MORGANTOWN — A bill to make a small effort to create an Appalachian Storage Hub for a petrochemical industry boom in West Virginia and the tristate area is on first reading today, Feb. 21, and could pass the House of Delegates early next week.
It cleared House Finance earlier this week.
HB 4421 has two parts: the Natural Gas Liquids Economic Development Act and the Natural Gas Liquids Property Tax Adjustment Act.
As the name suggests, it’s aimed at promoting the transportation – via pipelines – and storage of natural gas liquids in the state by offering property tax credits. The credits apply to the property tax on transportation and storage inventory and equipment and can be applied against personal income or corporate net income tax.
Tax Department attorney Steve Stockton and Deputy Revenue Secretary Mark Muchow told Finance members on Wednesday that the bill, for now, applies to less than 10 companies in the state and would offer credits of less than $1 million.
Delegate Isaac Sponaugle, D-Pendleton, supports the hub but balked at the bill saying $1 million is a mere drop compared to the approximately $10 billion investment a storage hub would require. “It’s ether a waste of money, or if we’re going to do it we have to throw a heck of a lot more at it.”
Proponents argued that this will target small investors for smaller sub-hubs, and it shows a willingness to change state law to encourage the larger hub.
Opponents argued it will cut into general revenue. But proponents such as Delegate Paul Espinosa, R-Jefferson, argued that the investment will lead to economic expansion which would grow the state’s economy and tax coffers.
The bill, he said, aims to make it easier for manufacturers to justify the expense of locating here. “That would be a great thing for the state of West Virginia for that number [future tax credits] to get larger.”
Delegate Mick Bates, D-Raleigh, attempted an amendment that likely would have killed the bill, by expanding it to the coal industry. But the amendment failed.
Delegate Bill Anderson, R-Wood and Energy chair, gave a lengthy speech supporting the bill.
He agrees the initial credits are insignificant, he said. “In order for it to grow, it’s going to require a tremendous amount of investment.” And that investment would employ thousands of West Virginians.
Three is one cracker plant under construction in Pennsylvania, he said, and one planed in Ohio, The area has room for three more in terms of the untapped liquids supply. Without the crackers, and their satellite petrochemical manufacturers, the liquids will go to the Gulf Coast and al the jobs will be there. And people will keep leaving West Virginia.
“If we fail to capture the storage hub,” he said, “I will consider my service in the Legislature to have been a failure.”
He didn’t fail Wednesday. The bill passed in a voice vote and is poised to pass the full House and head to the Senate.
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