Central Penn Business Journal
Wednesday’s passage of Marcellus Shale legislation marks a big win for Pennsylvania’s economy, state House Republicans said.
“This legislation will ensure the continuation of job creation in the Commonwealth’s biggest growth industry,” York County Reps. Seth Grove, Ron Miller, Scott Perry, Stan Saylor and Will Tallman said in a joint statement following the vote on House Bill 1950.
Marcellus activity already has brought jobs to the midstate, including engineering and manufacturing work, the statement noted.
The bill authorizes an impact fee on Marcellus Shale drillers that varies based on natural gas prices; revises environmental and other regulations for deep-well drilling operations; and overrides municipalities’ power to enact their own ordinances on the industry.
The impact fee will generate an estimated $94 million retroactively for 2011, $155 million in 2012, and could bring in $295 million by 2015, according to the bill’s sponsors.
The legislation provides $20 million over three years for grants to help organizations convert vehicle fleets to natural gas, said Damian Wachter, executive director of Rep. Saylor’s office.
Such grants were part of House Republicans’ proposed “Marcellus Works” package of incentives introduced last year. The caucus will continue to press for other elements of Marcellus Works, Wachter said.
Gov. Tom Corbett said in a statement he looks forward to signing the bill, which contains 24 of the recommendations of the Marcellus Shale Advisory Commission he convened.
Opponents assailed it as a giveaway to rich energy conglomerates.
“It swindles Pennsylvania’s taxpayers and fails to make huge out-of-state corporations pay their fair share,” state Rep. Mike Hanna, a Clinton County Democrat.
The impact fee works out to an effective rate of 1 percent to 3 percent, according to various estimates. Other natural gas states have effective tax rates of 3.4 percent to 6.1 percent, according to the Pennsylvania Budget and Policy Center.
The fee will be collected at the county level, and counties must vote to impose it. A majority of a county’s municipalities can force a county to impose the fee if it fails to act.
Sixty percent of the fee goes to counties and municipalities affected by drilling. The remaining 40 percent goes to a variety of state environmental and economic development initiatives and to offset the costs of regulating the industry.
“Too little, too late, too complicated,” commented the PBPC’s executive director, Sharon Ward.
The state could have enacted a more robust tax and used it to help shore up the state’s general fund, Ward said. Instead, Corbett is proposing a second year of cuts, including drastic cuts to higher education, she said.
“Cutting colleges and universities is the very worst thing you can do if you want to have a modern, growing economy,” she said.
One clause in the bill requires drillers to provide “maximum practicable contracting opportunities for diverse small businesses,” defined as those owned by women, minorities and veterans.
The Marcellus Shale Coalition industry group has not released a statement on the bill’s passage, though a spokesman said one would be forthcoming shortly.
HB 1950 passed in the state Senate on Tuesday by a vote of 31-19. Wednesday’s House vote was 101-90.
Read more: http://www.centralpennbusiness.com/article/20120209/CPBJ01/120209780