Pennsylvania Environmental Defense Foundation v. Commonwealth
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Opinions
OPINION
JUSTICE DONOHUE
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 them 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.
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, 623 Pa. 564, 83 A.3d 901 (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:
It is not a historical accident that the Pennsylvania Constitution now places citizens’ environmental rights on par with them 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 [917]*917million 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 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 800,000 fish; and the Centra-[918]*918lia 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.
1970 Pa. Legislative Journal-House at 2270 (quoting anonymous 1698 description of Penn’s Woods air).
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OPINION
JUSTICE DONOHUE
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 them 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.
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, 623 Pa. 564, 83 A.3d 901 (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:
It is not a historical accident that the Pennsylvania Constitution now places citizens’ environmental rights on par with them 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 [917]*917million 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 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 800,000 fish; and the Centra-[918]*918lia 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.
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. VHI, §§ 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.
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 con[919]*919sequences 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 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” into the Fund “are specifically appropriated to [920]*920the 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. 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 play3 by 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-l). In addition, the leases further pro[921]*921vided for royalties when gas is extracted, with the payment based upon the amount of marketable gas extracted. Id. The Mar-cellus 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 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 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,5 limits [922]*922the 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 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,7 the DCNR leased approximately 32,000 acres of state forest land in January 2010 (“January 2010 Leases”). Although, prior to the lease sale, the DCNR Secretary expressed significant concern regarding further leasing,8 the 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 [923]*923months 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.
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 Cor-bett 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.l), 2505.11 The monies in the Marcellus 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 de[924]*924creased 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 Mar-cellus Shale leasing “is necessary to obtain the 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-EQL0), 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).
Distinguished Professor John C. Dern-bach of the Widener University Law School Environmental Law and Sustainability Center14 recently summarized the [925]*925significance 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)).
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 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, 598 Pa. 16, 953 A.2d 514, 521 (2008) (citations omitted).16
[926]*926The 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 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 McCaf-fery, wrote expansively on Section 27. Justice Baer concurred on a wholly different ground, while Chief Justice Saylor and former-justice 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 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, 11 Pa.Cmwlth. 14, 312 A.2d 86 (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 “lacking] foundation” in Section 27. PEDF, 108 A.3d at 159 (citing Robinson Twp., 83 A.3d at 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 rele[927]*927vant 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 three-part 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, 468 Pa. 226, 361 A.2d 263, 273 (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. 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 oñ 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 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
[928]*928The 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, 517 Pa. 65, 534 A.2d 760 (1987) (holding legislative acts requiring counties to fund the local court system to be unconstitutional) and Commonwealth ex rel. Carroll v. Tate, 442 Pa. 45, 274 A.2d 193 (1971) (addressing court funding in Philadelphia)), at 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. 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 922-24, 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 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
[929]*929IV. 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, 623 Pa. 564, 83 A.3d 901 (2013) (plurality);
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 cross-motions 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, 588 Pa. 539, 905 A.2d 918, 939 (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., 577 Pa. 138, 842 A.2d 919, 925 (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; [930]*930and the contemporaneous legislative history.” Robinson Twp., 83 A.3d at 945 (citing 1 Pa.C.S. §§ 1921, 1922).
■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 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 Ro bin-son 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 [931]*931people 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 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 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 [932]*932trustee, 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, 365 Pa. 149, 74 A.2d 123, 124 (1950) (providing that "words having a precise and well-settled legal meaning must be 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, 484 Pa. 77, 398 A.2d 951, 953 (1979) (quoting 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., 220 Pa. 535, 69 A. 1037, 1038 (1908); see also In re Hartje’s Estate, 345 Pa. 570, 28 A.2d 908, 910 (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 [933]*933him 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, 487 Pa. 379, 409 A.2d 401, 402 (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 legislative action to protect the environment. Id. at 958 (citing Geer v. Connecticut, 161 U.S. 519, 534, 16 S.Ct. 600, 40 L.Ed. 793 (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., 227 Pa. 29, 75 A. 986, 988 (1910); In re Sparks’ Estate, 328 Pa. 384, 196 A. 48, 57 (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 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, 263 Pa. 78, 106 A. 189, 190 (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
[934]*934Second, 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 [935]*935phrase “for the benefit of all the people” is unambiguous 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, 410 Pa. 618, 190 A.2d 105, 109 (1963) (explaining that when “the relation of trustee and [beneficiary) has once been established as to certain 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, 459 Pa. 201, 328 A.2d 158, 163 (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 [936]*936amounts other than for the purchase of the oil and gas extracted, it is up to the Commonwealth Court, in the first 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 ami-cus, 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 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.
[937]*937Although 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 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 Tom-ship 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 pri- or 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 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 [938]*938maintenance 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 trusr tee duties.
We hold, therefore, that sections 1602-1? 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 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.
[939]*939Based 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 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 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.
[940]*940Justice 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.
Related
Cite This Page — Counsel Stack
161 A.3d 911, 47 Envtl. L. Rep. (Envtl. Law Inst.) 20081, 2017 WL 2645417, 84 ERC (BNA) 1838, 2017 Pa. LEXIS 1393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pennsylvania-environmental-defense-foundation-v-commonwealth-pa-2017.