[J-35-2016]

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

SAYLOR, C.J., EAKIN, BAER, TODD, DONOHUE, DOUGHERTY, WECHT, JJ.

PENNSYLVANIA ENVIRONMENTAL 

DEFENSE FOUNDATION,

Appellant

v.

COMMONWEALTH OF PENNSYLVANIA, 

AND GOVERNOR OF PENNSYLVANIA, 

TOM WOLF, IN HIS OFFICIAL CAPACITY 

AS GOVERNOR,

Appellees

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No. 10 MAP 2015

Appeal from the Order of the 

Commonwealth Court at No. 228 MD 

2012 dated January 7, 2015

ARGUED: March 9, 2016

OPINION

JUSTICE DONOHUE DECIDED: June 20, 2017

In 1971, by a margin of nearly four to one, the people of Pennsylvania ratified a 

proposed amendment to the Pennsylvania Constitution’s Declaration of Rights, formally

and forcefully recognizing their environmental rights as commensurate with their most 

sacred political and individual rights. Article I, Section 27 of the Pennsylvania 

Constitution provides:

The people have a right to clean air, pure water, and to the 

preservation of the natural, scenic, historic and esthetic 

values of the environment. Pennsylvania’s public natural 

resources are the common property of all the people, 

including generations yet to come. As trustee of these 

resources, the Commonwealth shall conserve and maintain 

them for the benefit of all the people.
[J-35-2016] - 2

Pa. Const. art. I, § 27. In this case, we examine the contours of the Environmental 

Rights Amendment in light of a declaratory judgment action brought by the 

Pennsylvania Environmental Defense Foundation (“Foundation”), an environmental 

advocacy entity, challenging, inter alia, the constitutionality of statutory enactments 

relating to funds generated from the leasing of state forest and park lands for oil and 

gas exploration and extraction. Because state parks and forests, including the oil and 

gas minerals therein, are part of the corpus of Pennsylvania’s environmental public 

trust, we hold that the Commonwealth, as trustee, must manage them according to the 

plain language of Section 27, which imposes fiduciary duties consistent with 

Pennsylvania trust law. We further find that the constitutional language controls how

the Commonwealth may dispose of any proceeds generated from the sale of its public 

natural resources. After review, we reverse in part, and vacate and remand in part, the 

Commonwealth Court’s order granting summary relief to the Commonwealth and 

denying the Foundation’s application for summary relief.

I. History and Enactment of the Environmental Rights Amendment

Section 27 contains an express statement of the rights of the people and the 

obligations of the Commonwealth with respect to the conservation and maintenance of 

our public natural resources. In Robinson Township v. Commonwealth, 83 A.3d 901 

(Pa. 2013) (plurality), a plurality of this Court carefully reviewed the reasons why the 

Environmental Rights Amendment was necessary, the history of its enactment and 

ratification, and the mischief to be remedied and the object to be attained. At the outset

of this opinion, we reiterate this historical background, which serves as an important 

reminder as we address the issues presented in the present case:
[J-35-2016] - 3

It is not a historical accident that the Pennsylvania 

Constitution now places citizens' environmental rights on par 

with their political rights. Approximately three and a half 

centuries ago, white pine, Eastern hemlock, and mixed 

hardwood forests covered about 90 percent of the 

Commonwealth's surface of over 20 million acres. Two 

centuries later, the state experienced a lumber harvesting 

industry boom that, by 1920, had left much of Pennsylvania 

barren. “Loggers moved to West Virginia and to the lake 

states, leaving behind thousands of devastated treeless 

acres,” abandoning sawmills and sounding the death knell 

for once vibrant towns. Regeneration of our forests (less the 

diversity of species) has taken decades. 

Similarly, by 1890, “game” wildlife had dwindled “as a 

result of deforestation, pollution and unregulated hunting and 

trapping.” As conservationist John M. Phillips wrote, “In 

1890, the game had practically disappeared from our state.... 

We had but few game laws and those were supposed to be 

enforced by township constables, most of whom were 

politicians willing to trade with their friends the lives of our 

beasts and birds in exchange for votes.” In 1895, the 

General Assembly created the Pennsylvania Game 

Commission and, two years later, adopted a package of new 

game laws to protect endangered populations of deer, elk, 

waterfowl, and other game birds. Over the following 

decades, the Game Commission sought to restore 

populations of wildlife, by managing and restocking species 

endangered or extinct in Pennsylvania, establishing game 

preserves in state forests, and purchasing state game lands. 

Sustained efforts of the Game Commission over more than a 

century (coupled with restoration of Pennsylvania's forests) 

returned a bounty of wildlife to the Commonwealth. 

The third environmental event of great note was the 

industrial exploitation of Pennsylvania's coalfields from the 

middle of the nineteenth well into the twentieth century. 

During that time, the coal industry and the steel industry it 

powered were the keystone of Pennsylvania's increasingly 

industrialized economy. The two industries provided 

employment for large numbers of people and delivered 

tremendous opportunities for small and large investors. 

“[W]hen coal was a reigning monarch,” the industry operated 

“virtually unrestricted” by either the state or federal 

government. The result, in the opinion of many, was 

devastating to the natural environment of the coal-rich 
[J-35-2016] - 4

regions of the Commonwealth, with long-lasting effects on 

human health and safety, and on the esthetic beauty of 

nature. These negative effects include banks of burning or 

non-burning soft sooty coal and refuse; underground mine 

fires; pollution of waters from acid mine drainage; 

subsidence of the soil; and landscapes scarred with strip 

mining pits and acid water impoundments. In the mid–

1960s, the Commonwealth began a massive undertaking to 

reclaim over 250,000 acres of abandoned surface mines and 

about 2,400 miles of streams contaminated with acid mine 

drainage, which did not meet water quality standards. The 

cost of projects to date has been in the hundreds of millions 

of dollars, and the Department of Environmental Protection 

has predicted that an estimated 15 billion dollars is in fact 

necessary to resolve the problem of abandoned mine 

reclamation alone. Id.

The overwhelming tasks of reclamation and 

regeneration of the Commonwealth's natural resources, 

along with localized environmental incidents (such as the 

1948 Donora smog tragedy in which twenty persons died of 

asphyxiation and 7,000 persons were hospitalized because 

of corrosive industrial smoke; the 1959 Knox Mine disaster in 

which the Susquehanna River disappeared into the Pittston 

Coal Vein; the 1961 Glen Alden mine water discharge that 

killed more than 300,000 fish; and the Centralia mine fire 

that started in 1962, is still burning, and led to the relocation 

of all residents in 1984) has led to the gradual enactment of 

statutes protecting our environment. The drafters of the 

Environmental Rights Amendment recognized and 

acknowledged the shocks to our environment and quality of 

life:

We seared and scarred our once green and 

pleasant land with mining operations. We 

polluted our rivers and our streams with acid 

mine drainage, with industrial waste, with 

sewage. We poisoned our ‘delicate, pleasant 

and wholesome’ air with the smoke of steel 

mills and coke ovens and with the fumes of 

millions of automobiles. We smashed our 

highways through fertile fields and thriving city 

neighborhoods. We cut down our trees and 

erected eyesores along our roads. We uglified 

our land and we called it progress.
[J-35-2016] - 5

1970 Pa. Legislative Journal–House at 2270 (quoting 

anonymous 1698 description of Penn's Woods air).

With these events in the recent collective memory of 

the General Assembly, the proposed Environmental Rights 

Amendment received the unanimous assent of both 

chambers during both the 1969–1970 and 1971–1972 

legislative sessions. Pennsylvania voters ratified the

proposed amendment of the citizens' Declaration of Rights 

on May 18, 1971, with a margin of nearly four to one, 

receiving 1,021,342 votes in favor and 259,979 opposed. 

The decision to affirm the people's environmental 

rights in a Declaration or Bill of Rights, alongside political 

rights, is relatively rare in American constitutional law. In 

addition to Pennsylvania, Montana and Rhode Island are the 

only other states of the Union to do so. See Pa. Const. art. I, 

§ 27 (1971); Mt. Const. art. II, § 3 (1889); R.I. Const. art. I, § 

17 (1970). Three other states—Hawaii, Illinois, and 

Massachusetts—articulate and protect their citizens' 

environmental rights in separate articles of their charters. 

See Hi. Const. art. XI, §§ 1, 9 (1978); Ill. Const. art. XI, §§ 1, 

2 (1971–72); Ma. Const. amend. 49 (1972). Of these three 

states, Hawaii and Illinois, unlike Pennsylvania, expressly 

require further legislative action to vindicate the rights of the 

people. By comparison, other state charters articulate a 

“public policy” and attendant directions to the state 

legislatures to pass laws for the conservation or protection of 

either all or enumerated natural resources. See, e.g., Ak. 

Const. art. VIII, §§ 1–18 (1959); Colo. Const. art. XXVII, § 1 

(1993); La. Const. art. IX, § 1 (1974); N.M. Const. art. XX, § 

21 (1971); N.Y. Const. art. XIV, §§ 1–5 (1941); Tx. Const. 

art. XVI, § 59 (1917); Va. Const. art. XI, §§ 1–4 (1971). 

Some charters address the people's rights to fish and hunt, 

often qualified by the government's right to regulate these 

activities for the purposes of conservation. See, e.g., Ky. 

Const. § 255A (2012); Vt. Const. Ch. II, § 67 (1777); Wi. 

Const. art. I, § 26 (2003). Still other state constitutions simply 

authorize the expenditure of public money for the purposes 

of targeted conservation efforts. See, e.g., Or. Const. art. IX–

H, §§ 1–6 (1970); W.V. Const. art. VI, §§ 55, 56 (1996). 

Finally, many of the remaining states do not address natural 

resources in their organic charters at all. See, e.g., Nv. 

Const. art. I, § 1 et seq.
[J-35-2016] - 6

That Pennsylvania deliberately chose a course 

different from virtually all of its sister states speaks to the 

Commonwealth's experience of having the benefit of vast 

natural resources whose virtually unrestrained exploitation, 

while initially a boon to investors, industry, and citizens, led 

to destructive and lasting consequences not only for the 

environment but also for the citizens' quality of life. Later 

generations paid and continue to pay a tribute to early 

uncontrolled and unsustainable development financially, in 

health and quality of life consequences, and with the 

relegation to history books of valuable natural and esthetic 

aspects of our environmental inheritance. The drafters and 

the citizens of the Commonwealth who ratified the 

Environmental Rights Amendment, aware of this history, 

articulated the people's rights and the government's duties to 

the people in broad and flexible terms that would permit not 

only reactive but also anticipatory protection of the 

environment for the benefit of current and future generations. 

Moreover, public trustee duties were delegated 

concomitantly to all branches and levels of government in 

recognition that the quality of the environment is a task with 

both local and statewide implications, and to ensure that all 

government neither infringed upon the people's rights nor 

failed to act for the benefit of the people in this area crucial 

to the well-being of all Pennsylvanians.

Id. at 960-63 (footnotes and some citations omitted).

II. Factual and Procedural Background of the Present Case

While the issues in this case arise from the recent leasing of Commonwealth 

forest and park lands for Marcellus Shale gas extraction, the Commonwealth has a 

history of leasing its land to private parties for oil and gas exploration dating back to 

1947. Pa. Envtl. Def. Found. v. Com., 108 A.3d 140, 143 (Pa. Cmwlth. 2015) (“PEDF”); 

see also Prelim. Inj. Hr’g Ex. R-8 at 35 (Governor’s Marcellus Shale Advisory 

Commission Report dated July 22, 2011). In 1955, the Legislature enacted the Oil and 

Gas Lease Fund Act (“Lease Fund Act”), 71 P.S. §§ 1331-1333, requiring “[a]ll rents 

and royalties from oil and gas leases” of Commonwealth land to be deposited in the “Oil 
[J-35-2016] - 7

and Gas Lease Fund” (“Lease Fund”) to be “exclusively used for conservation, 

recreation, dams, or flood control or to match any Federal grants which may be made 

for any of the aforementioned purposes.” 71 P.S. § 1331.1 When enacted, the Lease 

Fund Act further provided the Secretary of Forests and Waters with the discretion “to 

determine the need for and the location of any project authorized.” 71 P.S. § 1332.

Additionally, the Lease Fund Act provided that “[a]ll the moneys from time to time paid” 

 

1

 In its entirety, the Oil and Gas Lease Fund Act provides as follows:

§ 1331. Source and use of fund

All rents and royalties from oil and gas leases of any land 

owned by the Commonwealth, except rents and royalties 

received from game and fish lands, shall be placed in a 

special fund to be known as the “Oil and Gas Lease Fund” 

which fund shall be exclusively used for conservation, 

recreation, dams, or flood control or to match any Federal 

grants which may be made for any of the aforementioned 

purposes.

§ 1332. Need for and location of projects; acquisition of 

lands

It shall be within the discretion of the Secretary of Forests 

and Waters to determine the need for and the location of any 

project authorized by this act. The Secretary of Forests and 

Waters shall have the power to acquire in the name of the 

Commonwealth by purchase, condemnation or otherwise 

such lands as may be needed.

§ 1333. Appropriation

All the moneys from time to time paid into the “Oil and Gas 

Lease Fund” are specifically appropriated to the Department 

of Forests and Waters to carry out the purposes of this act. 

71 P.S. §§ 1331-1333. As noted infra, the Department of 

Forests and Waters has been replaced by the Pennsylvania 

Department of Conservation and Natural Resources (DCNR) 

for purposes of the Lease Fund Act, see 71 P.S. § 

1340.304(c).
[J-35-2016] - 8

into the Fund “are specifically appropriated to the Department of Forests and Waters to 

carry out the purposes of this act.” 71 P.S. § 1333.

In 1995, the Legislature enacted the Conservation and Natural Resources Act 

(“CNRA”), which created the Pennsylvania Department of Conservation and Natural 

Resources (“DCNR”) as a “cabinet-level advocate” for the State parks, forests, and 

other natural resources. 71 P.S. § 1340.101(b)(1). Referencing the Environmental 

Rights Amendment, Article I, Section 27, of the Pennsylvania Constitution, the CNRA 

indicates that the prior “structure of the Department of Environmental Resources 

impede[d] the Secretary of Environmental Resources from devoting enough time, 

energy and money to solving the problems facing our State parks and forests,” such 

that the state parks and forests had “taken a back seat to other environmental issues . . 

. .” 71 P.S. § 1340.101(a)(7), (8).

The CNRA sets forth the DCNR’s primary mission as follows:

[T]o maintain, improve and preserve State parks, to manage 

State forest lands to assure their long-term health, 

sustainability and economic use, to provide information on 

Pennsylvania’s ecological and geologic resources and to 

administer grant and technical assistance programs that will 

benefit rivers conservation, trails and greenways, local 

recreation, regional heritage conservation and environmental 

education programs across Pennsylvania.

71 P.S. § 1340.101(b)(1). To pursue this mission, the DCNR is “empowered to make 

and execute contracts or leases in the name of the Commonwealth for the mining or 

removal of any valuable minerals that may be found in State forests” if the DCNR 

determines that it “would be for the best interests of this Commonwealth.” 71 P.S. § 

1340.302(a)(6). Moreover, the DCNR replaced the Department of Forests and Waters 

as the relevant entity for purposes of the Lease Fund. 71 P.S. § 1340.304. 
[J-35-2016] - 9

Accordingly, the CNRA altered the Lease Fund to provide that “all moneys” paid in to 

the Lease Fund were “specifically appropriated to” the DCNR. 71 P.S. § 1333.

In August 2008, after conducting an environmental review,2 DCNR began its first 

foray into the Marcellus Shale natural gas play3by approving a lease sale of 74,000 

acres (“2008 Leases”). PEDF, 108 A.3d at 143-44. The leases generated funds in the 

form of rents and royalties. The rents were comprised of annual rental fees, an 

example of which ranged from $20-35 per acre, in addition to large initial “bonus 

payments” ranging in the millions of dollars. Id. at 144 (citing Prelim. Inj. Hr’g Ex. R-1). 

In addition, the leases further provided for royalties when gas is extracted, with the 

payment based upon the amount of marketable gas extracted. Id. The Marcellus Shale 

leases dramatically increased the money flowing into the Lease Fund. Indeed, the 

cumulative proceeds from Commonwealth oil and gas leases from 1947-2008 totaled 

$165 million, where the oil and gas proceeds in 2009 alone exceeded $167 million, the 

 

2

 The DCNR’s findings were published and entitled, “August 2008 Oil and Gas Lease 

Sale State Forest Environmental Review.” Prelim. Inj. Hr’g Ex. R-5. The DCNR 

summarized its conclusions:

This environmental review is based on the [Bureau of 

Forestry’s] deliberations on the scope, potential impacts and 

benefits of these deep gas plays. Based on these 

deliberations, the [DCNR] decided to pursue this opportunity 

under a portion of the State Forests where our management 

protocols will support natural gas exploration and 

development as well as satisfy our legal mandates to offer 

State Forest land for this purpose.

Id. at 2 (unnumbered).

3

 The U.S. Energy Information Administration defines a “play” as “[a] set of known or 

postulated oil and gas accumulations sharing similar geologic, geographic, and 

temporal properties, such as source rock, migration pathway, timing, trapping 

mechanism, and hydrocarbon type.” U.S. Energy Information Administration Glossary,

http://www.eia.gov/tools/glossary/index.cfm (last visited June 15, 2017).
[J-35-2016] - 10

bulk of which derived from the initial bonus payments (which are categorized under the 

lease terms as rental payments) from the 2008 Leases. Prelim. Inj. Hr’g Ex. R-14 at 

200-201 (“2014 Shale Gas Monitoring Report”).

Following the 2008 Leases, the DCNR “decided not to enter into further leases 

for natural gas extraction on State lands pending study of the ‘Marcellus play’ and 

development within the 660,000 acres of land already leased within the Marcellus Shale 

region,” which included previously leased mineral rights and lands that were not owned 

by the Commonwealth.4 PEDF, 108 A.3d at 144. The former head of the DCNR 

testified that “we felt strongly that[,] until we could further develop and monitor what was 

going on[,] ... we believed there should be no further gas leasing because we were 

going to be watching a tremendous amount of gas activity on the state forest for the 

next 50 years.” Prelim. Inj. Hr’g. Notes of Testimony, 5/28/2015, at 36. Notwithstanding 

this concern, the DCNR received substantial pressure, as described below, between 

2008 and 2014 from the executive and legislative branches to lease more state land as 

a means to reduce the substantial shortfalls in Pennsylvania’s general budgets.

During the 2009-10 budget process, the Legislature added Article XVI-E to the 

Fiscal Code addressing Marcellus Shale leasing (“2009 Fiscal Code Amendments”). 

Following a definitional section, the article addresses appropriations to the Lease Fund:

Notwithstanding any other provision of law and except as 

provided in section 1603-E [providing for an annual 

appropriation to DCNR of up to $50 million of royalties], no 

money in the [Lease Fund] from royalties may be expended 

unless appropriated or transferred to the General Fund by 

the General Assembly from the fund. In making 

 

4

 The acreage amounts utilized by the parties are not entirely consistent. The specific 

number of acres, however, is irrelevant to the issues before this Court.
[J-35-2016] - 11

appropriations, the General Assembly shall consider the 

adoption of an allocation to municipalities impacted by a 

Marcellus well.

72 P.S. § 1602-E. This provision wrought a dramatic change in the flow of royalties 

from the Lease Fund. While Section 1333 of the Lease Fund Act previously provided for 

the automatic appropriation of “all moneys” (which would include both rents and 

royalties) paid into the Lease Fund to be appropriated to the DCNR, the newly enacted 

Section 1602-E granted the General Assembly authority over the royalties in the Lease 

Fund (other than Section 1603-E’s $50 million annual appropriation to the DCNR) by 

providing that the “royalties may not be expended unless appropriated or transferred to 

the General Fund by the General Assembly.” Id.

The next provision of the 2009 Fiscal Code Amendments, Section 1603-E,5limits 

the DCNR’s annual allocation of royalties to an amount “up to $50 million.” While $50 

million was substantially greater that any pre-2009 royalty receipts, it was not 

guaranteed and also functions to limit the percentage of the Lease Fund royalties 

directed to the DCNR, which is particularly relevant as the DCNR had anticipated 

 

5

 72 P.S. § 1603-E. Department of Conservation and Natural Resources

Subject to the availability of money in the fund following transfers, up to 

$50,000,000 from the fund from royalties shall be appropriated annually to 

the [DCNR] to carry out the purposes set forth in the act of December 15, 

1955 (P.L. 865, No. 256), entitled “An act requiring rents and royalties 

from oil and gas leases of Commonwealth land to be placed in a special 

fund to be used for conservation, recreation, dams, and flood control; 

authorizing the Secretary of Forests and Waters to determine the need for 

and location of such projects and to acquire the necessary land.” The 

[DCNR] shall give preference to the operation and maintenance of State 

parks and forests.

72 P.S. § 1603-E (footnote deleted).
[J-35-2016] - 12

receiving the full amount of the rents and royalties to allow it to oversee the rapid 

expansion of drilling on state land when it decided to enter into the 2008 Leases. 

Additionally, while the Lease Fund Act requires that the funds generated by leasing be 

“exclusively used for conservation, recreation, dams, or flood control or to match 

[related] Federal grants,” 71 P.S. § 1331, the newly-enacted Section 1603-E designates 

that preference be given instead “to the operation and maintenance of State parks and 

forests.” 72 P.S. § 1603-E.

Section 1604-E of the 2009 Fiscal Code Amendments also required a transfer of 

$60 million in fiscal year 2009-2010 from the Lease Fund to the General Fund, which 

was not restricted to conservation purposes. 72 P.S. § 1604-E.6 Finally, the 

Supplemental General Appropriations Act of 2009 directed a transfer of $143 million 

from the Lease Fund to the General Fund. Act of Oct. 9, 2009, P.L. 779, No. 10A, § 

1912.

Thereafter, the DCNR abandoned its self-imposed moratorium on leasing 

additional state land for Marcellus Shale development “as a direct result of certain line 

items contained within the budget agreement and fiscal code for FY 2009-10.” Prelim. 

Inj. Hr’g Ex. R-6 at 5 (unnumbered) (FY 2009-2010 Oil & Gas Lease Sale State Forest 

Environmental Review). After again conducting an environmental review,7the DCNR 

leased approximately 32,000 acres of state forest land in January 2010 (“January 2010 

 

6

 72 P.S. § 1604-E provides, “Notwithstanding section 1603-E or any other provision of 

law, in fiscal year 2009-2010 the amount of $60,000,000 shall be transferred from the 

fund to the General Fund.” 72 P.S. § 1604-E

7

 The DCNR’s November 2009 review was published as “FY 2009-10 Oil & Gas Lease 

Sale State Forest Environmental Review.” Prelim. Inj. Hr’g Ex. R-6.
[J-35-2016] - 13

Leases”). Although, prior to the lease sale, the DCNR Secretary expressed significant 

concern regarding further leasing,8the DCNR, in its published environmental review, 

concluded that “the impending [lease] sale still meets the Bureau’s management 

guidelines and protocols.” Id.

Again, following the January 2010 leases, the DCNR intended to halt any further 

leasing to allow study of the current leases and to avoid overextending its ability to 

manage them. Nevertheless, due to pressure from the Governor and pending budget 

transfers, the DCNR leased an additional 33,000 acres in May 2010 (“May 2010 

Leases”) to generate funds after conducting an environmental review.9 A few months 

later, the General Assembly enacted an appropriation for Fiscal Year 2010-2011 

transferring $180 million from the Lease Fund to the General Fund.10

Just before leaving office in January 2011, Governor Rendell signed an executive 

order imposing a moratorium on future leasing of state forest and park lands for oil and 

gas development, finding that further leasing would “jeopardize DCNR’s ability to fulfill 

its duty to conserve and maintain this public natural resource.” Prelim. Inj. Hr’g Ex. P-8 

at 2.

 

8

 See Prelim. Inj. Hr’g Ex. P-3 (Letter of DCNR Secretary Michael DiBerardinis to 

Governor Edward Rendell, dated March 27, 2009).

9

 The DCNR’s review was published as “May 2010 Oil & Gas Lease Offering State 

Forest Environmental Review.” Prelim. Inj. Hr’g Ex. R-7. The DCNR stated that the 

lease proposal “seeks to minimize environmental and social impacts while returning the 

mandated $180 million needed for the Commonwealth budget.” Id. at 1 (unnumbered). 

The DCNR further concluded that the lease sale “conformed to the Bureau’s stated 

policy and goals.” Id. at 5.

10

 In 2010, 72 P.S. § 1605-E, entitled “Additional transfers” provided, “Notwithstanding 

section 1603-E or any other provision of law, in fiscal year 2010-2011, the amount of 

$180,000,000 shall be transferred from the fund to the General Fund.”
[J-35-2016] - 14

For the first three years of Governor Corbett’s administration, the Fiscal Code 

was not amended to provide transfers from the Lease Fund to the General Fund. 

Instead, the General Appropriations Act for 2011 and 2012 provided appropriations to 

the DCNR from both the General Fund and the Lease Fund (specifically from royalties), 

in addition to the up to $50 million in royalties provided annually by Section 1603-E of

the 2009 Fiscal Code Amendments and the continued flow of all rental fees from oil and 

gas leases pursuant to Section 1333 of the Lease Fund Act. PEDF, 108 A.3d at 148-

49. The 2013 General Appropriations Act decreased the appropriation to the DCNR 

from the General Fund and increased the appropriation from the Lease Fund to the 

DCNR, resulting in a larger portion of monies from the Lease Fund being used to pay 

for the DCNR’s operational expenses, which had previously been funded by the 

General Fund, and thus reduced the amount of monies available for the DCNR’s 

conservation activities. Id. at 149.

Although the first few years of the Corbett administration did not witness 

appropriations from the Lease Fund directly to the General Fund, Act 13 of 2012, which 

amended the Lease Fund Act, required other transfers from the Lease Fund. 

Specifically, Act 13 created the Marcellus Legacy Fund, which was funded in part by 

fees on unconventional wells but also by annual appropriations from the Lease Fund in 

increasing amounts beginning with $20 million in 2013 and rising to $50 million for all 

years after 2015. 58 Pa.C.S. §§ 2315(a.1), 2505.11 The monies in the Marcellus 

 

11 It is unclear whether the transfers from the Lease Fund to the Marcellus Legacy Fund 

derive from royalties, rents, bonus bid payments, or from some combination of the three 

sources. 
[J-35-2016] - 15

Legacy Fund are earmarked for the Environmental Stewardship Fund and the 

Hazardous Sites Cleanup Fund, providing capital for projects not controlled by the 

DCNR. Id.

In May 2014, Governor Corbett modified the moratorium banning the leasing of 

State lands and instead forbade any leasing that “would result in additional surface 

disturbances on state forest or state park lands.” Prelim. Inj. Hr’g Ex. P-8 at 3. The 

order further provided that the royalties from the additional leasing would be used to 

repair the infrastructure of the forest and park lands, to acquire lands of “high 

conservation value or ecological importance,” and to acquire private oil, gas, and 

mineral rights currently owned by private parties under state surface lands. Id.

The 2014-2015 General Appropriations Act again included increased 

appropriations of royalties from the Lease Fund to the DCNR that were mirrored by 

decreased appropriations from the General Fund to the DCNR. PEDF, 108 A.3d at 151. 

In 2014, the Fiscal Code was amended again to address Marcellus Shale leasing 

(“2014 Fiscal Code Amendments”). Specifically, Section 1605-E of the Fiscal Code was 

amended to provide for an appropriation of $95 million from the Lease Fund to the 

General Fund. 72 P.S. § 1605-E(b).12

The 2014 Fiscal Code Amendments also added specific legislative findings in 

support of the increased leasing of state land and the transfers of capital from the Lease 

Fund. These findings postulate that Marcellus Shale leasing “is necessary to obtain the 

 

12

 Section 1605-E(b) provides, “Notwithstanding section 1603-E or any other provision 

of law, in fiscal year 2014-2015, the amount of $95,000,000 shall be transferred from 

the fund to the General Fund.” 72 P.S. § 1605-E. As with Sections 1604-E and 1605-

E(a), Section 1605-E(b) does not indicate on its face whether it relates to royalties, 

rents, or bonus bid payments, or some combination of the three. 
[J-35-2016] - 16

revenue necessary to effectuate the . . . General Appropriations Act of 2014.” 72 P.S. 

§ 1601.1-E (1). Additionally, the findings state that “[t]he fund is not a constitutional 

trust.” 72 P.S. § 1601.1-E (6). After recognizing that the increase in the Fund was due 

to the Marcellus Shale development, the Legislature indicates that “[t]he 

Commonwealth’s role as trustee of the public’s natural resources is broader and more 

comprehensive than just conserving the State forest and parks.” 72 P.S. § 1601.1-E 

(7), (8). It further affirmatively instructs that “it is in the best interest of the 

Commonwealth to lease oil and gas rights in State forests and parks” if the DCNR 

employs lease protections and best management practices and “maintains a balance of 

money in the [Lease Fund] to carry out [DCNR’s] obligation to protect State forest and 

park land and other environmental activities.” 72 P.S. § 1601.1-E (9)(iii). Finally, the 

statute provides that transfers from the Fund to the General Fund are permissible if the 

balance of money in the Fund is “adequate to achieve the purposes” of paragraph nine,

72 P.S. § 1601.1-E (10), which directs the DCNR to make state forest and park land 

leasing decisions based on all the Commonwealth’s interests.

13

 72 P.S. § 1601.1-E (9).

 

13

 72 P.S. § 1601.1-E, entitled “Legislative Findings” includes the following as 

paragraph 9:

The General Assembly affirms its intent that:

(i) The [DCNR] should continue the operation of the shale 

gas monitoring activities program to monitor, evaluate and 

report the impacts of shale gas activities in State forest and, 

in consultation with the Governor’s Office, utilize data 

received from ongoing monitoring to adjust its management 

planning and practices.

(ii) The [DCNR] should consider the State forest and park 

lands as one of the Commonwealth’s interests when 

considering whether or not to lease additional State forest 

(continued...)
[J-35-2016] - 17

Distinguished Professor John C. Dernbach of the Widener University Law School 

Environmental Law and Sustainability Center14 recently summarized the significance of 

Fiscal Code amendments for purposes of the claims at bar:

Three legislative amendments to the state fiscal code

between 2008 and 2014 redirected a total of $335 million

that would have been used for conservation purposes under

the [Lease Fund Act] to the general fund, where it is 

appropriated for a variety of state government purposes. In 

addition, the Legislature prevented DCNR from spending

any [Lease Fund Act] royalties without prior legislative 

authorization. Finally, the Legislature began using [Lease 

Fund] revenue to support the overall budget of DCNR, rather 

than obtaining that budget money from the general fund and 

using [Lease Fund] money for conservation purposes related 

to oil and gas extraction

John C. Dernbach, The Potential Meanings of a Constitutional Public Trust, 45 Envtl. L. 

463, 488 (2015) (footnotes omitted)).

 

(...continued)

and park lands and determining what is in the best interests 

of the Commonwealth. Interest involved in decisions relating 

to leasing State forest and park lands should not be made to 

the exclusion of all other interests of the Commonwealth.

(iii) Notwithstanding any other law to the contrary, it is in the 

best interest of the Commonwealth to lease oil and gas 

rights in State forests and parks if the [DCNR]:

(A) in consultation with the Governor, continues strong and 

effective lease protections, best management practices and 

ongoing monitoring programs on the impact of gas 

operations; and

(B) maintains a balance of money in the fund to carry out the 

[DCNR’s] statutory obligation to protect State forest and park 

land and other environmental activities.

14

 Writing in support of neither party, Professor Dernbach filed a scholarly amicus brief 

in the case at bar.
[J-35-2016] - 18

Acknowledging the structural changes in the source of the funding, the 

Commonwealth nevertheless emphasizes that the total annual appropriations to the 

DCNR from the various sources ranged between $69 million in 2012-2013 to $122 

million in 2014-2015 and further observes that the DCNR received approximately fifty 

percent of the over $926 million in total oil and gas lease revenues accumulated from 

Fiscal Year 2008-2009 through Fiscal Year 2014-2015 (then-projected).

Commonwealth’s Brief at 18 (citing Respondent’s Cross-Motion for Summary Relief, 

Exhibit M (Governor’s Budget Office Oil and Gas Leasing Revenue and Uses 

Information dated August 21, 2014)).

III. Commonwealth Court Proceedings

Appellant, the Foundation, brought a claim in the Commonwealth Court under the 

fiduciary provisions of the Declaratory Judgment Act against the Commonwealth of 

Pennsylvania and the Governor, in his official capacity (collectively, “the 

Commonwealth”) regarding the 2009-2015 budget related decisions that resulted in the 

additional lease sales.15 The Foundation contends that these decisions violated the 

 

15

 The Declaratory Judgment Act provides in relevant part:

§ 7535. Rights of fiduciaries and other persons

Any person interested, as or through an executor, 

administrator, trustee, guardian, or other fiduciary, creditor, 

devisee, legatee, heir, next of kin, or cestui que trust, in the 

administration of a trust . . . may have a declaration of rights 

or legal relations in respect thereto:

* * * *

(2) To direct the executors, administrators, or trustees to do 

or abstain from doing any particular act in their fiduciary 

capacity.

(continued...)
[J-35-2016] - 19

rights of all Commonwealth citizens conferred by the Environmental Rights Amendment, 

the CNRA, and the Lease Fund Act. PEDF, 108 A.3d at 154. The Foundation filed the 

initial action in March 2012 and amended the action with regard to subsequent 

legislation. The case at bar addresses cross-applications for summary relief, which 

allow a court to grant relief only if a party’s “right to judgment is clear and no material 

issues of fact are in dispute.” Jubelirer v. Rendell, 953 A.2d 514, 521 (Pa. 2008) 

(citations omitted).16

The Commonwealth Court observed that the Foundation filed a brief in excess of 

100 pages raising over twenty issues focused primarily on Section 27’s protection of the 

Commonwealth’s natural resources. The court found that some of the issues were 

inappropriate for decision under the Declaratory Judgment Act (such as issues relating 

to budget proposals rather than enactments) and dismissed others for failure to join the 

lessees of the leases, whom the court deemed indispensable parties.17

The court narrowed the remaining issues before it to three questions:

(1) Whether Sections 1602–E and 1603–E of the Fiscal 

Code, which respectively provide that the General Assembly 

shall appropriate all royalty monies [of] the Lease Fund and 

 

(...continued)

42 Pa.C.S. § 7535.

16

 Shortly after the Commonwealth Court issued its decision, and while the lawsuit was 

pending, Governor Wolf imposed a moratorium on additional leases of state forest and 

park land, effective January 29, 2015. See Exec. Order: 2015-03 – Leasing of State 

Forest and State Park Land for Oil and Gas Development, available at 

https://www.governor.pa.gov/executive_orders/executive-order-2015-03-leasing-ofstate-forest-and-state-park-land-for-oil-and-gas-development/.

17

 The Commonwealth Court denied the Commonwealth’s request for a declaration 

regarding the Governor’s authority to override decisions of the DCNR in regard to oil 

and gas leasing. PEDF, 108 A.3d at 173.
[J-35-2016] - 20

that, subject to availability, up to $50 million of the Lease 

Fund royalties shall be appropriated to [the] DCNR, violate 

Article I, § 27;

(2) Whether the General Assembly’s transfers/appropriations 

from the Lease Fund violate Article I, § 27; and

(3) Who within the Commonwealth has the duty and thus 

bears the responsibility to make determinations with respect 

to the leasing of State lands for oil and natural gas 

extraction.

PEDF, 108 A.3d at 155.

The Commonwealth Court recognized that the Foundation’s challenges to some 

extent overlapped with legislative policy decisions resulting from the need to balance 

the state budget. While observing that the review of legislative appropriation decisions is 

generally outside the authority of the courts, the court opined that the propriety of the 

use of special fund money, such as money from the Lease Fund, is a legal question 

subject to judicial review. It further concluded that “a decision to lease Commonwealth 

property protected by the Constitution and held in trust for the benefit of all current and 

future Pennsylvanians is an appropriate subject of judicial scrutiny.” Id.

Initially, the Commonwealth Court recognized that this Court recently addressed 

Section 27 in Robinson Township. The court properly observed that Robinson 

Township was a plurality decision in which former-Chief Justice Castille, joined by 

Justice Todd and former-Justice McCaffery, wrote expansively on Section 27. Justice 

Baer concurred on a wholly different ground, while Chief Justice Saylor and formerJustice Eakin wrote in dissent. The Commonwealth Court noted that none of the 

responsive opinions adopted the plurality’s view of Section 27. Thus, the 

Commonwealth Court found “the plurality’s construction of Section 27 persuasive only 
[J-35-2016] - 21

to the extent it is consistent with binding precedent from [the Commonwealth Court] and 

the Supreme Court on the same subject.” PEDF, 108 A.3d at 156 n.37.

The Commonwealth Court, therefore, determined that its prior decision in Payne 

v. Kassab, 312 A.2d 86 (Pa. Commw. 1973) (Payne I), controlled the questions 

presented in the case at bar, even though the plurality in Robinson Township criticized 

the test announced in Payne I as “lack[ing] foundation” in Section 27. PEDF, 108 A.3d 

at 159 (citing Robinson Twp., 83 A.3d 966-67). The Commonwealth Court in Payne I

set forth a three-part test to determine whether a use of Commonwealth land violated 

Section 27:

(1) Was there compliance with all applicable statutes and 

regulations relevant to the protection of the Commonwealth’s 

public natural resources?

(2) Does the record demonstrate a reasonable effort to 

reduce the environmental incursion to a minimum?

(3) Does the environmental harm which will result from the 

challenged decision or action so clearly outweigh the 

benefits to be derived therefrom that to proceed further 

would be an abuse of discretion?

Id. at 158 (quoting Payne I, 312 A.2d at 94).

Notably, this Court affirmed the judgment in Payne I without adopting the threepart test, instead concluding that the “elaborate safeguards” of the challenged statute 

provided adequate protection such that breach of the trust created by Section 27 would 

not occur. Payne v. Kassab, 361 A.2d 263, 273 (Pa. 1976) (Payne II). 

A. Constitutionality of Sections 1602–E and 1603–E of the Fiscal Code 

under Article I, Section 27

The Commonwealth Court first addressed the Foundation’s challenge that 

Sections 1602-E and 1603-E of the 2009 Fiscal Code Amendments violated Section 27. 
[J-35-2016] - 22

As noted, these provisions altered the status quo which had previously appropriated to 

the DCNR all monies in the Lease Fund under the Lease Fund Act, 71 P.S. § 1333. 

The change, the Foundation argued, violated Section 27 because it (1) took away 

DCNR’s ability to use the revenues to mitigate the damage from oil and gas exploration, 

(2) removed DCNR’s ability to act as trustee because the funds were placed in the 

General Fund, potentially for non-conservation purposes, and (3) eliminated revenues 

that would otherwise have built the corpus of the Lease Fund to protect Pennsylvania’s 

natural resources. PEDF, 108 A.3d at 160.

Looking first to the plain language of Section 1602-E, the Commonwealth Court 

observed that the section merely transferred control over the royalties (but not the rents) 

from oil and gas leases from the DCNR to the General Assembly, which, as part of the 

Commonwealth, was also bound to safeguard the Commonwealth’s natural resources 

under Article I, Section 27. Additionally, the court recognized that Section 1602-E did 

not change the DCNR’s decision making authority regarding the granting of leases. The 

court held that the provision “does not by itself infringe upon the rights afforded the 

people” and does not “reflect a failure by the General Assembly to act consistent with its 

trustee obligations under Article I, Section 27.” Id. at 161. It further highlighted that the 

Lease Fund is not a constitutional creation but rather is a special fund created by 

legislative enactment, which could be altered by subsequent legislative action. Id. at 

160. Accordingly, the court concluded that the Foundation failed to demonstrate that 

Section 1602-E “clearly, plainly, and palpably” violated Section 27. Id. at 161.

Turning to Section 1603-E of the 2009 Fiscal Code Amendments, which 

transferred up to $50 million of royalties annually from the Lease Fund to the DCNR, the 
[J-35-2016] - 23

Commonwealth Court acknowledged the Foundation’s argument that the transfer of the 

$50 million acted to limit the funding of the DCNR, as it had previously received all 

royalties from the Lease Fund. The court redefined this challenge as a claim that the 

transfer did not provide adequate funding for DCNR to protect the Commonwealth’s 

natural resources, as opposed to addressing the Foundation’s broader argument that 

the Commonwealth, specifically Governor Rendell, failed to abide by his various duties 

as trustee by limiting the funding of the DCNR. Id.

The Commonwealth Court reviewed case law addressing constitutional 

challenges based on inadequate funding of a part of government. PEDF, 108 A.3d at 

161-66. The Commonwealth Court observed that while this Court has been willing to 

act to protect the “independence of the judicial branch,” the Commonwealth Court has 

not been willing to intervene in regard to the Legislature’s authority to determine the 

funding of Commonwealth agencies. Id. at 161-64 (citing, inter alia, County of 

Allegheny v. Commonwealth, 534 A.2d 760 (Pa. 1987) (holding legislative acts requiring 

counties to fund the local court system to be unconstitutional) and Commonwealth ex 

rel. Carroll v. Tate, 274 A.2d 193 (Pa. 1971) (addressing court funding in Philadelphia)), 

164-66 (citing, inter alia, Mental Health Association in Pennsylvania v. Corbett, 54 A.3d 

100 (Pa. Cmwlth. 2012) (dismissing challenge based on inadequacy of funding for 

Department of Public Welfare’s mental health and intellectual disability services)).

Reiterating its reluctance to “second guess” the amounts appropriated by the 

General Assembly to Commonwealth agencies, the Commonwealth Court applied what 

it viewed as this Court’s requirement that a challenger demonstrate that “the amount 

funded is so inadequate that it impairs the proper functioning” of the DCNR. Id. at 166. 
[J-35-2016] - 24

It concluded that the Foundation “presented no evidence that the current funding 

appropriated to the DCNR from all sources is inadequate – i.e., that the funding is so 

deficient that the DCNR cannot conserve and maintain our State natural resources.” Id. 

Accordingly, the court granted the Commonwealth’s motion for summary relief, 

concluding that the Foundation failed to demonstrate that Sections 1602-E and 1603-E 

violate the Constitution.

B. Constitutionality of Section 1604-E, Section 1605-E, and other 

transfers of money from the Lease Fund

In regard to Sections 1604-E and 1605-E and the other budgetary transfers, see 

supra at 12-15, the Foundation argued that the money generated by oil and gas 

exploration “must be committed to furthering the purposes, rights, and protections 

afforded” under Section 27, rather than being intermingled with the General Fund. Id. at 

167. Considering the constitutional language, the Commonwealth Court held that 

Section 27 “does not expressly command that all revenues derived from the sale or 

leasing of the Commonwealth’s natural resources must be funneled to those purposes 

and those purposes only.” Id. at 168.

The court reiterated that the Lease Fund was merely a statutory special fund, 

rather than a trust fund, and opined that there was “no constitutional mandate that 

monies derived from the leasing of State lands for oil and natural gas development be 

reinvested into the conservation and maintenance of the Commonwealth’s public 

natural resources.” Id. at 169. Accordingly, the Commonwealth Court again held that 

the Foundation failed to demonstrate that the Fiscal Code Amendments, General 

Appropriations Act transfers, and Act 13 transfers from the Lease Fund to the General 

Fund violate the Environmental Rights Amendment, because funds appeared to be 
[J-35-2016] - 25

used for the general “benefit of all the people.” Id. The court, therefore, denied 

summary relief to the Foundation, granting in substantial part the Commonwealth’s 

cross-motion for summary relief.18

IV. Analysis

The Foundation filed a direct appeal as of right from the final order of the 

Commonwealth Court, pursuant to 42 Pa.C.S. § 723(a), raising ten issues. We 

entertained oral argument to examine the following two overarching issues:

1. The proper standards for judicial review of government 

actions and legislation challenged under the Environmental 

Rights Amendment, Article I, Section 27 of the Pennsylvania 

Constitution, in light of Robinson Township v. 

Commonwealth, 83 A.3d 901 (Pa. 2013) (plurality);

 

18

 Sections 1602-E and 1603-E affect the appropriation of royalties to the DCNR, 

initially re-appropriating all such payments to the General Assembly, before authorizing 

a transfer of some royalty money back to the DCNR. The Commonwealth Court 

indicated that Sections 1604-E and 1605-E resulted in the transfer of “bonus payment 

revenue” (an elevated “first annual rental payment”) from the Lease Fund to the General 

Fund, after forcing DCNR to generate the same through additional leasing. See PEDF, 

108 A.3d at 146-48; accord Foundation’s Brief at 76. According to the Foundation, the 

General Appropriation Act of 2009 also resulted in the transfer of bonus bid payments to 

the General Fund. See Foundation’s Brief at 76. 

The Commonwealth Court additionally considered, in regard to the Commonwealth’s 

cross-motion for summary relief, whether the Governor or only the DCNR has authority 

to enter natural gas leases. The court noted that the CNRA provides the DCNR with 

exclusive authority “to make and execute contracts or leases in the name of the 

Commonwealth for the extraction of oil and natural gas on State lands and to determine 

whether doing so is in the best interest of the Commonwealth.” Id. at 171 (citing 71 P.S. 

§ 1340.302(a)(6)). It, therefore, denied the Commonwealth relief on this point, 

concluding that the ultimate decision lay with the DCNR, although recognizing that the 

General Assembly and the Governor could attempt to influence it. Id. at 172. Judge 

Cohn Jubelirer joined the majority opinion with the exception of the section addressing 

whether the Governor or the DCNR had decision-making authority in regard to future 

leases, which she deemed advisory, because no future leasing decisions had as of then 

been made.
[J-35-2016] - 26

2. Constitutionality under Article I, [Section] 27 of Section 

1602-E and 1603-E of the Fiscal Code and the General 

Assembly’s transfers/appropriations from the Lease Fund.

Given that we are reviewing the Commonwealth Court’s decision on crossmotions for summary relief pursuant to Pa.R.A.P. 1532(b),19 we may grant relief only if 

no material questions of fact exist and the right to relief is clear. See Jubelirer, 953 A.2d 

at 521. Additionally, as challenges to the constitutionality of statutes present pure 

questions of law, our standard of review is de novo, and our scope of review is plenary. 

See Robinson Twp., 83 A.3d at 943. As with any constitutional challenge to legislation, 

the challenger bears the heavy burden of demonstrating that the statute “clearly, plainly, 

and palpably violates the Constitution,” as we presume that our sister branches act in 

conformity with the Constitution. Stilp v. Commonwealth, 905 A.2d 918, 939 (Pa. 2006). 

In interpreting constitutional language, “the fundamental rule of construction which 

guides [this Court] is that the Constitution’s language controls and must be interpreted 

in its popular sense, as understood by the people when they voted on its adoption.”

Ieropoli v. AC&S Corp., 842 A.2d 919, 925 (Pa. 2004). As with our interpretation of 

statutes, if the language of a constitutional provision is unclear, we may be informed by 

“the occasion and necessity for the provision; the circumstances under which the 

amendment was ratified; the mischief to be remedied; the object to be attained; and the 

contemporaneous legislative history.” Robinson Twp., 83 A.3d at 945 (citing 1 Pa.C.S. 

§§ 1921, 1922).

 

19

 Rule 1532(b), entitled “Summary relief,” provides as follows: “At any time after the 

filing of a petition for review in an appellate or original jurisdiction matter the court may 

on application enter judgment if the right of the applicant thereto is clear.” Pa.R.A.P. 

1532(b).
[J-35-2016] - 27

A. Proper Standard of Judicial Review

The parties, various amici, and the plurality in Robinson Township all reject the 

three-part test developed by the Commonwealth Court in Payne I as the appropriate 

standard for examining Section 27 challenges. The Commonwealth observes that the 

Payne I test has been criticized as “ill-fitted” to the language of Section 27 and as 

frustrating the development of a “coherent environmental rights jurisprudence.” 

Commonwealth’s Brief at 25 (citing Robinson Township, 83 A.3d at 964). Similarly, the 

Foundation urges “the issues in this case do not fit the mold of the Payne test crafted by 

the Commonwealth Court.” Foundation’s Reply Brief at 5 (discussing the Robinson 

Township plurality’s three part criticism of the Payne test).20

We agree. The Payne I test, which is unrelated to the text of Section 27 and the 

trust principles animating it, strips the constitutional provision of its meaning. See

Robinson Twp., 83 A.3d at 967; see also Dernbach, The Potential Meanings of a

Constitutional Public Trust, 45 Envtl. L. 463, 499 (2015). Accordingly, we reject the test 

 

20 In Robinson Township, the plurality explained the significant drawbacks of the 

Commonwealth Court’s Payne test:

[T]he test poses difficulties both obvious and critical. First, 

the Payne test describes the Commonwealth's obligations—

both as trustee and under the first clause of Section 27—in 

much narrower terms than the constitutional provision. 

Second, the test assumes that the availability of judicial relief 

premised upon Section 27 is contingent upon and 

constrained by legislative action. And, finally, the 

Commonwealth Court's Payne decision and its progeny have 

the effect of minimizing the constitutional duties of executive 

agencies and the judicial branch, and circumscribing the 

abilities of these entities to carry out their constitutional 

duties independent of legislative control.

Robinson Twp., 83 A.3d at 967.
[J-35-2016] - 28

developed by the Commonwealth Court as the appropriate standard for deciding Article 

I, Section 27 challenges. 

Instead, when reviewing challenges to the constitutionality of Commonwealth 

actions under Section 27, the proper standard of judicial review lies in the text of Article 

I, Section 27 itself as well as the underlying principles of Pennsylvania trust law in effect 

at the time of its enactment. We must therefore carefully examine the contours of the 

Environmental Rights Amendment to identify the rights of the people and the obligations 

of the Commonwealth guaranteed thereunder.

B. The Contours of Section 27

This is not the first time we have been called upon to address the rights and 

obligations set forth in the Environmental Rights Amendment. We did so in Robinson 

Twp., and we rely here upon the statement of basic principles thoughtfully developed in 

that plurality opinion.21 To start, the General Assembly derives its power from Article III

of the Pennsylvania Constitution which grants broad and flexible police powers to enact 

laws for the purposes of promoting public health, safety, morals, and the general 

welfare. Id. at 946. These powers, however, are expressly limited by fundamental 

rights reserved to the people in Article I of our Constitution. Id. at 946. Specifically, 

Section 1 affirms, among other things, that all citizens “have certain inherent and 

indefeasible rights.” Id. at 948 (quoting Pa. Const. art. I, § 1). As forcefully pronounced

 

21 In Robinson Township, this Court considered the constitutionality of portions of Act 

13 of 2012, which amended the Pennsylvania Lease Fund Act with substantial benefits 

to the natural gas industry in response to the Marcellus Shale boom. Notably, some of 

the Foundation’s challenges in the case at bar were triggered by separate provisions of 

Act 13, specifically those provisions that created the Marcellus Legacy Fund. See 58 

Pa.C.S. §§ 2315(a.1), 2505.
[J-35-2016] - 29

in Section 25, the rights contained in Article I are “excepted out of the general powers of 

government and shall forever remain inviolate.” Id. (quoting Pa. Const. art. I, § 25). 

Among the “inherent and indefeasible” rights in Article I of the Pennsylvania 

Constitution are the rights set forth in the Environmental Rights Amendment, which we 

quote again for ease of discussion:

The people have a right to clean air, pure water, and to the 

preservation of the natural, scenic, historic and esthetic 

values of the environment. Pennsylvania's public natural 

resources are the common property of all the people, 

including generations yet to come. As trustee of these 

resources, the Commonwealth shall conserve and maintain 

them for the benefit of all the people.

Pa. Const. art. I, § 27. This constitutional provision grants two separate rights to the 

people of this Commonwealth. The first right is contained in the first sentence, which is 

a prohibitory clause declaring the right of citizens to clean air and pure water, and to the 

preservation of natural, scenic, historic and esthetic values of the environment. 

Robinson Twp., 83 A.3d at 951. This clause places a limitation on the state's power to 

act contrary to this right, and while the subject of this right may be amenable to 

regulation, any laws that unreasonably impair the right are unconstitutional. Id.

The second right reserved by Section 27, set forth in its second sentence, is the 

common ownership by the people, including future generations, of Pennsylvania's public 

natural resources. Id. at 954. The “public natural resources” referenced in this second 

sentence include the state forest and park lands leased for oil and gas exploration and, 

of particular relevance in this case, the oil and gas themselves. Id. at 955; see also Pa. 

L. Journal, 154th General Assembly, No. 118, Reg. Sess., 2271–75 (1970). In a 

statement offered to the General Assembly in connection with the proposed 
[J-35-2016] - 30

Environmental Rights Amendment, Professor Robert Broughton explained that the 

provision was initially drafted as “Pennsylvania’s natural resources, including the air, 

waters, fish, wildlife, and the public lands and property of the Commonwealth ....” but 

was revised to remove the enumerated list and thereby discourage courts from limiting 

the scope of natural resources covered. Pa. L. Journal, 154th General Assembly, No. 

118, Reg. Sess., 2274 (1970) (Broughton Analysis).

22

The third clause of Section 27 establishes a public trust, pursuant to which the 

natural resources are the corpus of the trust, the Commonwealth23 is the trustee, and 

the people are the named beneficiaries. Robinson Twp., 83 A.3d at 955-56. The terms 

“trust” and “trustee” carry their legal implications under Pennsylvania law at the time the 

amendment was adopted. See Appeal of Ryder, 74 A.2d 123, 124 (Pa. 1950)

(providing that “words having a precise and well-settled legal meaning must be 

 

22 The sentence was also amended to include the term “public” to indicate that it did not 

apply to purely private property rights. However, Representative Kury opined that the 

trust nevertheless applied to “resources owned by the Commonwealth and also to those 

resources not owned by the Commonwealth, which involve a public interest.” Pa. L. 

Journal, 154th General Assembly, No. 118, Reg. Sess., 2271-72 (1970) (statement by 

Rep. Kury).

23 Trustee obligations are not vested exclusively in any single branch of Pennsylvania’s 

government, and instead all agencies and entities of the Commonwealth government, 

both statewide and local, have a fiduciary duty to act toward the corpus with prudence, 

loyalty, and impartiality. See Robinson Twp., 83 A.3d at 956-57; see also Pa. L. 

Journal, 154th General Assembly, No. 118, Reg. Sess., 2269, 2271 (1970).

Importantly, in addition to its trustee obligations, the DCNR also has a statutory 

responsibility “to maintain, improve and preserve State parks, to manage State forest 

lands to assure their long-term health, sustainability and economic use.” See 71 P.S. 

§ 1340.101. To pursue this mission, the DCNR is empowered with exclusive authority

“to make and execute contracts or leases in the name of the Commonwealth for the 

mining or removal of any valuable minerals that may be found in State forests” when, 

and only when, the DCNR determines that doing so is in the best interests of the 

Commonwealth. 71 P.S. § 1340.302(a)(6). 
[J-35-2016] - 31

interpreted” accordingly); see also Robinson Twp., 83 A.3d at 956 (citing Pa.C.S. § 

1903). Notably, Professor Broughton explained that the Commonwealth’s role was 

plainly intended to be that of a “trustee,” as opposed to “proprietor.” See Pa. L. Journal, 

154th General Assembly, No. 118, Reg. Sess., 2269, 2273 (1970) (Broughton 

Analysis). As a trustee, the Commonwealth must deal “with its citizens as a fiduciary, 

measuring its successes by the benefits it bestows upon all its citizens in their utilization 

of natural resources under law.” Id. Under Section 27, the Commonwealth may not act 

as a mere proprietor, pursuant to which it “deals at arms['] length with its citizens, 

measuring its gains by the balance sheet profits and appreciation it realizes from its 

resources operations.” Id. 

The Robinson Township plurality aptly described the Commonwealth’s duties as 

the trustee of the environmental trust created by the people of Pennsylvania as follows:

As trustee, the Commonwealth is a fiduciary obligated to 

comply with the terms of the trust and with standards 

governing a fiduciary's conduct. The explicit terms of the 

trust require the government to “conserve and maintain” the 

corpus of the trust. See Pa. Const. art. I, § 27. The plain 

meaning of the terms conserve and maintain implicates a 

duty to prevent and remedy the degradation, diminution, or 

depletion of our public natural resources. As a fiduciary, the 

Commonwealth has a duty to act toward the corpus of the 

trust—the public natural resources—with prudence, loyalty, 

and impartiality.

Robinson Twp., 83 A.3d at 956-57. 

Under Pennsylvania trust law, the duty of prudence requires a trustee to 

“exercise such care and skill as a man of ordinary prudence would exercise in dealing 

with his own property.” In re Mendenhall, 398 A.2d 951, 953 (Pa. 1979) (quoting 
[J-35-2016] - 32

Restatement (Second) of Trusts § 174).

24 The duty of loyalty imposes an obligation to 

manage the corpus of the trust so as to accomplish the trust’s purposes for the benefit 

of the trust’s beneficiaries. See Metzger v. Lehigh Valley Trust & Safe Deposit Co., 69 

A. 1037, 1038 (Pa. 1908); see also In re Hartje's Estate, 28 A.2d 908, 910 (Pa. 1942)

(citing Restatement (Second) of Trusts § 186 for the proposition that “the trustee can 

properly exercise such powers and only such powers as (a) are conferred upon him in 

specific words by the terms of the trust, or (b) are necessary or appropriate to carry out 

the purposes of the trust and are not forbidden by the terms of the trust”). The duty of 

impartiality requires the trustee to manage the trust so as to give all of the beneficiaries 

due regard for their respective interests in light of the purposes of the trust. 20 Pa.C.S. 

§ 7773; Estate of Sewell, 409 A.2d 401, 402 (Pa. 1979) (citing Restatement (Second) of 

Trusts § 183).25 

Pennsylvania’s environmental trust thus imposes two basic duties on the 

Commonwealth as the trustee. First, the Commonwealth has a duty to prohibit the 

degradation, diminution, and depletion of our public natural resources, whether these 

harms might result from direct state action or from the actions of private parties. 

Robinson Twp., 83 A.3d at 957. Second, the Commonwealth must act affirmatively via 

 

24 The Uniform Trust Act confirms that the duty to administer with prudence involves 

“considering the purposes, provisions, distributional requirements and other 

circumstances of the trust and ... exercising reasonable care, skill and caution.” 

20 Pa.C.S. § 7774. In furtherance of this duty, the trustee “shall keep adequate records 

of the administration of the trust” and “shall keep trust property separate from the 

trustee's own property.” 20 Pa.C.S. § 7780.

25 Justice Baer’s contention that our holding today “cordons off” hundreds of millions of 

dollars from other budgetary uses is inaccurate. See Concurring and Dissenting 

Opinion at 3. In so contending, Justice Baer addresses a question never raised by the 

parties and thus not presently before us.
[J-35-2016] - 33

legislative action to protect the environment. Id. at 958 (citing Geer v. Connecticut, 

161 U.S. 519, 534 (1896) (trusteeship for the benefit of state's people implies legislative 

duty “to enact such laws as will best preserve the subject of the trust, and secure its 

beneficial use in the future to the people of the state”)). Although a trustee is 

empowered to exercise discretion with respect to the proper treatment of the corpus of 

the trust, that discretion is limited by the purpose of the trust and the trustee's fiduciary 

duties, and does not equate “to mere subjective judgment.” Id. at 978 (citing Struthers 

Coal & Coke Co. v. Union Trust Co., 75 A. 986, 988 (Pa. 1910); In re Sparks' Estate, 

196 A. 48, 57 (Pa. Super. 1938)). The trustee may use the assets of the trust “only for 

purposes authorized by the trust or necessary for the preservation of the trust; other 

uses are beyond the scope of the discretion conferred, even where the trustee claims to 

be acting solely to advance other discrete interests of the beneficiaries.” Id. (citing 

Metzger, 69 A. at 1038); see also Hartje's Estate, 28 A.2d at 910 (“giving of [an] 

unrestricted bond” was “neither ‘necessary’ nor ‘appropriate’ to the carrying out of the 

purposes of the trust; hence, the existence of [trustee’s] power to do so by inference 

must be denied”).

The Commonwealth argues that the revenue obtained from the disposition of 

trust assets need not be returned to the corpus of the trust or otherwise dedicated to 

trust purposes, for two reasons. First, the Commonwealth contends that the 

Environmental Rights Amendment is “silent” as to the use of proceeds from the sale of 

natural resources, and “addresses neither the appropriations process nor funding for 

conservation purposes.” See Commonwealth’s Brief at 39. This is plainly inaccurate, 

as Section 27 expressly creates a trust, and pursuant to Pennsylvania law in effect at 
[J-35-2016] - 34

the time of enactment, proceeds from the sale of trust assets are part of the corpus of 

the trust. See, e.g., McKeown’s Estate, 106 A. 189, 190 (Pa. 1919) (“Being a sale of 

assets in the corpus of the trust, presumptively all the proceeds are principal... .”). The 

unavoidable result is that proceeds from the sale of oil and gas from Section 27’s public 

trust remain in the corpus of the trust.26

 

26 The Commonwealth Court posited that “where the drafters of the Pennsylvania 

Constitution intended to dedicate a tranche of money to a particular purpose, they did 

so expressly,” as in Article VIII, § 11(a) (relating to Motor Licensing Fund) (MVL Fund) 

and Article VIII, § 16 (relating to Land and Water Conservation and Reclamation Fund) 

(LWCR Fund). PEDF, 108 A.3d at 168 n.46. The Commonwealth urges us to adopt 

this reasoning, see Commonwealth’s Brief at 40, but we are unpersuaded. As 

described herein, the creation of a trust in the Environmental Rights Amendment 

obviates the need for additional language indicating that funds should be dedicated for a 

specific purpose. Section 27 itself establishes that the purpose of the trust is to 

“conserve and maintain” the public natural resources and basic trust principles require 

that the proceeds from their sale remain part of the corpus. By contrast, the MVL Fund 

and the LWCR Fund provisions do not contain trust language. 

The Commonwealth additionally urges us to adopt a line of reasoning it claims is 

consistent not with the treatment of trust proceeds under Pennsylvania trust law but, 

instead, with the “public trust doctrine.” Id. at 43-45 (discussing the seminal public trust 

doctrine case, Illinois Central Railroad Co. v. Illinois, 146 U.S. 387 (1892), wherein the 

United States Supreme Court held that Illinois could not divest itself of certain land and 

water because doing so would deprive the public of its right to the use and enjoyment 

thereof). The Commonwealth’s argument is unavailing.

As an initial matter, Illinois Central Railroad has nothing to do with the proper treatment 

of proceeds from the sale of trust assets. More to the point, while we appreciate that 

Section 27 establishes a public trust, we also recognize that the “public trust doctrine”

does not set forth universally applicable black letter law and that Pennsylvania has no 

established public trust principles applicable to Section 27. Scholars of public trust law, 

including Professor Joseph L. Sax – whose article, The Public Trust Doctrine in Natural 

Resource Law: Effective Judicial Intervention, 68 Mich. L. Rev. 471 (1970), is discussed 

in the legislative history for Section 27 – acknowledge that the “amorphous” public trust 

concept merely provides a potential tool through which citizens may attempt to develop 

a comprehensive approach to natural resource management. Id. at 474, 546 

(presenting a compendium of public trust cases from around the country reflecting legal 

theories “as diverse as lawyers’ imaginations are fertile”); see also Commonwealth’s 

Brief at 44 n.22 (citing William H. Rodgers Jr., Handbook on Environmental Law, § 2.16 

(continued...)
[J-35-2016] - 35

Second, the Commonwealth insists that the concluding phrase of Section 27, “for 

the benefit of all the people,” confers discretion upon the General Assembly to direct the 

proceeds from oil and gas development toward any uses that benefit all the people of 

the Commonwealth, even if those uses do nothing to “conserve and maintain” our public 

natural resources. Commonwealth’s Brief at 41 (citing PEDF, 108 A.3d at 168). We are 

wholly unconvinced. The phrase “for the benefit of all of the people” may not be read in 

isolation and does not confer upon the Commonwealth a right to spend proceeds on 

general budgetary items. Pa. Const. art I, § 27. The Commonwealth’s fiduciary duty to 

“conserve and maintain” our public natural resources is a duty owed to the beneficiaries 

of the public trust, namely “the people, including generations yet to come,” as set forth 

in the second sentence of Section 27. Id. The “people,” in turn, are those endowed 

with “a right to clean air, pure water, and to the preservation of the natural, scenic, 

historic and esthetic values of the environment,” as set forth in the first sentence of 

Section 27. Id. 

Accordingly, the Environmental Rights Amendment mandates that the 

Commonwealth, as a trustee, “conserve and maintain” our public natural resources in 

furtherance of the people’s specifically enumerated rights. Thus understood in context 

of the entire amendment, the phrase “for the benefit of all the people” is unambiguous 

 

(...continued)

(West Pub. Co. 1977), for the proposition that “[a]ny attempt at a shorthand statement of 

the principles of public trust doctrine must come with a disclaimer: the constitutional and 

legislative variations among the states approach the infinite...”). 

At most, the public trust doctrine provides a framework for states to draft their own 

public trust provisions, which (like many trust instruments) will ultimately be interpreted 

by the state courts. In Pennsylvania, established private trust principles provide this 

Court with the necessary tools to properly interpret the trust created by Section 27.
[J-35-2016] - 36

and clearly indicates that assets of the trust are to be used for conservation and 

maintenance purposes. See Robinson Twp., 83 A.3d at 957 (holding that the “explicit 

terms of the trust require the government to ‘conserve and maintain’ the corpus of the 

trust”). Only within those parameters, clearly set forth in the text of Section 27, does the 

General Assembly, or any other Commonwealth entity, have discretion to determine the 

public benefit to which trust proceeds – generated from the sale of trust assets – are 

directed. 

By arguing that proceeds obtained from the sale of our natural resources are not 

part of the corpus of the trust, the Commonwealth improperly conceives of itself as a 

mere proprietor of those public natural resources, rather than as a trustee. In the 

Commonwealth’s view, it may dispose of our public natural resources as it so chooses 

and for any purpose it so conceives, so long as such disposition broadly benefits the 

public (apparently without regard to “generations yet to come”). See Commonwealth’s 

Brief at 45. As such, it urges us to substantially diminish its fiduciary obligation to 

prevent and remedy the degradation of our natural resources. We decline to do so.

The Foundation contends that all revenues generated by oil and gas leases 

remain in the corpus of the trust. We are without sufficient advocacy to rule on the 

correctness of this proposition. We note again that Pennsylvania trust law dictates that 

proceeds from the sale of trust assets are trust principal and remain part of the corpus 

of the trust. McKeown’s Estate, 106 A. at 190. When a trust asset is removed from the 

trust, all revenue received in exchange for the trust asset is returned to the trust as part 

of its corpus. See Bolton v. Stillwagon, 190 A.2d 105, 109 (Pa. 1963) (explaining that 

when “the relation of trustee and [beneficiary] has once been established as to certain 
[J-35-2016] - 37

property in the hands of the trustee, no mere change of trust property from one form to 

another will destroy the relation”). As a result, royalties – monthly payments based on 

the gross production of oil and gas at each well – are unequivocally proceeds from the 

sale of oil and gas resources. See Petitioner’s Brief for Summary Judgment, Pet. Ex. X. 

They are part of the corpus of the trust and the Commonwealth must manage them 

pursuant to its duties as trustee. 

Conversely, it is less clear how to categorize other revenue streams. See

generally In re Rosenblum’s Estate, 328 A.2d 158, 163 (Pa. 1974) (in a case not 

involving oil and gas leases, holding that rents from realty held by a trust have 

traditionally been treated as income (and payable directly to the trust’s beneficiaries) 

rather than principal).

27 See also In re McKeown’s Estate, 106 A. at 190; Restatement 

(Second) of Trusts § 233; 20 Pa.C.S. § 8145. For example, the record on appeal is 

undeveloped regarding the purpose of up-front bonus bid payments, and thus no factual 

basis exists on which to determine how to categorize this revenue. While we recognize 

that the leases designate these payments, among others, as “rental payments,” such a

classification does not shed any light on the true purpose of the payment, e.g., rental of 

a leasehold interest in the land, payment for the natural gas extracted, or some other 

purpose. In construing Sections 1604-E and 1605-E, to the extent that the lease 

agreements reflect the generation of revenue streams for amounts other than for the 

purchase of the oil and gas extracted, it is up to the Commonwealth Court, in the first 

 

27

 Unlike a sale or other disposition that deprives the trust of any further benefit from 

the trust asset, at the end of a rental period, the trust retains the trust asset in its entirety 

in its corpus.
[J-35-2016] - 38

instance and in strict accordance and fidelity to Pennsylvania trust principles, to 

determine whether these funds belong in the corpus of the Section 27 trust.

In this regard, it must be remembered that the Commonwealth, as trustee, has a 

constitutional obligation to negotiate and structure leases in a manner consistent with its 

Article 1, Section 27 duties. Oil and gas leases may not be drafted in ways that remove 

assets from the corpus of the trust or otherwise deprive the trust beneficiaries (the 

people, including future generations) of the funds necessary to conserve and maintain 

the public natural resources. 

On remand, the parties should be given the opportunity to develop arguments 

concerning the proper classification, pursuant to trust law, of any payments called

“rental payments” under the lease terms. To the extent such payments are 

consideration for the oil and gas that is extracted, they are proceeds from the sale of 

trust principal and remain in the corpus. These proceeds remain in the trust and must 

be devoted to the conservation and maintenance of our public natural resources, 

consistent with the plain language of Section 27. 

C. Need for Implementing Legislation

The Foundation contends that Section 27 is self-executing, based in part on the 

plurality opinion in Robinson Township. Foundation’s Brief at 49-50. While the 

Commonwealth does not take a position on this issue, the Republican Caucus, as 

amicus, argues that Section 27 is not self-executing. Republican Caucus’ Brief at 48-

60. It analyzes decisions from others states regarding their environmental rights 

amendments and observes that, while a few states have specific language dictating that 
[J-35-2016] - 39

the amendment is self-executing, no state has read the language of the amendment as 

self-executing when the language does not explicitly so provide. Id. at 56-60.

The plurality in Robinson Township recognized that our prior case law has not 

resolved the issue of whether Section 27 is self-executing or whether it requires 

implementing legislation to be effective, at least in regard to an attempt to enforce the 

people’s rights against owners of private property.28 Robinson Township, 83 A.3d at 

964-65; see also Dernbach, The Potential Meanings of a Constitutional Public Trust, 45 

Envtl. L. at 474-75.

Although refusing to speak to whether the right was self-executing for purposes 

of enforcement against private property, this Court in Payne II, nevertheless concluded 

that the trust provisions in the second and third sentences of Section 27 do not require 

legislative action in order to be enforced against the Commonwealth in regard to public 

property. In Payne II, we stated:

There can be no question that the Amendment itself 

declares and creates a public trust of public natural 

 

28

 This question, regarding whether Section 27 was self-executing in regard to private 

property, divided the Court in Commonwealth v. National Gettysburg Battlefield, 311 

A.2d 588 (Pa. 1973), where the Commonwealth attempted to enjoin the owners of 

property adjoining the Gettysburg battlefield from constructing an observation tower 

claiming that the tower would violate the people’s right to the historic and aesthetic 

values of the site. In a plurality opinion, two justices concluded that the Section 27 claim 

should be dismissed because the provision required legislative action to be effective, id.

at 595; one justice concurred with the dismissal without opinion, id.; two justices found 

that the Commonwealth’s claim failed on the merits, while acknowledging the 

Commonwealth’s ability to act as trustee (presumably without further legislative action), 

id. at 595-96; and two justices would have granted the injunction based on Section 27, 

specifically finding the provision to be self-executing, id. at 597. As noted in Robinson 

Township, this Court previously misstated that a plurality of the justices in Gettysburg 

concluded that the Section 27 was not self-executing in United Artists Theater Circuit, 

Inc. v. City of Philadelphia, 635 A.2d 612, 620 (Pa. 1993), when in fact only two justices 

specifically found it to require legislative action. Robinson Twp., 83 A.3d at 940.
[J-35-2016] - 40

resources for the benefit of all the people (including future 

generations as yet unborn) and that the Commonwealth is 

made the trustee of said resources, commanded to conserve 

and maintain them. No implementing legislation is needed to 

enunciate these broad purposes and establish these 

relationships; the [A]mendment does so by its own ipse dixit. 

Payne II, 361 A.2d at 272. 

Former Chief Justice Castille echoed this concept in the Robinson Township

plurality, concluding that the Commonwealth’s obligations as trustee “create a right in 

the people to seek to enforce the obligations.” Robinson Township, 83 A.3d at 974.29 

Accordingly, we re-affirm our prior pronouncements that the public trust provisions of 

Section 27 are self-executing.

D. Foundation’s Challenges

In the Commonwealth Court, the Foundation sought declarations that the 

Commonwealth has certain duties as constitutional trustee and that various acts or 

decisions by the Governor and General Assembly violated those constitutional duties. 

As noted, the challenged acts and decisions primarily relate to the propriety of the 

Commonwealth’s use of revenue generated from oil and gas leases for purposes not 

authorized by Section 27. Also implicated is the propriety of the Commonwealth’s 

decision-making process with respect to leasing state land. See Foundation’s Reply 

Brief at 13 (arguing that leasing and selling the state park and forest land, and the oil 

and gas thereon for the purpose of generating revenue for the General Fund is improper 

because balancing the budget “is not one of the purposes of the trust”). Having 

 

29

 We additionally find support in Section 27’s legislative history, in which Professor 

Broughton opined that the Amendment “would immediately create rights to prevent the 

government (state, local, or an authority) from taking positive action which unduly harms 

environmental quality.” Legislative Journal–House at 2281 (Broughton Analysis).
[J-35-2016] - 41

determined that proceeds representing payment for extracted oil and gas remain as part 

of the corpus of our environmental public trust, and that royalties are unquestionably 

such proceeds, we are able to make specific rulings with respect to only some of the 

challenged legislation. 

Sections 1602-E and 1603-E relate exclusively to royalties. On their face, these 

amendments lack any indication that the Commonwealth is required to contemplate, let 

alone reasonably exercise, its duties as the trustee of the environmental public trust 

created by the Environmental Rights Amendment. The Commonwealth itself readily 

acknowledges that revenue generated by oil and gas leases is now spent in a multitude 

of ways entirely unrelated to the conservation and maintenance of our public natural 

resources. See Commonwealth’s Brief at 46. Section 1602-E merely requires the 

General Assembly to “consider” allocating these funds to municipalities impacted by a 

Marcellus well. Section 1603-E limits DCNR’s allocation from the Lease Fund to “up to 

$50,000,000” from royalties and requires DCNR to “give preference to the operation and 

maintenance of State parks and forests” rather than to conservation purposes.30 Again, 

however, there is no indication that the General Assembly considered the purposes of 

the public trust or exercised reasonable care in managing the royalties in a manner 

consistent with its Section 27 trustee duties. 

 

30 We reject the Commonwealth Court’s re-framing of the Foundation’s challenge to 

Section 1603-E as a contention that the General Assembly is failing to fund DCNR’s 

mission adequately under Section 27. See PEDF, 108 A.3d at 161. Properly 

understood, the Foundation’s challenge relates to whether Section 1603-E reflects the 

appropriate exercise of the Commonwealth’s fiduciary obligations as the Section 27 

trustee, not whether DCNR’s budget is sufficient. See id. (quoting Foundation’s Brief to 

Commonwealth Court at 93-94); see also Foundation’s Reply Brief at 7.
[J-35-2016] - 42

We hold, therefore, that sections 1602-E and 1603-E, relating to royalties, are 

facially unconstitutional.31 They plainly ignore the Commonwealth’s constitutionally 

imposed fiduciary duty to manage the corpus of the environmental public 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.32 See Robinson Twp., 83 A.3d at 957. Without any question, 

these legislative enactments permit the trustee to use trust assets for non-trust 

purposes, a clear violation of the most basic of a trustee’s fiduciary obligations. Id. at 

978 (“[T]he trustee may use the assets of the trust only for purposes authorized by the 

trust or necessary for the preservation of the trust; other uses are beyond the scope of 

 

31 A statute is facially unconstitutional only where no set of circumstances exist under 

which the statute would be valid. Clifton v. Allegheny Cty., 969 A.2d 1197, 1222 (Pa.

2009) (citing Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442, 449 

(2008)). “In determining whether a law is facially invalid, [a court] must be careful not to 

go beyond the statute's facial requirements and speculate about ‘hypothetical’ or 

‘imaginary’ cases.” United States v. Raines, 362 U.S. 17, 22 (1960) (“The delicate 

power of pronouncing an Act of Congress unconstitutional is not to be exercised with 

reference to hypothetical cases thus imagined.”)). A facial challenge “must fail where 

the statute has a ‘plainly legitimate sweep.’” Clifton, 969 A.2d at 1222 (quoting Grange, 

552 U.S. at 449).

32 The Commonwealth avers that robust lease terms, pre-leasing analysis, and 

monitoring programs to discover the impacts of leasing justify the Commonwealth’s 

appropriation of proceeds for non-trust purposes. See Commonwealth’s Brief at 33-

34. These “justifications” do not answer the question of whether it is proper for the 

Commonwealth to spend proceeds from those leases on anything other than 

“remedy[ing] the degradation, diminution or depletion” of our public natural 

resources. The Foundation, conversely, takes the position that there is a “backlog of 

projects necessary to conserve and maintain our State Forests and Parks that are 

estimated to cost several billion dollars.” Foundation’s Brief at 72. The 

Commonwealth’s generalized assertions and the Foundation’s staggering estimates do 

not provide any basis to determine whether the appropriations to the General Fund 

were made pursuant to the proper exercise of the Commonwealth’s fiduciary duties as 

trustee. Moreover, the Commonwealth’s public natural resources extend beyond the 

geographic boundaries of our state parks and forests.
[J-35-2016] - 43

the discretion conferred, even where the trustee claims to be acting solely to advance 

other discrete interests of the beneficiaries.”); see also 20 Pa.C.S. §7780 (providing that 

the duty to administer a trust with prudence involves “considering the purposes” of the 

trust and “the exercise of reasonable care, skill, and caution”). To the extent the

remainder of the Fiscal Code amendments transfer proceeds from the sale of trust 

assets to the General Fund, they are likewise constitutionally infirm.

Based on its conclusion that no revenue from the leasing and sale of trust assets

is part of the corpus of the trust as well as its interpretation of Section 27’s plain 

language, including the Commonwealth’s fiduciary obligations that arise therefrom, the 

Commonwealth Court denied the Foundation’s application for summary relief. It

erroneously concluded that all of the General Assembly’s transfers and appropriations 

from the Lease Fund were wholly proper because they appeared generally to benefit all 

the people of the Commonwealth and “there is no constitutional mandate that monies 

derived from the leasing of State lands for oil and gas development be reinvested into 

the conservation and maintenance of the Commonwealth’s natural resources.” PEDF, 

108 A.3d at 169. 

Having established, to the contrary, that all proceeds from the sale of our public 

natural resources are part of the corpus of our environmental public trust and that the 

Commonwealth must manage the entire corpus according to its fiduciary obligations as 

trustee, the Commonwealth Court’s decision cannot stand. In light of our specific 

holding that sections 1602-E and 1603-E are facially unconstitutional, the pre-2008 

appropriations scheme as set forth in the Lease Fund Act and the CNRA again controls, 

with all monies in the Lease Fund specifically appropriated to the DCNR. As to the 
[J-35-2016] - 44

remaining acts and decisions the Foundation challenges, we clarify that their 

constitutionality depends upon whether they result from the Commonwealth’s faithful 

exercise of its fiduciary duties vis a vis our public natural resources and any proceeds 

derived from the sale thereof. For example, the Governor’s ability to override decisions 

by the DCNR regarding leasing is contingent upon the extent to which he does so in a 

manner that is faithful to his trustee obligations, not his various other obligations. 

We also clarify that the legislature’s diversion of funds from the Lease Fund (and 

from the DCNR’s exclusive control) does not, in and of itself, constitute a violation of 

Section 27. As described herein, the legislature violates Section 27 when it diverts

proceeds from oil and gas development to a non-trust purpose without exercising its 

fiduciary duties as trustee. The DCNR is not the only agency committed to conserving 

and maintaining our public natural resources, and the General Assembly would not run 

afoul of the constitution by appropriating trust funds to some other initiative or agency 

dedicated to effectuating Section 27. By the same token, the Lease Fund is not a 

constitutional trust fund and need not be the exclusive repository for proceeds from oil 

and gas development. However, if proceeds are moved to the General Fund, an 

accounting is likely necessary to ensure that the funds are ultimately used in 

accordance with the trustee’s obligation to conserve and maintain our natural resources. 

The Commonwealth (including the Governor and General Assembly) may not 

approach our public natural resources as a proprietor, and instead must at all times 

fulfill its role as a trustee. Because the legislative enactments at issue here do not 

reflect that the Commonwealth complied with its constitutional duties, the order of the 

Commonwealth Court with respect to the constitutionality of 1602-E and 1603-E is 
[J-35-2016] - 45

reversed, and the order is otherwise vacated in all respects. The case is remanded to 

the Commonwealth Court for further proceedings consistent with this Opinion.

Justices Todd, Dougherty and Wecht join the opinion.

Justice Baer files a concurring and dissenting opinion.

Chief Justice Saylor files a dissenting opinion.

Former Justice Eakin did not participate in the consideration or decision of this 

case.