THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY PASHINSKI, DEASY, BISHOP, BRIGGS, CALTAGIRONE, COHEN, DAVIS, DeLUCA, FABRIZIO, GOODMAN, HALUSKA, HARKINS, HORNAMAN, JOHNSON, JOSEPHS, W. KELLER, KORTZ, MAHONEY, METZGAR, MULLERY, MUNDY, MURPHY, MURT, M. O'BRIEN, PAYTON, PRESTON, SANTARSIERO, K. SMITH, STABACK, WAGNER AND YOUNGBLOOD, MARCH 1, 2011

REFERRED TO COMMITTEE ON COMMERCE, MARCH 1, 2011  

AN ACT

Amending the act of October 6, 1998 (P.L.705, No.92), entitled,

as amended, "An act providing for the creation of keystone

opportunity zones and keystone opportunity expansion zones to

foster economic opportunities in this Commonwealth, to

facilitate economic development, stimulate industrial,

commercial and residential improvements and prevent physical

and infrastructure deterioration of geographic areas within

this Commonwealth; authorizing expenditures; providing tax

exemptions, tax deductions, tax abatements and tax credits;

creating additional obligations of the Commonwealth and local

governmental units; and prescribing powers and duties of

certain State and local departments, agencies and officials," 

providing for applicability of Marcellus Shale drilling

companies.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of October 6, 1998 (P.L.705, No.92),

known as the Keystone Opportunity Zone, Keystone Opportunity

Expansion Zone and Keystone Opportunity Improvement Zone Act, is

amended by adding a section to read:

Section 312.  Applicability of Marcellus Shale drilling

companies.

(a)  Employment requirements.--The following shall apply:

(1)  Any natural gas drilling company shall only receive

tax exemptions, deductions, abatements and credits provided

under this act for year one if its Pennsylvania work force is

comprised of at least 25% residents.

(2)  To be eligible to receive the benefits provided

under this act for year two, the percentage of residents that

comprise the Pennsylvania work force of the natural gas

drilling company must increase to at least 50%.

(3)  To be eligible to receive the benefits provided

under this act for year three and all subsequent years, the

natural gas drilling company's Pennsylvania work force must

be comprised of at least 75% residents.

(b)  Penalties.--The following penalties shall apply:

(1)  A natural gas drilling company that fails to

maintain the resident employment levels for three years after

the receipt of exemptions, deductions, abatements or credits

provided by this act will be required to refund to the

Commonwealth the total amount of exemptions, deductions,

abatements or credits granted.

(2)  The department may waive the penalties outlined in

paragraph (1) if it is determined that a natural gas drilling

company's resident employment levels were not maintained

because of circumstances beyond the company's control. Such

circumstances include natural disasters or unforeseen

industry trends.

(c)  Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Natural gas drilling company."  A person, company or

subsidiary company that engages or continues within this

Commonwealth in the business of severing natural gas for sale,

profit or commercial use. The term does not include a person who

severs natural gas from a storage field.

"Resident."  Any natural person who is considered a resident

under the act of March 4, 1971 (P.L.6, No.2), known as the Tax

Reform Code of 1971.

"Year one."  A one-year period immediately following the

natural gas drilling company's approved application for tax

exemptions, deductions, abatements and credits provided under

this act.

"Year two."  A one-year period immediately following the end

of year one.

"Year three."  A one-year period immediately following the

end of year two.

Section 2.  This act shall take effect in 60 days.