Rep. Jesse White (D-Washington) announced the introduction of House Bill 2493 to attract the global gas company Royal Dutch Shell to Pennsylvania, but without the use of any taxpayer dollars.

House Bill 2493, would impose a small surtax on the production of natural gas for a new "Energy Employment Legacy Fund." That fund would pay for tax incentives to industries that use ethane in manufacturing processes, including Gov. Corbett's controversial $1.6 billion tax credit proposal for Royal Dutch Shell.

"This revenue-neutral legislation is a perfect way to demonstrate that we strongly support the concept of the ethane cracker and its impact on job creation while adopting a fiscally responsible approach that avoids passing $1.6 billion in debt onto Pennsylvania taxpayers," Rep. White said. "The taxpayers have already created a tax-free Keystone Opportunity Zone for the proposed site of that ethane cracker, so the private sector producers who will greatly benefit from an increased customer base and a shorter supply chain should also do their part."

Rep. White said his measure would provide $66 million annually over 25 years. The surtax would be applied to all Marcellus Shale natural gas producers who currently pay the per-well fee under Act 13 of 2012. The tax credit would be available to any manufacturer that purchases natural gas containing ethane as raw material for production.

To calculate the surtax, the allocated amount of $66 million would be divided by the number of producing wells. That sum would then be collected from each natural gas producer to which this applies.

According to the Department of Environmental Protection, 5,593 wells have been spud since 2000 and are subject to the natural gas impact fee under Act 13. Based upon the calculation listed above, a surtax amount of $11,800.46 would be placed on each of those 5,593 wells. The effective tax rate on the production of natural gas under Act 13 is about 1 percent; the added surtax would keep that overall effective rate below 1.25 percent.

"We should not be socializing costs while privatizing profits," Rep. White added. "Pennsylvanians need to know there is a real alternative that promotes job creation and avoids passing $1.6 billion in crushing debt on future generations. House Bill 2493 is a true public-private partnership and common-sense approach to supporting job creation while being fiscally responsible."

6/25/2012