same features of well operations that are regulated by the act, nor may they pursue the same purposes as those set forth in the act.

In Huntley & Huntley, Inc. v. Borough Council of the Borough of Oakmont, the borough’s zoning ordinance allowed mineral extraction in a residential zone as a conditional use. Oil and gas interests challenged the ordinance, saying that certain setback requirements within the Oil and Gas Act demonstrated a state regulation of well location and preempted any local attempt to regulate well location. The Commonwealth Court had agreed with that argument and had invalidated this provision of the borough’s ordinance.

On appeal to the Pennsylvania Supreme Court, PSATS argued for the validity of local zoning powers in this factual situation. The Supreme Court reversed the Commonwealth Court’s decision and upheld the borough’s ordinance.  The Court noted a “how-versus-where” distinction, which is often applicable to activities over which the state has chosen to exercise primary control. That is, municipalities may regulate “where” such activities may be conducted, but not “how” they are conducted. The Court carefully reviewed the rules of preemption and concluded that the location of wells was not an operational feature regulated by the Oil and Gas Act, nor did the Oil and Gas Act’s “safety” purposes supersede the local safety purposes authorized by the MPC and embodies in the zoning provisions.

In the Supreme Court’s other decision, Range Resources – Appalachia LLC vs. Salem Township, Commonwealth of Pennsylvania, the ordinance in question went beyond customary zoning concerns and sought to regulate items which were arguably operational activities and within the exclusive control of the state statute. Significantly, the ordinance included a local permitting requirement and invested a degree of discretion in the township as to whether or not the permit should be issued. Further, the Supreme Court found that some of the ordinance’s provisions directly targeted oil and gas drilling. Accordingly, the Supreme Court invalidated the ordinance because it addressed subject matter preempted by the Oil and Gas Act. The Supreme Court’s closing paragraph is especially instructive:

“In sum, not only does the ordinance purport to police many of the same aspects of oil and gas extraction activities that are addressed by the Act, but the comprehensive and restrictive nature of its regulatory scheme represents an obstacle to the legislative purposes underlying the Act, thus implicating principles of conflict preemption. Furthermore, its stated purposes overlap substantially with the goals as set forth in the Oil and Gas Act, thus implicating the second statutory basis for express preemption of MPC-enabled local ordinances.  In view of the ordinance’s focus solely on regulating oil and gas drilling operations, together with the broad preemptive scope of Section 602 of the Act with regard to such directed local regulations, we agree with the Common Pleas Court’s conclusion that each of the oil and gas regulations challenged in Appellees’ complain is preempted by the Oil and Gas Act and its associated administrative regulations.”