PA Republicans Introduce Marcellus Tax Credits to Create Jobs

Pennsylvania Republicans want the burgeoning Marcellus Shale industry in the state to create even more jobs for Pennsylvanians–so they’ve introduced legislation that will grant tax credits (not assistance, just a break on high taxes) to companies that do things like convert fleets of vehicles from running on gasoline to running on CNG (compressed natural gas). The amounts add up to a few million dollars, a fly speck in the overall budget, but of course it makes the state’s Democrats apoplectic:

Bills to provide millions of dollars of state tax credits to develop natural gas markets were approved by a House committee Tuesday after a debate over favoritism to Marcellus Shale companies and job creation strategies. The bills advanced by the Finance Committee are part of the "Marcellus Works" package to develop more uses in Pennsylvania for in-state natural gas production, a top priority of House Republicans.

One measure would provide $25 million annually in tax credits to help businesses convert fleets of vehicles that use gasoline and diesel to compressed natural gas. Another would provide $5 million annually in tax credits to develop designated natural gas corridors with fueling stations along the interstates, including Interstates 81 and 80. A provision in both bills giving the chairman of the Marcellus Shale Coalition, an industry trade group, and executive director of the Associated Petroleum Industries of Pennsylvania, seats on advisory committees to make recommendations among candidates for tax credits to state officials drew considerable debate. Rep. Rick Mirabito, D-83, Williamsport, suggested having industry representatives give recommendations would create conflict-of-interest issues with both the public and among businesses seeking tax credits.

The MSC and APIP representatives will provide needed expertise in wading through applications, but the final decision would be up to a cabinet secretary, said House Majority Whip Stan Saylor, R-94, Red Lion, sponsor of the fleet conversion bill.

"We want money to go to companies that have a business plan," he said. Rep. Phyllis Mundy, D-120, Kingston, ranking Democrat on the committee, criticized the bills’ approach of subsidizing what she called a wealthy industry.

"It would be one thing if we had a (state) severance tax, but we don’t," she said. "That’s enough of a slap in the face."

Mr. Saylor said the bills aim to create jobs.

"It is time to use our resources to benefit citizens," he said.

Tax credits will provide the impetus needed for companies to build natural gas fueling stations, said Rep. Gordon Denlinger, R-99, Ephrata, sponsor of the gas corridor bill.

The estimated cost of converting a gasoline station to a natural gas station is $2 million while the cost of building a new station is $6 million, he said.

Ms. Mundy said the fueling station tax credit would amount to a corporate giveaway to giant oil companies like ExxonMobil.

The Environmental Resources and Energy Committee is scheduled to consider other bills in the package today.*

    *Scranton (PA) The Times-Tribune (Apr 10, 2013) – House panel approves Marcellus tax credits