CHARLESTON -
Members of the West Virginia Legislature have fast-tracked a bill that may help attract an ethane cracker plant to West Virginia.
Today, the Senate unanimously approved a property tax credit for any business that spends at least $2 billion to build an ethane cracker plant in West Virginia. Instead of taxing the property at 5 percent of it is
original value for 10 years, the bill extends the salvage value tax
treatment of 5 percent for 25 years.
A Senate subcommittee passed a version of the bill allowing the tax credit on Jan. 24, then forwarded it on to the full body, which suspended the rules requiring bills be read on three separate days. The goal was to quickly pass the bill, known as House Bill 4086, so it gives West Virginia one more tool to compete against other states for the much-desired plant.
The bill now goes to Gov. Earl Ray Tomblin for his signature. Members of the House of Delegates passed the bill Jan. 23.
"This is the cracker bill," Sen. Roman Prezioso, D-Marion, chairman of the Senate Finance Committee said during the Senate floor session Wednesday morning. "It's probably one of the most important bills we'll consider during this legislative session.
"We're going to move this bill through as quickly as possible to give the governor the opportunity to negotiate the possibility of one or two cracker plants in the state of West Virginia."
Tomblin issued a statement shortly after the bill passed.
"It is through bipartisan support, like this and that of
last month's historic Horizontal Well Act Relating to Marcellus Shale,
that we show potential investors West Virginia is ready and willing to
take the development of our vast natural gas reserves to the next level
in order to help address our country's energy needs and expand our
manufacturing sector," Tomblin said in the news release. "This tax relief bill, I believe, showcases our State's
commitment to being a great business partner today and long into the
future."
State Commerce Secretary Keith Burdette was in the Senate Finance Committee meeting Jan. 24 to present his department's annual budget after committee members moved the bill.
Burdette said West Virginia is the only state that set up regulations for Marcellus shale drilling, and will soon be the first state to set up a tax break. Burdette thanked senators for the movement on the bill.
"We believe very strongly that we are very much in the thick of this," Burdette said. "Make no mistake about it, the Legislature's prompt attention and action has gained us a significant amount of attention here and around the country."
Burdette said his office has worked closely with both Shell Oil and an unnamed company in the search for property to locate an ethane cracker plant.
An ethane cracker plant converts ethane, a natural gas component, to ethylene, which is used to make plastics and as a building block for chemicals.
"We have provided basic information about each region that is under consideration," Burdette said. "We have continued to work through this process on a specific, case-by-case basis.
"Each company has different needs, so there are somewhat different strategies as to how to approach this development."
Burdette said the tax credit will be "very, very helpful" in the process of attracting a cracker plant.
"We also believe probably the largest remaining issue, which may or may not be something that's totally clear to us right now, may really evolve down to site-related issues," Burdette said. "Not policy issues, but how the sites get configured to meet the specific needs of the developer."
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