Pennsylvania Gov. Ed Rendell signed into law Wednesday legislation reducing the amount of roll-back tax that owners of farmland must pay when leasing land and mineral rights for natural gas development.

SB 298 clarifies the state’s Clean and Green law, which had required the landowners to pay the difference between use value and fair market value and a penalty; the roll-back taxes will now be calculated based only on the reclaimed well sites, rather than the entire property. The revisions were prompted by the development of the Marcellus Shale and its effect on the state’s energy industry, according to the bill’s sponsor.

The decades-old Clean and Green law was originally passed to define how land devoted to agricultural use, agricultural reserve use or forest reserve use would be assessed for tax purposes. The act allows farmland to receive preferential assessment when it is being used for the development and use of alternative energy, including solar photovoltaic, solar thermal, wind power, low-impact hydropower, geothermal energy, biologically derived methane gas, fuel cells, biomass energy and coal mine methane, as long as more than half of the energy generated is used for agriculture.

SB 298 “is a critical update to how our farmland is to be assessed now and in the future,” said the bill’s sponsor, state Sen. Gene Yaw (R-Bradford). “The development of the Marcellus Shale has changed how everything is looked at, as it is a total transition to what used to be ‘business as usual’ on all levels of government. All laws of this nature need to be scrutinized to see if they are applicable in today’s world in keeping with the original spirit of the law and then changed if necessary.”

The law will restrict roll-back tax to portions of land filed under well restoration reports and land which is incapable of being immediately reclaimed for agricultural use, agricultural reserve or forest reserve, Yaw said.

The revisions included in SB 298, which were approved 190-1 in Pennsylvania’s House and unanimously in the Senate, “are a win-win for our agriculture community and for responsible Marcellus development in the commonwealth,” according to Marcellus Shale Coalition President Kathryn Klaber.

SB 298 will go into effect Dec. 26.