The General Assembly is in recess until the House returns on November 9th. The Senate plans to monitor the House activity and may return to session on the 16th depending on actions taken by the House. The primary focus of the time being spent is on finishing the final piece of the budget, the addition of table games at casinos.
This session of the General Assembly, which began in January, has yielded 28 plus pieces of legislation that are related to natural gas production in a variety of ways. Legislation authorizing the sale of state lands and distributing the revenue and legislation establishing a Coal Bed Methane Review Board have passed one of the two chambers. SB 490 (M.J. White) has passed the Senate and has been in the House Environmental Resources & Energy Committee since late March. The bill distributes a total of $174 million dollars with $1 million to County Conservation Districts, $3.5 million for the nutrient credit trading program, $1 million for the Natural Heritage Program and Natural Heritage Inventory, $500k to the Game Commission and $500k to the Fish Commission. To read the bill, click here. Some of the provisions of the bill were enacted as part of the budget.
SB 275 (D. White) has passed the Senate and also was referred to the House Environmental Resources & Energy Committee. To read the bill, click here. Other legislation that has seen or is scheduled to see activity deals with disclosure, rollback taxes related to the Clean and Green Law, and pipeline safety. On the topic of disclosure, SB 297 (Yaw) has been has been passed by the Senate and awaits action on the House floor. The bill; requires oil and gas well operators to submit a semi-annual report in addition to the existing annual report, removes the five-year confidentiality provision of oil and gas production reports and requires the DEP to post reports on their website. An amendment adopted in committee; reinstates the requirement for non-Marcellus shale well operators to only report annually, specifies that DEP must only publish Marcellus Shale well production reports online and directs DEP to use funds from permitting fees to pay for costs incurred under this legislation. To read the bill, click here.
A bill in each chamber addressing Clean and Green and rollback taxes has seen action. The Clean and Green program is a state program designed to preserve agricultural and forest land. The purpose of the law is to provide a real estate tax benefit to owners of agricultural or forest land by taxing that land on the basis of its “use value” rather than its market value. This act provides preferential assessment to any individuals who agree to maintain their land solely devoted to agricultural use, agricultural reserve, or forest reserve use.
With the onset of activity in the Marcellus Play, there is widespread concern that the provision that mandates rollback taxes on the entire parcel should only be applied to the piece of the parcel where drilling or other activity occurs. HB 1394 (Houghton) has been passed by the House and is in the Senate Agriculture and Rural Affairs Committee. The bill deals with oil and gas and coal bed methane. It was introduced by the sponsor at the request of the Administration. To read the bill click here. To read a summary, click here.
The Committee recently held a hearing on the bill. Testimony and dialogue on the bill is posted at www.marcellusminutes.com. The Senate Agriculture and Rural Affairs Committee has reported Senator Gene Yaw’s SB 298. The bill also addresses concerns about adverse impacts on Pennsylvania Clean & Green and specifies that the owner of land under the Farmland & Forest Assessment Act that is subject to a preferential assessment may split of and lease land without rollback taxes being imposed on the entire tract. To see the co-sponsorship memo click here. To see the legislation click here. The bill is in the Senate Appropriations Committee. In the area of safety, HB 1128 sponsored by Consumer Affairs Committee Chairman Joe Preston made its way to the House Floor. The bill increases gas pipeline violations from $10,000 to $100,000 per day and raises the cap on the fines from 500,000 to $1,000,000. To read the bill, click here. An amendment was filed to the bill that would establish the Mid-Atlantic Area Natural Gas Compact allowing for intrastate compacts to regulate natural gas lines. To read the amendment, click here. This amendment can be attributed to the Williams Transco eminent domain activity in Chester County. The amendment was withdrawn and the bill was passed by the House. The bill is now in the Senate Consumer Protection & Professional Licensure Committee. During the back and forth of the budget battle the House put a severance tax, the provisions of HB 1489, in the tax code bill only to see the Senate strip it out. The bill went to the Governor without that tax. One of the last pieces of the budget was the proposal to lease additional state lands for drilling. The authority to lease the lands remains with DCNR Secretary John Quigley. DCNR will use seismic testing and auctions to lease the land. The bill requires leasing to provide at least $60 million from the Oil and Gas Lease Fund to the General Fund for 09-10. It also transfers $143 million from existing money in the Oil and Gas Lease Fund to the General Fund. It authorizes DCNR to use up to $50 million from royalty income for conservation purposes. DCNR shall give preference to the operation and maintenance of state parks and forests from this money. No additional money may be spent until appropriated by the General Assembly. It should also be noted that the budget balance sheets anticipate $180 million in additional new leasing for the General Fund for FY 10-11.