[J-82-2021]

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

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

PENNSYLVANIA ENVIRONMENTAL 

DEFENSE FOUNDATION,

Appellant

v.

COMMONWEALTH OF PENNSYLVANIA, 

AND TOM WOLF, IN HIS OFFICIAL 

CAPACITY AS GOVERNOR OF 

PENNSYLVANIA,

Appellees

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No. 65 MAP 2020

Appeal from the Order of the 

Commonwealth Court at No. 358 

MD 2018 dated October 22, 2020.

ARGUED: December 8, 2021

OPINION

CHIEF JUSTICE BAER DECIDED: August 5, 2022

The Pennsylvania Environmental Defense Foundation (“PEDF”) comes before this 

Court for the third time challenging the use of proceeds from oil and gas leasing on the 

Commonwealth’s forest and park lands as violative of Article I, Section 27 of the 

Pennsylvania Constitution, also known as the Environmental Rights Amendment.

(“Section 27” or “ERA”), which created a trust to conserve and maintain Pennsylvania’s 

public natural resources.

1

 In the first two cases, PEDF challenged several 2009-2015 

 

1 Article I Section § 27, entitled “Natural resources and the public estate.” provides in full 

as follows:

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

preservation of the natural, scenic, historic and esthetic 
[J-82-2021] - 2

budgetary provisions enacted in the wake of the dramatic increase in oil and gas revenue 

resulting from Marcellus Shale exploration in Pennsylvania. Applying trust principles, this

Court held that the budgetary provisions violated Section 27 by utilizing the oil and gas 

revenue for non-trust purposes via transfers to the General Fund. PEDF v. 

Commonwealth, 161 A.3d 911 (Pa. 2017) (“PEDF II”); PEDF v. Commonwealth, 255 A.3d 

289 (Pa. 2021) (“PEDF V”).

PEDF’s current declaratory judgment action filed against the Commonwealth of 

Pennsylvania and Governor Tom Wolf (collectively, “the Commonwealth”), raises

numerous constitutional challenges to provisions of the General Appropriations Act of 

2017 and 2018, as well as the 2017 Fiscal Code amendments, all of which were enacted 

after our decision in PEDF II.

2

 As discussed in detail below, these challenges can be 

grouped into several categories. First, PEDF contests the constitutionality of the use of

trust resources to fund the Department of Conservation and Natural Resources’ 

(“DCNR’s”) general operations. Second, PEDF seeks a declaration that the revenue from

oil and gas leasing on State forest and park lands should be reserved for environmental 

programs tied to the Marcellus Shale region from which the oil and gas revenue derived. 

Third, PEDF challenges the repeal of the Oil and Gas Lease Fund Act and the transfer of 

 

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. 1, § 27.

2 General Appropriations Act of 2017, Act of July 11, 2017, P.L. 1279, No. 1A, §§ 104(P), 

1601; General Appropriations Act of 2018, Act of June 22, 2018, P.L. 1203, No. 1A, 

§§ 104(P), 1601; 72 P.S. §§ 1601.2-E; 1726-G.
[J-82-2021] - 3

the Oil and Gas Lease Fund (“Lease Fund”) to the control of the General Assembly.3 

Finally, PEDF questions the constitutionality of specific aspects of the Lease Fund. For 

the reasons set forth below, we conclude that PEDF has failed to demonstrate that the

challenged provisions violate the Pennsylvania Constitution. Accordingly, we affirm the 

order of the Commonwealth Court, although based on different reasoning. 

I. PEDF II and IV 4

Our decisions addressing PEDF’s prior challenges elucidate several principles of 

Pennsylvania’s nascent Section 27 jurisprudence directly applicable to the case at bar. 

 

3 71 P.S. §§ 1331-1333 (repealed).

4 PEDF’s declaratory judgment actions have generated numerous opinions from this 

Court and the Commonwealth Court. As the parties to these actions are identical, so too 

are the captions. Accordingly, we will use the following numerical indicators to

differentiate the opinions, which we describe in more detail in the body of this opinion. 

The Commonwealth Court first addressed PEDF’s challenges to the 2009-2015 

budgetary provisions in PEDF v. Commonwealth, 108 A.3d 140 (Pa. Cmwlth. 2015) 

(“PEDF I”), which this Court reversed in PEDF v. Commonwealth, 161 A.3d 911 (Pa. 

2017) (“PEDF II”), concluding that royalties from the oil and gas leasing must be returned 

to the trust corpus and remanding for the Commonwealth Court to apply private trust 

principles to address the bonus payments, rents, and interest payments. On remand, the 

Commonwealth Court applied what it deemed to be relevant private trust law principles 

in PEDF v. Commonwealth, 214 A.3d 748 (Pa. Cmwlth. 2019) (“PEDF III”). 

While the remand following PEDF II was pending in the Commonwealth Court, 

PEDF filed the instant declaratory judgment action in that court challenging the 2017 and 

2018 budgetary provisions, enacted after our 2017 decision in PEDF II. The 

Commonwealth Court’s unpublished decision adjudicating the challenges to the 2017 and 

2018 provisions can be found at PEDF v. Commonwealth, 2020 WL 6193643, at *1 (Pa. 

Cmwlth. 2020), and will be referenced herein as PEDF IV.

PEDF’s current appeal of PEDF IV was pending in this Court when we reversed 

the Commonwealth Court’s decision in PEDF III in PEDF v. Commonwealth, 255 A.3d 

289, 294 (Pa. 2021) (PEDF V). While we will utilize the designations of PEDF I-V in this 

opinion, we will strive to clarify the relevant decisions with descriptive phrases where 

possible. 
[J-82-2021] - 4

As noted, PEDF challenged several 2009-2015 amendments to the Fiscal Code, as well 

as a provision of the Supplemental General Appropriations Act of 2009.

5

 Broadly 

considered, these provisions diverted revenues from the oil and gas leases on State 

forest and park lands into the General Fund under the control of the General Assembly.

Prior to the challenged enactments and pursuant to the Oil and Gas Lease Fund 

Act, all rents and royalties from oil and gas leasing on state land were deposited into the 

Lease Fund and appropriated entirely to the DCNR (or its predecessor) to be “exclusively 

used for conservation, recreation, dams, or flood control.”

6

 71 P.S. §§ 1331, 1333

(repealed). In contrast, the 2009-2015 budgetary enactments, inter alia, provided that 

royalties from the Lease Fund could only be expended if “appropriated or transferred to 

the General Fund by the General Assembly[,]” apart from an annual appropriation of up 

to $50 million to the DCNR, with the direction that the DCNR “shall give preference to the 

operation and maintenance of State parks and forests.” 72 P.S. §§ 1602-E, 1603-E.

While additional appropriations were made to the DCNR from the Lease Fund

through legislative direction, other enactments directed funds to the General Fund without 

any restriction that they be used for conservation purposes. 72 P.S. §§ 1604-E, 1605-E. 

Concomitantly, the DCNR received decreased funding from the General Fund. Thus, “a 

larger portion of monies from the Lease Fund [were] 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.” PEDF 

II, 161 A.3d at 923. PEDF argued that these provisions violated the Commonwealth’s 

fiduciary duties under the ERA. 

 

5 Specifically, PEDF challenged 72 P.S. §§ 1602-E -1605-E as well as Act of Oct. 9, 2009, 

P.L. 779, No. 10A, § 1912.

6 The Oil and Gas Lease Fund Act is set forth in full infra. PEDF II provides a more 

extensive historical perspective relating to the creation of the DCNR and the Oil and Gas 

Lease Fund Act. PEDF II, 161 A.3d at 919-920.
[J-82-2021] - 5

In addressing these claims, this Court in PEDF II adopted the reasoning of the 

landmark decision in Robinson Township v. Commonwealth, 83 A.3d 901 (Pa. 2013) 

(plurality), which revitalized the long dormant Environmental Rights Amendment. 

Notably, the ERA is included in Article I and, thus, is among the rights reserved to the 

people that are “excepted out of the general powers of government and shall forever 

remain inviolate.” PA. CONST. art. 1, § 25.7 We explained that the ERA established “a 

public trust, pursuant to which the natural resources are the corpus of the trust, the 

Commonwealth is the trustee, and the people are the named beneficiaries.” PEDF II, 161 

A.3d at 931-32. 

This constitutional public trust imposed fiduciary duties on Commonwealth entities 

to “conserve and maintain [our public natural resources] for the benefit of all the people.” 

PA. CONST. art. 1, § 27. Drawing from Robinson Township, we explained that “[t]he 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” and a duty to act 

toward the corpus of the trust “with prudence, loyalty, and impartiality.” PEDF II, 161 A.3d 

at 932 (quoting Robinson Twp., 83 A.3d at 957). The Court concluded that the public 

trust was subject to basic trust principles in effect at the time of enactment of the ERA, 

including the restriction that proceeds from the sale of trust assets should remain part of 

the corpus of the trust and that trust assets could be used “only for purposes authorized 

by the trust or necessary for the preservation of the trust.” PEDF II, 161 A.3d at 933. 

 

7 Section 25, entitled “Reservation of powers in people” provides:

To guard against transgressions of the high powers which we 

have delegated, we declare that everything in this article is 

excepted out of the general powers of government and shall 

forever remain inviolate.

PA. CONST. art. 1, § 25.
[J-82-2021] - 6

In PEDF II, this Court held that the royalties generated by the oil and gas leases 

clearly derived from the sale of trust assets and, thus, had to be returned to the trust 

corpus. Accordingly, we deemed facially unconstitutional those statutory provisions that

directed royalties to be paid over to the General Fund without any restrictions that the 

funds be used for conservation and maintenance of trust assets. Id. at 937-38. In so

doing, however, we clarified “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.” Id. at 939. Indeed, “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.” Id. 

While the Court had sufficient information to determine the constitutionality of the 

statutes addressing royalties, which indisputably arose from the sale of trust assets, we 

remanded to the Commonwealth Court to address the other revenue streams generated 

by the leases, including bonus payments, rental fees, and interest penalties. We directed 

that court to apply the Pennsylvania trust principles in effect when Section 27 was adopted

to determine whether these revenue streams should be deemed trust assets and 

restricted to trust purposes. Id. at 935-36. 

Following remand, this Court, in PEDF V, rejected the Commonwealth Court’s 

analysis which derived from that court’s classification of current Pennsylvanians as life 

tenants and future generations as remaindermen.8 Diverging from the Commonwealth 

 

8

In its analysis, the Commonwealth Court utilized Section 9 of the Principal and Income 

Act of 1947 (“1947 Act”), which was applicable at the time of the ERA’s enactment and 

“govern[ed] trusts where the trustee is authorized to sell, lease or otherwise develop such 

natural resources and no provision is made for the disposition of the net proceeds.” PEDF 

III, 214 A.3d at 768 (citing Act of July 5, 1947, P.L. 1283, as amended, formerly 20 P.S. 

§§ 3470.1-3740.15). This statute apportioned proceeds of the trust between life tenants 

and remaindermen. Id. at 765.
[J-82-2021] - 7

Court, we concluded that the constitutional text did not create successive beneficiaries of

current and future Pennsylvanians but rather established a cross-generational unity of 

interest in the conservation and maintenance of the public natural resources through 

Section 27’s use of the phrase “all the people.” PEDF V, 255 A.3d at 309-10 (relying 

upon Robinson Twp., 83 A.3d at 959). Accordingly, we concluded that the ERA created 

“simultaneous beneficiaries with equal interest in the trust’s management,” which negated 

any allocation of income between life tenants and remaindermen, a distinction created in

the Commonwealth Court’s analysis. Id. at 310. We nevertheless agreed with the 

Commonwealth Court’s determination that the bonus payments, rental fees, and interest 

fees were income rather than funds resulting from the sale of trust assets. Id. at 308. 

The question remaining was whether this income should be reserved solely for trust 

purposes. 

In considering this question, the Court observed that Pennsylvania trust law clearly 

provided that a trustee has a duty to deal impartially with all beneficiaries. Id. at 311 

(citing RESTATEMENT (SECOND) OF TRUSTS § 183 and 20 Pa.C.S. § 7773). Under the ERA, 

the benefit accorded to the people of Pennsylvania as beneficiaries is not an entitlement 

to income but rather the conservation and maintenance of public natural resources. 

Given “the absence of income entitlements, there is no authority for [the Commonwealth]

 

Under this statute, life tenants were entitled to one-third of the net proceeds, while 

two-thirds had to be reserved to the trust corpus. Accordingly, the Commonwealth Court 

declined to find the remaining 2009-2015 budgetary provisions facially unconstitutional 

as PEDF had not demonstrated that the non-trust uses exceeded one-third of the 

proceeds from rent and bonus payments.

Relevantly, the Commonwealth Court applied the same analysis to PEDF’s current 

challenges to the 2017 and 2018 budgetary provisions, as discussed infra. For the 

reasons stated in PEDF V, we again are restrained to reject the Commonwealth Court’s 

analysis to the extent it relied upon the 1947 Act’s division of revenue between life tenants 

and remaindermen.
[J-82-2021] - 8

to generate income from oil and gas assets and then use that income to benefit itself for 

non-trust purposes and not the beneficiaries.” Id. at 313.

Thus, the Court held that “the income generated from bonus payments, rentals, 

and late fees must be returned to the corpus to benefit the conservation and maintenance 

of the public resources for all the people” and could not be diverted to non-trust purposes 

of the General Fund. Id. at 314. Accordingly, the challenged 2009-2015 budgetary 

provisions were facially unconstitutional as they directed income to the General Fund 

without restriction. We nevertheless reiterated our observation in PEDF II 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,” so long as the 

assets are directed to entities “dedicated to effectuating” Section 27’s purpose of 

conserving and maintaining Pennsylvania’s natural resources. Id. at 314 n.21 (quoting 

PEDF II, 161 A.3d at 939). 

II. Procedural History and Standard of Review

The current challenge involves PEDF’s 2018 petition for review filed pursuant to 

the Declaratory Judgement Act, 42 Pa.C.S. §§ 7531-7541, seeking numerous 

declarations that certain provisions in the General Appropriations Acts of 2017 and 2018,

as well as in the 2017 amendments to the Fiscal Code, violate the ERA.9 In its answer 

 

9 The Commonwealth Court summarized the declarations sought by PEDF as follows:

(1) the appropriations from the Lease Fund contained in 

Sections 104(P) and 1601 of the General Appropriation Acts 

of 2017 and 2018 for the DCNR's government operations are 

facially unconstitutional; 

(2) the use of these appropriations for environmental 

initiatives beyond Pennsylvania's Marcellus Shale region are 

likewise facially unconstitutional; 
[J-82-2021] - 9

and new matter, the Commonwealth responded in opposition to each of PEDF’s proposed 

declarations. Ultimately, the parties filed cross-applications for summary relief, which the 

Commonwealth Court granted in part and denied in part.10 PEDF appealed to this Court, 

 

(3) the repeal of the act commonly referred to as the 1955 Oil 

and Gas Lease Fund Act (1955 Lease Fund Act) is facially 

unconstitutional; 

(4) Section 1601.2-E of The Fiscal Code is facially 

unconstitutional; 

(5) Section 1726-G of The Fiscal Code is facially 

unconstitutional; and 

(6) affirmative legislation and a detailed accounting are 

required to ensure that the Lease Fund is protected and used 

in accordance with Section 27.

PEDF IV, 2020 WL 6193643, at *3 (reformatted).

10 As will be explained in detail infra, the Commonwealth Court made the following 

determinations:

We grant [PEDF’s] Application insofar as it seeks a 

declaration that the Commonwealth is required to maintain 

accurate records of the Lease Fund and track trust principal 

as part of its trustee duties, and we deny the Application in all 

other respects. 

We grant the Commonwealth's Application for Summary 

Relief upon concluding that the following legislative 

enactments are not facially unconstitutional: Sections 104(P) 

and 1601 of the General Appropriation Acts of 2017 and 2018; 

the repeal of the 1955 Lease Fund Act; Section 1601.2-E of 

The Fiscal Code; and Section 1726-G of The Fiscal Code. 

We also grant the Commonwealth's declaratory request that 

Lease Fund money, including trust principal, may be 

expended on environmental conservation initiatives beyond 

the Marcellus Shale region. 
[J-82-2021] - 10

asking us to reverse the Commonwealth Court in relevant part and to grant the denied 

declarations. 

In reviewing “the Commonwealth Court's decision on cross-motions for summary 

relief pursuant to Pa.R.A.P. 1532(b), we may grant relief only if no material questions of 

fact exist and the right to relief is clear.” PEDF II, 161 A.3d at 929 (citations omitted). The 

parties agree that this case does not involve any issues of fact but rather solely presents 

pure questions of law. PEDF IV, 2020 WL 6193643, at *4. Thus, “our standard of review 

is de novo, and our scope of review is plenary.” PEDF II, 161 A.3d at 929.

In challenging the constitutionality of duly enacted statutory provisions that are 

presumed to be constitutional, PEDF bears the burden of demonstrating that the 

provisions “clearly, plainly, and palpably” violate the Constitution. Id. As PEDF presents 

facial challenges to the statutes, we reiterate that “[a] statute is facially unconstitutional 

only where there are no circumstances under which the statute would be valid.” 

Germantown Cab Company v. Philadelphia Parking Authority, 206 A.3d 1030, 1041 (Pa. 

2019). 

As this Court opined in PEDF II, our review of the Commonwealth’s actions 

challenged under the ERA requires careful consideration of “the text of Article I, Section 

27 as well as the underlying principles of Pennsylvania private trust law in effect at the 

time of its enactment.” Id. at 930. 

Applying basic principles of trust law, the Commonwealth must “administer the 

[Section 27 trust] in good faith, in accordance with its provisions and purposes and the 

 

However, we deny the Commonwealth's Application insofar 

as it seeks a declaration that its current usage of the trust is 

wholly consistent with its Section 27 trustee responsibilities 

and that affirmative legislation is not necessary.

Id. at *17 (reformatted).
[J-82-2021] - 11

interests of the beneficiaries and in accordance with applicable law.” 20 Pa.C.S. § 7771. 

Moreover, the Commonwealth has a duty to treat the corpus of the trust with loyalty, 

impartiality, and prudence. PEDF II, 161 A.3d at 932. The duty of loyalty includes 

“administer[ing] the trust solely in the interest of the beneficiaries[,]” which include “all the 

people” of Pennsylvania, “including generations yet to come.” 20 Pa.C.S. § 7772; PA.

CONST. art. 1, § 27. Moreover, in acting impartially, a trustee is required to give “due 

regard to the beneficiaries’ respective interests in light of the purposes of the trust,” which 

requires equitable rather than equal treatment.11 20 Pa.C.S. § 7773. Finally, “prudent 

administration” by a trustee entails administering the trust “as a prudent person would, by 

considering the purposes, provisions, distributional requirements and other 

circumstances of the trust and by exercising reasonable care, skill and caution.” 20 

Pa.C.S. § 7774.

In light of these broad trust principles, we reiterate that Section 27 imposes

fiduciary duties on Commonwealth entities to “conserve and maintain [Pennsylvania’s

public natural resources] for the benefit of all the people,” which includes a “duty to 

prevent and remedy the degradation, diminution, or depletion of our public natural 

resources.” PA. CONST. art. 1, § 27; PEDF II, 161 A.3d at 932 (quoting Robinson Twp., 

83 A.3d at 956-57). 

III. Analysis

 

11 The duty of impartiality is defined as follows:

If a trust has two or more beneficiaries, the trustee shall act 

impartially in investing, managing and distributing the trust 

property, giving due regard to the beneficiaries' respective 

interests in light of the purposes of the trust. The duty to act 

impartially does not mean that the trustee must treat the 

beneficiaries equally. Rather, the trustee must treat the 

beneficiaries equitably in light of the purposes of the trust

20 Pa.C.S. § 7773.
[J-82-2021] - 12

As stated, PEDF sought numerous declarations, which the Commonwealth Court 

granted in part and denied in part. PEDF filed a direct appeal from that determination to 

this Court, again raising numerous challenges, which can be grouped in four categories. 

First, PEDF challenges the use of Lease Fund monies to fund the general operations of 

the DCNR. Second, PEDF faults the allocation of Lease Fund monies for environmental 

projects outside of the Marcellus Shale region from which the monies derived. Third, 

PEDF contends that the repeal of the Oil and Gas Lease Fund Act and the transfer of the 

Lease Fund to the control of the General Assembly violates the ERA. Finally, PEDF 

challenges specific statutory provisions governing the funding of the Lease Fund and

appropriations to other funds. We address these issues seriatim.

12

A. Funding the General Operations of the DCNR

PEDF seeks a declaration that Sections 104(P) and 1601 of the General 

Appropriation Acts of 2017 and 2018 violate the Commonwealth’s trustee duties by using 

trust resources to pay for the general operations of the DCNR.13 PEDF specifically 

 

12 Following the decision in PEDF V, this Court permitted the parties to file supplemental 

briefing. For ease of discussion, we provide a single recitation of the parties’ arguments 

gleaned from their presentations to the Commonwealth Court as well as to this Court. We 

do not address the parties’ arguments responding to the Commonwealth Court’s analysis 

in PEDF III, which this Court subsequently rejected in PEDF V.

13 Section 104(P) of the General Appropriations Act of 2017, Act of July 11, 2017, P.L. 

1279, provided as follows:

(p) Oil and Gas Lease Fund. -- The following sums set forth in 

this act, or as much thereof as may be necessary, are hereby 

specifically appropriated from the Oil and Gas Lease Fund to 

the hereinafter named agencies of the Executive Department 

of the Commonwealth for the payment of salaries, wages or 

other compensation and travel expenses of the duly 

appointed officers and employees of the Commonwealth, for 

the payment of fees for contractual services rendered, for the 

purchase or rental of goods and services and for payment of 
[J-82-2021] - 13

contends that revenue from oil and gas leases of State forest and park lands deposited 

in the Lease Fund should not be appropriated to pay DCNR’s general operations,

including inter alia, the “salaries, wages or other compensation and travel expenses” of 

DCNR officers and employees of the Commonwealth, or for the “purchase or rental of 

goods and services” or “any other expenses . . . necessary for the proper conduct of the 

duties, functions and activities.” Section 104(P). PEDF maintains that Section 27 does 

not authorize the Commonwealth “to sell State Forest assets to generate revenue for the 

general operating expenses of DCNR,” as such sales would deplete the resource,

contrary to the goal of conserving and maintaining Pennsylvania’s natural resources. 

PEDF Supp. Brief at 7. 

PEDF additionally argues that these General Appropriations Act provisions violate 

Section 25 by using Lease Fund monies to replace appropriations from the General Fund.

As an explanation for its position, PEDF alleges that the “passage of an annual 

appropriation act to fund general government operations for the current fiscal year is an 

Article III responsibility of the Commonwealth and cannot infringe” on the people’s rights 

under Article I, Section 27, which are “excepted out of the general powers of government

 

any other expenses, as provided by law or by this act, 

necessary for the proper conduct of the duties, functions and 

activities and for the purposes hereinafter set forth for the 

fiscal year beginning July 1, 2017, and for the payment of bills 

incurred and remaining unpaid at the close of the fiscal year 

ending June 30, 2017.

The General Appropriations Act of 2018 contained a functionally identical Section 104(P).

Act of June 22, 2018, P.L. 1203. We reference these provisions collectively as “Section 

104(P).”

Section 1601 of the 2017 General Appropriations Act appropriated to the DCNR

$50 million for general operations, nearly $8 million for state park operations, and 

approximately $3.5 million for state forest operations. The following year, Section 1601 

allocated to the DCNR approximately $37 million for general operations, $7.5 million for 

state park operations, and $4.2 million for state forest operations.
[J-82-2021] - 14

and shall forever remain inviolate” under Section 25. PEDF Brief at 28 (quoting PA.

CONST. art. 1, § 25). It contends that Commonwealth entities cannot violate their 

obligations as Section 27 trustees in order “to fulfill their constitutional duties under 

Articles III, IV, or V of the Pennsylvania Constitution to raise revenue to fund general 

budgetary matters.” PEDF Supp. Brief at 3.

The Commonwealth refutes PEDF’s argument by observing that “[c]onservation 

and maintenance activities are not accomplished in a vacuum: they require people and 

equipment.” PEDF IV, 2020 WL 6193643, at *5. It contends that the funding of DCNR’s 

general operations is a proper use of trust fund assets as the funding allows DCNR to 

perform its trustee duties to conserve and maintain Pennsylvania’s public natural 

resources; the Commonwealth emphasizes that “DCNR’s main purpose is to effectuate 

Section 27.” Cmwlth. Supp. Brief at 7. It highlights that trust law provides for trustees “to 

incur expenses which are necessary or appropriate to carry out the purposes of the trust 

and are not forbidden by the terms of the trust.” Id. at 11 (quoting RESTATEMENT (SECOND)

OF TRUSTS § 188 (1959)). 

The Commonwealth contrasts the provisions challenged herein with the statutes 

deemed unconstitutional in PEDF II, which “removed DCNR's ability to act as trustee 

because the funds were placed in the General Fund, potentially for non-conservation 

purposes.” Cmwlth. Brief at 14 (quoting PEDF II, 161 A.3d at 927). In contrast, the 

current provisions “appropriate the funds directly to the DCNR so that it can continue its 

conservation and maintenance efforts.” Id. Thus, the Commonwealth asserts that the 

allocation of lease fund monies for DCNR’s general operation does not violate the 

Commonwealth’s trustee duties under the ERA.

Rather than resolving the constitutionality of using trust resources to fund DCNR’s 

operations, the Commonwealth Court instead relied upon its then-recent analysis in 

PEDF III, which this Court subsequently respectfully rejected in PEDF V. As discussed 
[J-82-2021] - 15

supra, the Commonwealth Court in PEDF III reasoned that one-third of the revenue

derived from rents and bonus payments could be used for non-trust purposes under the 

Act of 1947, applicable at the time of the ERA’s adoption.

Applying the PEDF III analysis to the instant case, the Commonwealth Court 

distinguished the royalty transfers that this Court deemed unconstitutional in PEDF II from 

the current provisions, which involved transfers from the Lease Fund generally, thus 

including not only royalties but also rents and bonus payments. Given this distinction, the

court held that one-third of the proceeds derived from rents and bonus payments in the 

Lease Fund could be allocated to non-trust purposes under PEDF III. Having reasoned 

that it did not violate fiduciary duties for the Commonwealth to utilize one-third of these 

funds for non-trust purposes, the Commonwealth Court concluded that PEDF failed to

demonstrate that the statute was “facially unconstitutional” under Section 27, as it was 

possible that the challenged transfers could have been encompassed within the one-third 

deemed non-trust assets. PEDF IV, 2020 WL 6193643, at *7.

14

 

While it is understandable that the Commonwealth Court utilized its PEDF III

analysis in the instant case given that it pre-dated PEDF V, this portion of the court’s 

analysis cannot stand as it is directly contrary to PEDF V. PEDF V, 255 A.3d at 293. We 

nevertheless affirm the Commonwealth Court’s ultimate holding, denying PEDF’s motion 

seeking a declaration that Sections 104(P) and 1601 of the General Appropriations Acts 

of 2017 and 2018 violated the ERA. See Ario v. Ingram Micro, Inc., 965 A.2d 1194, 1200 

(Pa. 2009) (“[A]n appellate court may uphold an order of a lower court for any valid reason 

appearing from the record”).

 

14 The Commonwealth Court likewise found that PEDF’s Section 25 challenge failed as it 

hinged on a violation of Section 27. The court additionally denied the Commonwealth’s 

request to declare constitutional its use of Lease Fund monies for DCNR’s general 

operations.
[J-82-2021] - 16

In addressing PEDF’s claim, we apply fundamental principles of Pennsylvania trust 

law. As explained in PEDF II, a “trustee may use the assets of the trust only for purposes 

authorized by the trust or necessary for the preservation of the trust.” PEDF II, 161 A.3d 

at 933 (internal quotation marks omitted). One of the basic duties of a trustee is to 

administer the trust, and Pennsylvania’s trust law provides that a trustee may incur costs 

in administering the trust, so long as the costs “are reasonable.” 20 Pa.C.S. § 7775.

15

 

The Uniform Trust Law as adopted in Pennsylvania further empowers a trustee to pay 

“the compensation of the trustee and employees and agents of the trustee and other 

expenses incurred in the administration of the trust.” 20 Pa.C.S. § 7780.6(a)(8) (listing 

“illustrative powers of trustee”); see also 20 Pa.C.S. § 7769 (“A trustee is entitled to be 

reimbursed out of the trust property . . . [for] expenses that were properly incurred in the 

administration of the trust.”). 

As applied to the trust created by Section 27, this basic trust law clearly empowers 

the Commonwealth, as trustee, to incur reasonable costs in administering the trust to 

conserve and maintain Pennsylvania’s public natural resources. As noted by the 

Commonwealth, conservation and maintenance does not occur in a vacuum but instead 

require people and materials, and in particular the people and materials of the DCNR, 

which is the cabinet-level advocate for our State forest and park lands, as well as other 

natural resources. 71 P.S. § 1340.101(b). DCNR’s primary mission is, inter alia, “to 

maintain, improve and preserve State parks [and] to manage State forest lands,” which 

 

15

“In administering a trust, the trustee may incur only costs that are reasonable in relation 

to the trust property, the purposes of the trust and the skills of the trustee.” 20 Pa.C.S. 

§ 7775; see also RESTATEMENT (SECOND) OF TRUSTS § 188 (1959) (“The trustee can 

properly incur expenses which are necessary or appropriate to carry out the purposes of 

the trust and are not forbidden by the terms of the trust, and such other expenses as are 

authorized by the terms of the trust.”). Similarly, “[a] trustee shall administer the trust as 

a prudent person would, by considering the purposes, provisions, distributional 

requirements and other circumstances of the trust and by exercising reasonable care, 

skill and caution.” 20 Pa.C.S. § 7774.
[J-82-2021] - 17

are indisputably in furtherance of the purposes of the Section 27 trust.16 Id. Given these 

statutory responsibilities, we conclude that the use of trust assets to fund DCNR’s 

operations is within the authority of the Commonwealth as trustee to incur costs in

administering the Section 27 trust, absent demonstration that these administrative costs 

 

16 In full, the Conservation and Natural Resources Act explains the primary mission of the 

DCNR as follows:

The primary mission of the Department of Conservation and 

Natural Resources will be to maintain, improve and preserve 

State parks, to manage State forest lands to assure their longterm 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; see also 71 P.S. §§ 1340.302-312 (setting forth DCNR’s statutory 

authority). Our colleagues in dissent on this issue question whether all of DCNR’s 

statutory responsibilities are consistent with its Section 27 trustee duties to conserve and 

maintain Pennsylvania’s public natural resources. See Concurring and Dissenting 

Opinion at 6 (Dougherty, J.) (viewing aspects of DCNR’s mission as “not explicitly related 

to the trustees’ Article I, Section 27 duties”). 

Respectfully, we decline to determine whether all of DCNR’s statutory 

responsibilities qualify as trust purposes because PEDF, in the current litigation, presents 

a facial challenge to the use of trust assets for DCNR’s general operations, rather than 

challenging DCNR’s use of trust funds for specific administrative costs. We further 

observe that our nascent Section 27 jurisprudence has not explored what activities qualify 

as trust purposes. Accordingly, while it appears that many, if not all, of DCNR’s 

responsibilities are consistent with Section 27, we do not speak to those issues herein. 

Rather, for purposes of this case, we conclude that the existence of these other duties 

does not undermine our rejection of PEDF’s facial challenge to the appropriation of trust 

assets for DCNR’s general operations, as the challenged provisions are not inconsistent 

with DCNR’s use of the trust assets solely for trust purposes. See Germantown Cab 

Company v. Philadelphia Parking Authority, 206 A.3d 1030, 1041 (Pa. 2019) (“A statute 

is facially unconstitutional only where there are no circumstances under which the statute 

would be valid.”).
[J-82-2021] - 18

are unreasonable or that the DCNR has failed to act with prudence, loyalty, or impartiality 

in carrying out its fiduciary duties.

17

As we conclude that PEDF failed to demonstrate that the provisions violate Section 

27, we likewise find no violation of Section 25. Accordingly, we affirm the Commonwealth 

Court’s denial of PEDF’s requested declaration. 

B. Funding Environmental Projects Outside of the Marcellus Shale Region

PEDF seeks a declaration that Sections 104(P) and 1601 violate the ERA by 

allocating funds derived from oil and gas leasing in Pennsylvania’s Marcellus Shale region 

for environmental projects in other parts of the state. It avers that Commonwealth trustees 

should not be permitted “to deplete, degrade, or diminish our State Forest and Park public 

natural resources to benefit another resource.” PEDF Brief at 45. Utilizing the term “State 

Forest and Park trust corpus,” PEDF contends that the corpus of this trust should be 

reserved solely for the region from which the revenue derived to remedy any detrimental 

effects of the Marcellus Shale leasing. Id. 

The Commonwealth responds that the plain language of Section 27 does not 

provide geographic restrictions on the use of trust resources. The Commonwealth

instead emphasizes this Court’s recognition that trustees have “discretion with respect to 

the proper treatment of the corpus of the trust,” so long as that discretion is exercised in 

support of the purpose of the trust. Cmwlth. Brief at 17 (quoting PEDF II, 161 A.3d at

933). It stresses that the Section 27 trust extends to the conservation and maintenance 

 

17 We additionally address a portion of PEDF’s argument relying upon our decision in 

PEDF II, which deemed unconstitutional a statutory provision that gave preference to 

funding “the operation and maintenance of State parks and forests” rather than 

conservation purposes. PEDF II, 161 A.3d at 937-938 (quoting 72 P.S. § 1603–E). PEDF 

reads our decision as deeming the funding of DCNR’s general operations to be a nontrust use. Respectfully, we reject PEDF’s reading because this Court in PEDF II did not 

address whether the trust funds could be used to pay DCNR’s general operations, which 

is the issue resolved herein.
[J-82-2021] - 19

of public natural resources across Pennsylvania, such that it is appropriate for DCNR to 

expend trust resources to “address the broad environmental threats faced by 

Pennsylvania,” including those outside the Marcellus Shale region. Id. at 18. Indeed, it 

contends that restricting the use of these funds to the Marcellus Shale region would 

arguably violate the Commonwealth’s fiduciary duty of impartiality to the beneficiaries

across Pennsylvania. Cmwlth. Supp. Brief at 19, 26. Moreover, the Commonwealth 

observes that at the time of the ERA’s enactment, use of the Lease Fund was not 

restricted to the area that produced the funds but instead was intended to be used “for 

conservation, recreation, dams, or flood control.” Id. at 19 (quoting 71 P.S. § 1331

(repealed)).

In reviewing these claims, the Commonwealth Court found PEDF’s proposed 

geographic restriction of the use of funds to be “myopic,” when the Commonwealth was 

confronting a multitude of “environmental threats from climate change to polluted waters 

to invasive species.” PEDF IV, 2020 WL 6193643, at *8. The court instead opined that 

DCNR had discretion as trustee to determine how trust funds should be used to conserve 

and maintain all of Pennsylvania’s natural resources. Accordingly, the court denied 

PEDF’s requested declaration and granted the Commonwealth’s related declaration, 

holding that “the appropriations contained in Sections 104(P) and 1601 of the General 

Appropriation Acts of 2017 and 2018 to the DCNR for the operation of State parks and 

forests are not facially unconstitutional.” Id. at *9. 

While rejecting PEDF’s declaration that the fund must be limited to the Marcellus 

Shale region, the Commonwealth Court nevertheless “caution[ed] the Commonwealth 

that the failure to remedy the degradation, diminution, or depletion of the State forests 

and parks impacted by Marcellus wells - the very public resources harmed in order to 

generate these funds - may constitute a failure to preserve the trust and a dereliction of 

its fiduciary duties under Section 27.” Id. at *9 n.16.
[J-82-2021] - 20

As noted by the Commonwealth Court, the broad language of Section 27 instructs

that “Pennsylvania's public natural resources are the common property of all the people, 

including generations yet to come” and that the Commonwealth, as “trustee of these 

resources,” “shall conserve and maintain them for the benefit of all the people.” PA.

CONST. art. 1, § 27. Absent from this language is any regional segmentation of trust 

assets or beneficiaries nor a prioritization of regions deserving of conservation and 

maintenance efforts. Contrary to PEDF’s terminology, our charter does not create a 

“State Forest and Park trust corpus.” Instead, Section 27 speaks in the unifying terms of

“Pennsylvania’s natural resources” and twice encompasses “all the people.” Id. 

Accordingly, we affirm the Commonwealth Court’s denial of PEDF’s proposed declaration 

seeking to regionalize Pennsylvania natural resources and to limit expenditure of oil and 

gas revenue to the Marcellus Shale Region from which it derived.

18

C. Oil and Gas Lease Fund Challenges

PEDF next asks this Court to deem unconstitutional the 2017 repeal of the 1955 

Oil and Gas Lease Fund Act,

19 and the enactment of Section 1601.2-E of the Fiscal Code, 

 

18 PEDF raises a related issue in its challenge to Section 1601.2-E(e) of the Fiscal Code, 

set forth infra at 22 n.20. Section 1601.2-E(e) directs specific annual transfers from the 

Lease Fund to the Marcellus Legacy Fund for distribution to the Environmental 

Stewardship Fund and the Hazardous Sites Cleanup Fund. 

PEDF alleges that these transfers violate Section 27 because these funds support 

statewide projects that are not limited to the Marcellus Shale region and not controlled by

the DCNR, and also because these funds were previously supported through non-trust 

sources, including a waste disposal fee and the Capital Stock and Franchise Tax. As 

these allegations fail for the same reasons PEDF’s challenges to the General 

Appropriations Act provisions fall, we will not address them separately below.

19 The Oil and Gas Lease Fund Act was repealed in Section 20(2)(i) of the 2017 Fiscal 

Code Amendments, Act of October 30, 2017, P.L. 725 (“2017 Fiscal Code Amendments”). 

Prior to its repeal, the Act provided in full as follows:
[J-82-2021] - 21

which “continued” the Lease Fund “as a special fund in the State Treasury.” 2017 Fiscal 

Code Amendments § 20(2)(i); 72 P.S. § 1601.2-E(a).20 The effect of Section 1601.2-E is 

 

Section 1. 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.

Section 2. It shall be within the discretion of the [DCNR] to 

determine the need for and the location of any project 

authorized by this act. The Secretary of [DCNR] shall have the 

power to acquire in the name of the Commonwealth by 

purchase, condemnation or otherwise such lands as may be 

needed.

Section 3. All the moneys from time to time paid into the “Oil 

and Gas Lease Fund” are specifically appropriated to the 

[DCNR] to carry out the purposes of this act.

71 P.S. §§ 1331-1333 (repealed). When originally enacted in 1955, the Oil and Gas 

Lease Fund Act granted discretion over the funds to the Department of Forests and 

Waters. The General Assembly subsequently substituted the DCNR for the Department 

of Forests and Waters pursuant to the Conservation and Natural Resources Act (CNRA) 

in 1995. 71 P.S. § 1340.304(c). A more extensive recounting of the history of the Oil and 

Gas Lease Fund Act, the CNRA, and leasing on State forest and park lands can be found 

in this Court’s decision in PEDF V, 255 A.3d at 293-294.

20 Section § 1601.2-E, entitled “Oil and Gas Lease Fund” provides in full as 

follows:

(a) Continuation. -- The fund is continued as a special fund in 

the State Treasury.

(b) Sources. -- The following shall be deposited into the fund:
[J-82-2021] - 22

 

(1) Rents and royalties from oil and gas leases of land 

owned by the Commonwealth, except rents and 

royalties received from game and fish lands.

(2) Amounts as provided under section 5 of the act of 

October 8, 2012 (P.L. 1194, No. 147), known as the 

Indigenous Mineral Resources Development Act.

(3) Any other money appropriated or transferred to the 

fund.

(c) Use. -- Money in the fund may only be used as provided 

under subsection (e) or as annually appropriated by the 

General Assembly. In making an appropriation from the fund, 

the General Assembly shall consider the Commonwealth's 

trustee duties under section 27 of Article I of the Constitution 

of Pennsylvania.

(d) Priority. -- Money appropriated from the fund under a 

General Appropriation Act or other appropriation act shall be 

distributed prior to allocations under subsection (e).

(e) Annual transfers. -- The following apply:

(1)(i) Except as provided under subparagraph (ii), for 

the 2017-2018 fiscal year and each fiscal year 

thereafter, $20,000,000 shall be transferred from the 

fund to the Marcellus Legacy Fund for distribution to 

the Environmental Stewardship Fund.

(ii) No amount shall be transferred from the fund to the 

Marcellus Legacy Fund for distribution to the 

Environmental Stewardship Fund for the 2019-2020, 

2020-2021 and 2021-2022 fiscal year.

(2) For the 2017-2018 fiscal year and each fiscal year 

thereafter, $15,000,000 shall be transferred from the 

fund to the Marcellus Legacy Fund for distribution to 

the Hazardous Sites Cleanup Fund.

72 P.S. § 1601.2-E. 
[J-82-2021] - 23

to remove the Lease Fund from the sole control of the DCNR, where its use was restricted 

to “conservation, recreation, dams, or flood control,” and instead to transfer the control to 

the General Assembly. 71 P.S. § 1331 (repealed). Subsection (c), however, directs that 

“[m]oney in the [Lease Fund] may only be used as provided under subsection (e) 

[directing specific annual transfers] or as annually appropriated by the General 

Assembly.” 72 P.S. § 1601.2-E(c). Subsection (c) additionally mandates that “the 

General Assembly shall consider the Commonwealth’s trustee duties under section 27 of 

Article I of the Constitution of Pennsylvania,” when making appropriations from the Lease 

Fund. 72 P.S. § 1601.2-E(c). 

PEDF asserts that the repeal of the Oil and Gas Lease Fund Act and transfer of 

the Lease Fund in Section 1601.2-E violated the Environmental Rights Amendment

because the General Assembly eliminated the restrictions on the use of the funds that

had been explicitly imposed by the Oil and Gas Lease Fund Act. It also claims that the 

removal of the Lease Fund from DCNR’s control eliminated the prior arrangement 

whereby DCNR had the statutory authority both to lease State forest and park lands for 

oil and gas exploration and extraction and to dispense funds to remedy any harm resulting 

from those leases. PEDF deems the restrictions imposed by subsection (c) on the 

General Assembly to be insufficient, asserting that subsection (c) fails to restrict Lease 

Fund monies solely for conservation and maintenance of Pennsylvania’s natural 

resources.

In response, the Commonwealth emphasizes that the repeal and transfer did not 

result in the elimination of the Lease Fund but rather the explicit continuation of the Lease 

Fund as a “special fund in the State Treasury,” 72 P.S. § 1601.2-E(a). Moreover, the 

Commonwealth highlights this Court’s observation in PEDF II, 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 the ERA imposes trustee 
[J-82-2021] - 24

duties not merely on the DCNR but on all Commonwealth entities. Cmwlth. Brief at 19 

(quoting PEDF II, 161 A.3d at 939). 

The Commonwealth additionally highlights that the plain language of subsection 

(c) explicitly directs the General Assembly to consider its trustee duties under the ERA

when making appropriations, in contrast to the provisions deemed unconstitutional in 

PEDF II, which allowed for unrestricted transfers to the General Fund for non-trust uses. 

Indeed, it argues that any appropriation by the General Assembly of Lease Fund monies 

for non-trust purposes would violate Section 1601.2-E(c), in addition to Section 27. 

The Commonwealth Court addressed PEDF’s challenges to subsections (a) and 

(c) separately. In addressing the “continuation” of the Lease Fund in subsection (a), the 

Commonwealth Court rejected PEDF’s facial challenge, concluding that the absence of

explicit restrictions on the use of the Lease Fund in the text of Section 1601.2-E(a) did 

not violate Section 27, given that all Commonwealth entities were bound by “Section 27's 

constitutional requirement that trust principal must be used for trust purposes.” PEDF IV, 

2020 WL 6193643, at *11. 

The court, however, found support in PEDF II for PEDF’s challenge to subsection 

(c). Specifically, it equated subsection (c)’s language, dictating that the “General 

Assembly shall consider the Commonwealth’s trustee duties under [S]ection 27,” to 

language that this Court deemed inadequate to remedy the constitutional violation in 

PEDF II, where Section 1602-E instructed that the “General Assembly shall consider the 

adoption of an allocation to municipalities impacted by a Marcellus well.” PEDF IV, 2020 

WL 6193643, at *13. 

The Commonwealth Court, nevertheless, concluded that Section 1601.2-E(c) did 

not facially violate Section 27 relying again upon its analysis in PEDF III, which deemed 

it permissible to use one-third of the non-royalty revenues for non-trust purposes. In so 

doing, the court distinguished the section deemed unconstitutional by this Court in PEDF 
[J-82-2021] - 25

II, which solely involved a transfer of royalties, from the section at issue in the current 

case, which directed a transfer from the Lease Fund generally. Given that it was possible 

that the transfers could be encompassed within the one-third that it viewed as permissible 

to use for non-trust purposes, the court concluded that PEDF failed to demonstrate that 

Section 1601.2-E(c) facially violated the ERA. Accordingly, the Commonwealth Court 

granted the Commonwealth’s application for declaratory relief and denied PEDF’s 

contrary application.

As with the Commonwealth Court’s analysis of PEDF’s challenge to the use of 

Lease Fund assets for DCNR’s general operations, we affirm the court’s denial of PEDF’s 

proposed declaration but diverge from its reasoning to the extent it relies upon the nowrejected analysis in PEDF III permitting one-third of non-royalty revenues to be used for 

non-trust purposes. In contrast, we conclude that the decision in PEDF II answers 

PEDF’s challenge to both Subsections 1601.2-E(a) and (c). 

In PEDF II, we observed that “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,” because DCNR is not the only Commonwealth entity with a 

fiduciary duty under Section 27. PEDF II, 161 A.3d at 939. Instead, all Commonwealth 

entities, including the General Assembly, are bound to conserve and maintain 

Pennsylvania’s public natural resources. PEDF II, 161 A.3d at 931 n.23. Thus, as we 

explained in both PEDF II and PEDF V, “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.” PEDF II, 161 A.3d at 939; PEDF V, 255 A.3d at 314 n.21. 

Section 1601.2-E(c) expressly reminds the General Assembly of its duties in 

administering the Lease Fund mandating that “the General Assembly shall consider the 

Commonwealth's trustee duties under section 27 of Article I of the Constitution of 

Pennsylvania.” 72 P.S. § 1601.2-E(c). In contrast to the Commonwealth Court and the 
[J-82-2021] - 26

Concurring and Dissenting Opinion, we find subsection (c)’s reiteration of the General 

Assembly’s Section 27 duties to be entirely distinguishable from the constitutionally 

insufficient provision in Section 1602-E, under review in PEDF II, which merely directed 

the Commonwealth to “consider . . . an allocation to municipalities impacted by a 

Marcellus well.” 72 P.S. § 1602-E. The fact that both statutes use the verb “consider” 

does not render them equivalent. Rather, the operative portion of the provision is what 

follows the verb: specifically, what must be considered. While one requires consideration 

of mandatory trustee duties imposed by Section 27, the other suggests a specific

allocation of resources to one of many potentially constitutional purposes. 

We further observe that the language of subsection (c) seems intended to remedy 

the fault identified in PEDF II. In that case, we criticized the statute reviewed therein for 

the absence of any “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.” PEDF II, 161 A.3d at 938. The current language 

addresses these failings by expressly requiring that “the General Assembly shall consider 

the Commonwealth's trustee duties under section 27 of Article I of the Constitution of 

Pennsylvania.” 72 P.S. § 1601.2-E(c). Thus, we reject PEDF’s facial challenge to the 

repeal of the Oil and Gas Lease Fund Act and its continuation in Section 1601.2-E. 21 

 

21 In rejecting PEDF’s challenge, we agree with Justice Dougherty’s statement that

Section 27 and our decisions in PEDF II and V require the General Assembly to “‘exercise 

reasonable care’ in administering the trust.” Concurring and Dissenting Opinion at 4 

(quoting PEDF II, 161 A.3d at 938) (Dougherty, J.). Respectfully, we diverge from the 

responsive opinion because we read the current language of Section 1601.2-E(c) to 

incorporate the duty to exercise reasonable care. See 1 Pa.C.S. § 1922(3) (providing 

that in interpreting legislative intent, courts may presume “[t]hat the General Assembly 

does not intend to violate the Constitution”). 

As stated above, Section 1601.2-E(c) instructs that the General Assembly “shall 

consider the Commonwealth’s trustee duties under section 27 of Article I of the 
[J-82-2021] - 27

While Section 1601.2-E(c) is facially constitutional as it requires the General 

Assembly to consider its mandatory trustee duties and does not authorize the 

Commonwealth to use trust assets for non-trust purposes, our holding herein does not 

negate the potential of an as applied challenge to the General Assembly’s ultimate 

appropriation of the Lease Fund. We reiterate that in expending funds from the newly 

transferred Lease Fund, the General Assembly has a duty to conserve and maintain the 

Section 27 trust assets which “implicates a duty to prevent and remedy the degradation, 

diminution, or depletion of our public natural resources” and a duty to act toward the 

corpus of the trust “with prudence, loyalty, and impartiality.” PEDF II, 161 A.3d at 932

(quoting Robinson Twp., 83 A.3d at 956–57). 22 

D. Section 1601.2-E(b) – Commingling of Funds 

PEDF next challenges the constitutionality of Section 1601.2-E(b), which sets forth

the “sources” of the Lease Fund. Specifically, it provides for the inclusion in the Lease 

 

Constitution of Pennsylvania.” While the responsive opinion reads this phrase as 

providing for the General Assembly’s “mere consideration” of its trustee duties, we view 

this language as an express reminder to the General Assembly of its mandatory duties 

imposed by the Constitution. Concurring and Dissenting Opinion at 8. The statute’s 

arguably inarticulate use of the verb “consider” does not negate the mandatory nature of 

the General Assembly’s Section 27 duties. 

These duties, as interpreted by this Court in PEDF II and V, include, inter alia, the 

duty to act with prudence toward the corpus of the trust, which is defined as incorporating 

the duty of “exercising reasonable care, skill and caution” in administering the trust. 20 

Pa.C.S. § 7774. While the General Assembly could have listed each of the Section 27 

trustee duties or quoted this Court’s summary of those duties, including the exercise of 

reasonable care, the absence of such explication does not undermine the constitutionality 

of Section 1601.2-E(c). 

22 In conjunction with this and the other arguments raised, PEDF seeks a declaration that 

the Commonwealth must “petition the court for a declaration of compliance with Section 

27 prior” to engaging in the challenged activities. PEDF Brief at 58. We reject this 

argument outright as our constitution’s tripartite system of government does not provide 

for judicial pre-approval of legislative or executive action. 
[J-82-2021] - 28

Fund of trust assets of “rents and royalties from oil and gas leases of land owned by the 

Commonwealth” along with funds derived from the Indigenous Mineral Resources 

Development Act and “[a]ny other money appropriated or transferred to the fund.”23

PEDF contends that this comingling of trust and non-trust assets violates the basic trust 

principle requiring a trustee to maintain separate accounts for trust assets. The 

Commonwealth responds that Section 27 does not mandate separate accounts. 

The Commonwealth Court rejected PEDF’s assertions, determining that the 

addition of other funds to the Oil and Gas Lease Fund did not render the statute facially

unconstitutional given that the statute could be applied constitutionally if the 

Commonwealth appropriated the entirety of the funds solely for trust purposes. The court 

cautioned, however, that a constitutional issue could arise if the Lease Fund was used 

for non-trust purposes. Thus, it opined that the Commonwealth trustees should maintain 

“a clear accounting and identification of corpus funds . . . to ensure that these funds are 

properly used in strict compliance with Section 27.”

24 Id. at *12. It concluded, however, 

that while the Commonwealth should engage in an accounting, the absence of language 

requiring an accounting did not render Section 1601.2-E(b) unconstitutional. 

We affirm the Commonwealth Court’s holding. We reiterate that a party 

challenging a duly-enacted statute has the burden of demonstrating that the statute 

“clearly, plainly, and palpably violates the Constitution.” PEDF II, 161 A.3d at 929 (internal 

quotation marks omitted). In this case, PEDF failed to demonstrate that Section 1601.2-

 

23 Section 1601.2-E(b) is set forth in full supra at 22, n.20.

24 The court granted PEDF’s separate request for a declaration that the “Commonwealth, 

as trustee of Pennsylvania's public natural resources, is required to keep detailed 

accounts of the trust monies derived from the oil and gas leases and track how they are 

spent as part of its administration of the trust.” PEDF IV, 2020 WL 6193643, at *17. The 

Commonwealth has not appealed that holding to this Court.
[J-82-2021] - 29

E(b) is facially unconstitutional given that the Commonwealth may fulfill the dictates of 

Section 1601.2-E(b) without violating its trustee duties under Section 27, by segregating 

the monies from the different funds and keeping an accurate accounting.

25

 Moreover, as 

noted by the Commonwealth Court, it may avoid improper expenditure of the funds by 

restricting the Lease Fund’s use solely to trust purposes. Accordingly, we conclude that 

PEDF failed to demonstrate that Section 1601.2-E(b) is facially unconstitutional. 

E. Section 1726-G of the Fiscal Code

Finally, PEDF challenges Section 1726-G’s transfer of funds from the Keystone 

Recreation, Park and Conservation Fund (“Keystone Fund”) to the General Fund.

26

 It 

emphasizes that the Keystone Fund had previously been used by the DCNR to improve 

 

25 A trustee has a duty to maintain “adequate records of the administration of the trust” 

and to “keep trust property separate from the trustee's own property.” 20 Pa.C.S. 

§ 7780(a), (b).

26 Section 1726-G of the Fiscal Code, entitled “Fund transfers,” provides as follows:

During the 2017-2018 fiscal year, $300,000,000 shall be 

transferred from amounts available in special funds and

restricted accounts to the General Fund. The transfers under 

this section shall be in accordance with the following:

(1) The Secretary of the Budget shall transmit to the State 

Treasurer a list of amounts to be transferred from special 

funds and restricted accounts to the General Fund.

(2) Upon receipt of the list under paragraph (1), the State 

Treasurer shall cause the transfers under paragraph (1) to 

occur.

72 P.S. § 1726-G. Included in the $300,000,000 was a transfer of $10,000,000 from the 

Keystone Fund to the General Fund. See Petitioner's Brief in Supp. of Application for 

Summ. Relief, Exhibit J, Commonwealth’s Supplemental Answer and Objections to First 

Set of Interrogatories, ¶16.
[J-82-2021] - 30

State forest and parks. 27 PEDF claims that reducing this line of funding constitutes a 

violation of the Commonwealth’s trustee obligations under Section 27, which should have 

entailed public notice and an evaluation of the effect of the transfer of these funds on 

DCNR and the projects affected by the reduced funding. 

The Commonwealth Court denied relief to PEDF. The court observed that the 

Keystone Fund derives not from the proceeds of oil and gas leasing but instead from the 

sales of bonds and notes and the State Realty Transfer Tax. PEDF IV, 2020 WL 

6193643, at *15 (citing 32 P.S. § 2014). Thus, it opined that “the transfer of funds from 

the Keystone Fund to the General Fund does not run afoul of Section 27 or impugn the 

Commonwealth's fiduciary duties as trustee.” Id. 

The Commonwealth Court additionally rejected PEDF's claim that the 

Commonwealth entities breached their fiduciary duties by failing to provide public 

evaluation of the environmental impact of the transfer from the Keystone Fund. The court 

concluded that Commonwealth entities are not obligated by their fiduciary responsibilities 

under Section 27 to provide public evaluation of every transfer of non-trust funds that 

might implicate Pennsylvania’s natural resources. 

We affirm the Commonwealth Court’s denial of PEDF’s proposed declaration in 

regard to Section 1726-G based upon its conclusion that the transfer from the Keystone 

Fund does not implicate Section 27. As the Commonwealth Court observed, the 

Keystone Fund does not involve trust assets but rather allocates funds derived from nontrust sources of Commonwealth revenue. We likewise do not find support in Section 27 

or basic trust law for PEDF’s claim that the Commonwealth must provide a public 

evaluation for every decision that could potentially impact Pennsylvania’s natural 

resource trust. 

 

27 The General Assembly provided that one of the purposes of the Keystone Act, which 

created the Keystone Fund is to provide “[a] predictable and stable source of funding”

funding for state parks. 32 P.S. § 2012(6). 
[J-82-2021] - 31

IV. Conclusion 

For the reasons set forth above, we affirm the order of the Commonwealth Court, 

while rejecting that portion of the court’s analysis derived from its decision in PEDF III, 

214 A.3d 748. 

Justices Todd, Donohue and Mundy join the opinion.

Justice Donohue files a concurring opinion in which Justice Todd joins.

Justice Mundy files a concurring opinion.

Justice Dougherty files a concurring and dissenting opinion.

Justice Wecht files a concurring and dissenting opinion.

Former Justice Saylor did not participate in the consideration or decision of this

matter.