Legislators in the West Virginia House of Delegates on Monday overwhelmingly passed a bill designed to entice companies to build an ethane cracker in the state by slashing the facility's property taxes for its first 25 years.
HB 4086 -- which was submitted by Gov. Earl Ray Tomblin and was sponsored by House Speaker Rick Thompson (D-Wayne) -- passed by a 93-1 vote and was immediately sent to the Senate for consideration. House members then subsequently voted 91-3 to have the bill take effect on July 1.
Under HB 4086, capital investments specifically made in the natural gas liquids (NGL) extraction industry totaling $2 billion or more would qualify for a 5% property tax rate.
The House of Delegates' Committee on Energy, Industry & Labor, Economic Development & Small Business began vetting HB 4086 on Jan. 17 and approved it two days later. The chamber's Finance Committee then followed suit, passing it Friday.
"I know that was [a] bipartisan [effort]," Del. Thomas Campbell (D-Greenbrier), vice chairman of the Finance Committee, said in an interview with West Virginia Public Broadcasting (WVPB) Tuesday. Campbell, a member of the Joint Select Committee on Marcellus Shale, added, "I think everybody went into it with the spirit of 'let's do what's best for West Virginia.' So I'm sure the Senate will do what's best for West Virginia, [and ultimately pass HB 4086]."
In a separate interview with WVPB, Thompson added that the bill "gives [companies] some relief on our personal property taxes. We believe our real estate taxes our lower. We believe it puts us in a better position. The governor...wants this tool...as he negotiates with these companies."
HB 4086 and a companion bill, SB 206, were both submitted by Tomblin on Jan. 17. The governor mentioned both pieces of legislation during his state of the state address on Jan. 11, when he vowed to do everything in his power to attract an ethane cracker to West Virginia (see Shale Daily, Jan. 17).
West Virginia is in direct competition with two of its neighbors -- Ohio and Pennsylvania -- for an ethane cracker, a multi-billion dollar, multi-year investment that would create thousands of jobs. Two nonprofits -- Renewable Manufacturing Gateway (RMG) and Aither Chemicals LLC -- said week they would collaborate to build a $750 million facility in one of those states, where Royal Dutch Shell plc is also considering its own 60,000-80,000 b/d facility (see Shale Daily, Jan. 19; Dec. 5, 2011; Sept. 7, 2011).
"Competition between the various Appalachian states is fierce," L. Gil White, a government affairs consultant for the Charleston, WV-based firm Steptoe & Johnson, said Tuesday. He added that "one, and possibly two, cracker facilities will be located in the region to take advantage of the wet gas byproducts being produced in the Marcellus and Utica shale plays."
White, an aide to former Gov. Joe Manchin, predicted that an announcement over where an initial ethane cracker would be built in the region "is anticipated in the coming weeks."
Meanwhile, hundreds of West Virginians are petitioning companies to build a cracker in the Kanawha Valley (see Shale Daily, Dec. 15, 2011), while state officials have lobbied hard for the Mountain State (see Shale Daily, Aug. 26, 2011; July 18, 2011; May 6, 2011; Dec. 23, 2010).