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West Virginia Senate Bill Would Eliminate Some Taxes for Natural Gas Producers

As reported by the Charleston Gazette-Mail  and Natural Gas Intelligence, the West Virginia Senate recently passed SB 419, which, if enacted, would eliminate certain volumetric fees that natural gas producers pay in addition to the state’s severance tax.  The tax was implemented as part of the Workers’ Compensation Debt Reduction Act of 2005 in order to generate revenue to pay state workers’ compensation debts.  It imposes a 4.7 cent per Mcf fee on natural gas production and a 56 cent per ton fee on coal producers.  Although the fees generated $122 million for the state in fiscal year 2015, a spokesperson from Governor Earl Ray Tomblin’s office stated that the tax was only intended to be in force until the workers’ compensation debts were paid off.  These debts have just about been repaid, more than 10 years ahead of schedule, due in large part to increased production from the Marcellus Shale in recent years.  SB 419 was introduced on January 28, was unanimously passed by the Senate last Thursday and is now before the House of Delegates.