Posts Tagged ‘Gene Yaw’

Legislators want adequate tax share for municipalities fiscally hit by gas drilling.

STEVE MOCARSKY smocarsky@timesleader.com

Much legislation has been written recently to address concerns about natural gas drilling into Pennsylvania’s Marcellus Shale, but little has been signed into law.

And one issue, it seems has been overshadowing and holding up action on all the others: a state severance tax on natural gas extraction.

Several bills addressing a severance tax have been put forward by state legislators, and Gov. Ed Rendell also has proposed implementing such a tax.

“The biggest concern for legislators is that an adequate portion of a severance tax would come back to local governments that are financially impacted by drilling activities,” said Adam Pankake, representing Sen. Gene Yaw, a Republican from Lycoming County and one of the few legislators to have a Marcellus-related bill he sponsored signed into law.

Senate Bill 325, sponsored by Rep. Anthony Melio, D-Levittown, didn’t muster much support in the House because it authorized an 8-percent severance tax, all of which would go to the state’s General Fund, Pankake said.

State Sen. Raphael Musto, D-Pittston Township, proposed a severance tax plan in Senate Bill 905 that mirrors Rendell’s plan, directing all proceeds of a 5-percent tax and a 4.7-cent charge on every 1,000 cubic feet of gas extracted into the General Fund.

A bill by state Rep. Bud George, chairman of the House Environmental Resources and Energy Committee, would send only 60 percent of a 5-percent tax to the General Fund.

The remainder would be divvied up, sending 15 percent to the Environmental Stewardship Fund; 9 percent split evenly between counties and municipalities in which wells are drilled; 5 percent to the Liquid Fuels Tax Fund; 4 percent split evenly between the Game and Fish and Boat commissions; 4 percent to the Hazardous Sites Cleanup Fund; and 3 percent to a program to help low-income residents with heating bills.

A bill sponsored by Sen. Andrew Dinniman, D-West Chester, would send half of a 5-percent severance tax to the General Fund. Another 44 percent would be split evenly between the Environmental Stewardship Fund and municipalities in which a well was drilled; the remaining 6 percent would be split between the Game and Fish and Boat commissions.

Legislators are also considering severance tax models used in other states, such as a phase-in approach used in Arkansas, Pankake said.

Marcellus-drilling industry advocates describe it as a fledgling industry that a severance tax could cripple because of the financial resources needed to build a pipeline infrastructure where none previously existed.

Matthew Maciorski, spokesman for state Rep. George, D-Clearfield County, said severance tax legislative proposals have been “coming in fast and furious. Everyone has their own take on how the revenue should be divided.”

Maciorski said Marcellus Shale issues are “very complicated and integral to the whole budget debate.”

Some legislators use some pieces of legislation as bargaining chips in negotiations with the gas industry. For example, the industry doesn’t support a severance tax, but the industry is pushing for a law authorizing forced pooling – compelling landowners who don’t wish to lease their mineral rights to be part of a drilling unit with others that do.

“Sometimes there are alliances that have to be built. &hellip Sometimes we rely on members to tell us when it’s time to strike. It gets complicated going between the House and the Senate. Members want to have all their ducks in a row to prevent there being (additional delays) in the process,” Maciorski said.

Bob Kassoway, director of the House Finance Committee for the Democratic Caucus, said any severance tax bill will likely be passed as part of the 2010-11 state budget, and it’s likely that little if any other Marcellus-related legislation will be passed until that happens.

Sen. Yaw was pleased that Act 15 was signed into law on March 22. Based on his Senate Bill 297, it repeals five-year confidentiality for gas production financial records and requires well operators to submit semi-annual reports to the state. It also requires the state Department of Environmental Protection to post well data online.

But while the debate continues over the severance tax, legislation on issues important to lease holders, to residents with environmental concerns and to members of the gas industry continue to languish in the House or Senate or their committees.

In addition to severance tax legislation, there are at least four Marcellus-related Senate bills and at least 17 House bills pending.

For example, legislators are holding off a vote on Rep. Bill DeWeese’s House Bill 10, which would enable counties to assess value to gas and oil for taxation purposes, likely because it hasn’t been decided what – if any – percentage of a severance tax will go to counties.

Introduced 16 months ago, House Bill 297 remains in the House Transportation Committee. Sponsored by Rep. Mark Longietti, D-Hermitage, it would require the state Department of Transportation to publish by the end of the year a revised schedule of bonding amounts for roads damaged by heavy truck traffic and to update the amount at least every three years.

PennDOT last revised the schedule in 1978, Longietti said, leaving officials in municipalities damaged by drilling trucks with insufficient guaranteed funding to repair their roads.

Rep. George’s House Bill 2213, which increases bonding amounts for wells, boosts the number of required well inspections by DEP and adds protections for water supplies, has gained much local support. But after an amendment in the House Environmental Resources and Energy Committee in May, it was re-committed to the House Appropriations Committee.

Sen. Lisa Baker, R-Lehman Township, announced in May she is working on a series of bills to provide additional protections to drinking water sources that could be harmed by drilling.

State Rep. Karen Boback, R-Harveys Lake, issued a statement last week stating that she also was working to develop legislation to protect drinking water from gas drilling practices.

Painfully aware of the slow legislative pace in Harrisburg, Boback is urging the governor to issue an executive order implementing additional protective rules before more well-drilling permits can be issued.

Copyright: Times Leader

Bill would have rollback taxes assessed only on land impacted by wellhead permanently.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Luzerne County Assessor’s Office Director Tony Alu still doesn’t know how Marcellus Shale development on land with “Clean and Green” designation will affect the land’s tax status.

“We don’t have a clear-cut plan yet. … I’m turning over every stone to get as much information as possible. We won’t be doing anything until I’m sure what our options are,” Alu said Monday.

Clean and Green is a program authorized by state law that allows land devoted to agricultural or forest use to be assessed at a value for that use rather than at fair market value.

The intent of the program, which is administered through county government, is to encourage property owners to retain their land in agricultural, open-space or forest-land use by providing real estate tax relief.

Property owners benefit through lower taxes as long as their land isn’t used for housing developments or other uses inconsistent with agricultural production, open-space or forest-land use.

If a property owner decided to use the land for a purpose inconsistent with the program, the landowner would have to pay “rollback taxes” – the difference between fair market value and use value of the land – for as many years as the property had been designated Clean and Green, up to a maximum of seven years.

Although it’s a state-authorized program, with maximum use values set annually for each county by the Department of Agriculture’s Bureau of Farmland Preservation, the bureau offers no guidance on how drilling for natural gas on a Clean and Green parcel would affect the tax status.

“The (state Farmland and Forest Land Assessment) Act is silent in that regard, so it’s left up to each individual county how to address it,” said bureau director Doug Wolfgang.

However, Wolfgang said, in March 2009, state Sen. Gene Yaw, R-Loyalsock Township, introduced a bill that would amend the act, allowing for natural gas drilling on Clean and Green land, with rollback taxes being assessed only on the portion of land that would be permanently impacted by a wellhead. State Sen. Lisa Baker, R-Lehman Township, was a co-sponsor of that bill.

Yaw represents Union and Sullivan counties and parts of Susquehanna, Bradford and Lycoming counties, which together boasted a total of about 200 natural gas wells by the end of last year.

The bill won Senate approval in February and is before the House for consideration.

Yaw has said the bill would provide counties across the state with “a consistent interpretation” to follow and would “help to prevent differing opinions on how many acres of roll-back taxes should be levied on landowners who have leased for natural gas development.”

He has said farmers and landowners need the bill to become law “so that there isn’t any confusion on how the Clean and Green Program operates.”

The bill also would exempt land with underground transmission or gathering lines from roll-back taxes and would allow for one lease for temporary pipe storage facilities for two years. Each property would have to be restored to its original use.

Regardless of whether the bill becomes law, Lake Township Supervisor Amy Salansky said neither she nor her husband, Paul, will have to pay rollback taxes on their Clean and Green land, on which EnCana Oil and Gas USA intends to drill a natural gas well in August. If county officials decide to assess rollback taxes, the lease with EnCana makes the energy company responsible for paying them.

Salansky noted neither she nor her husband own the mineral or gas rights to the land.

The couple bought the land after the owner died so they could farm it, but the owner had willed the mineral and gas rights to his nephew, who retained them in the sale.

The Salanskys are crop farmers, growing oats, corn and hay. They own and work more farmland nearby, Amy Salansky said.

Even if the entire 50-acre parcel is kicked out of the Clean and Green program, Salansky said she would reapply to have the parcel accepted back into the program, minus the 6 acres that would be used for the gas-drilling operations.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader