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January 3, 2012 | By | Posted in Legislature

UPDATED: PA Senate leader: Target for new shale bill by February

No names for conference committee yet
 
By Eric Boehm | PA Independent
 
HARRISBURG — The leader of the Pennsylvania Senate is setting another deadline for passage of a Marcellus shale impact fee package.

Senate President Joseph Scarnati, R-Jefferson, said he wants the state House and Senate to decide on a Marcellus shale drilling policy, before Gov. Tom Corbett gives his budget address in early February. 
 
With the Legislature set to return Jan. 17, Republicans in the General Assembly and Corbett have about two weeks to reach an agreement.
 
“I would strongly recommend that we have this wrapped up … before budget negotiations start,” Scarnati said Tuesday. “I don’t think that there is any reason that we should hold back any longer. We know what our differences are, and there is going to have to be movement on both sides.”
 
Scarnati has been leading the charge on the natural gas drilling package in the state Senate.
 
While the shale bills have various components, the biggest sticking points are the amount and duration of the natural gas drilling fee and the government entity designated to collect it, Scarnati said.
 
The Senate wants to impose a $360,000 per-well fee over 20 years, while the state House passed a bill to impose a $160,000 per-well fee over 10 years. The state would collect the revenue in the Senate plan, but counties that host natural gas drilling would authorize and collect the fee in the House plan.
 
“I can tell you, the business community and the investor community around this state, they want uniformity across the state of some sort, no matter what the issue is,” Scarnati said. “A hodgepodge of tax collection is not conducive for good investment.”
 
Senate Democrats unanimously opposed the Senate GOP shale bill when it was voted out of the
chamber late last year, citing concerns over the fee amount, the lack of revenue distribution to statewide environmental programs and inadequate watersheds and wells protections.
 
On Tuesday, Senate Minority Leader Jay Costa, D-Allegheny, said Democrats were hoping to reach a consensus on the impact fee bills through a conference committee.
 
Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny, said progress had been made, but the collection of the fee revenue was a remaining sticking point.
 
Corbett supports the county-level fee and has expressed concerns about bringing the money from the fee to the state Capitol, where it could be divided among various special interests not related to drilling.
 
Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group,in an email statement Tuesday said "predictable and uniform state-based standards and a competitively structured impact fee that encourages development are key to realizing the Marcellus’ tremendous potential for all Pennsylvanians."
 
If history is any guide, Scarnati’s call for the impact fee legislation to be completed in the next month should be taken with a grain of salt.
 
In June 2010, lawmakers included a clause in the state budget announcing their intention to pass a natural gas tax before the end of the year after last-minute negotiations on the tax threatened to stall the passage of the state budget.
 
By the end of 2010, no legislation had made it to the governor's desk though the state House did pass a severance tax bill. A severance tax is based on a flat rate that is applied to the value of the resources removed.
 
In the summer of 2011, Scarnati said the Marcellus shale fee was his No. 1 priority for the fall legislative session.
 
By the end of 2011, nothing had been passed though each chamber approved a impact fee bill separately.
 
After House and Senate Republicans failed to work out a deal over the cost of the fee or who would collect it, the two bills appeared to be headed for a conference committee, tentatively scheduled for mid-January.
 
The committee would include three members from each chamber, with majority Republicans getting four of the six spots.
 
Scarnati said he “has not given a lot of thought” about which two Senate Republicans might be on the six-member panel. 
 
Costa also declined to name names, but indicated state Sen. John Yudichak, D-Luzerne, was a front-runner.
 
Yudichak, in just his first term in the state Senate after 12 years in the state House, has been the Senate Democrats' point person on the natural gas issue.
 
Aside from the passage of a Marcellus shale bill, the focus of 2012 must be on creating jobs and improving Pennsylvania's economy, Scarnati said.
 
“If legislators are ever going to gain respect and trust of the taxpayer, it will be done by example of what we have done, not what we have said we will do,” he said to the state Senate moments after being unanimously re-elected as Senate president for another year.
 
Costa said jobs would be at the center of the Senate Democrats’ plan for the upcoming legislative session as well.
 
 “We believe that jobs and the economy are critical issues that need to be addressed by this chamber, but by the administration also,” Costa said.
 
This story has been updated to correct the 2010 passage of a severance tax by the state House.
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