In light of recent budget cuts, state legislators are calling for local governments to have the ability to tax companies harvesting natural resources like Marcellus Shale, a geologic resource that runs through Centre County.
State Rep. Bill DeWeese, D-Fayette, Greene and Washington, proposed House Bill 10 and is now calling for its revival after it failed to pass during the last legislative session.
The bill would allow local municipalities, counties and school districts to make their own decisions on whether or not they want to assess the value of the Marcellus Shale gas and other natural resources in their regions, DeWeese press secretary Tom Andrews said. Currently, there is neither a state nor a local tax on Marcellus Shale after a state tax was removed in 2002.
"House Bill 10 would be an assessment of the property similar to things that are above the ground, not a tax on the amount of gas that comes out," Andrews said.
Gas companies have been drilling the Marcellus Shale, a geologic formation 8,000 feet deep containing natural gas, for the past few years. The shale lies under areas of Pennsylvania, New York, Ohio and West Virginia.
Terry Engelder, Penn State professor of geosciences, calculated that the Marcellus Shale could produce up to several hundred trillion cubic feet of gas that could supply the nation with natural gas for up to 20 years.
Andrews said the benefit of H.B. 10 is that the money assessed at the local level would stay at that level, as compared to a state tax, which would pull the money back to the state level.
"If you have wells in your local area and the local government is assessing the value and the money is staying locally, that allows them to have additional income for their local budgets," Andrews said.
Centre County Board of Commissioners Chairman Jon Eich said many other states have both state and local taxes on natural resources. Generating tax money for local governments should be the highest priority, he said.
"It would be very timely to have additional revenue to offset reduction in state funds," he said.
Local legislators are on board. Tor Michaels, chief of staff for State Rep. Scott Conklin, D-Centre, said the legislator agrees that a tax should be an option for local municipalities.
"We believe that we should at least require the big energy companies to play by the same rules that our homeowners do," Michaels said. "This is using our land -- the people's land -- and obviously we should get some sort of compensation for that use."
H.B. 10 was referred to the House Finance Committee on March 9 and is awaiting action.
Eich said some experts believe Pennsylvania could become the nation's leading exporter of natural gas in 10 years.
"I think the whole nature of natural gas exploration in Pennsylvania is going to be a terrific effect on the economy," he said.
