RALEIGH – Senators perusing a bill that would allow companies to receive fracking permits as early as March 2015 began discussing whether local governments should be allowed to charge impact fees to pay for infrastructure costs related to the practice.
The Senate Finance Committee Wednesday gave its blessing to Senate Bill 76. The committee’s role was to consider the tax portions of the bill, not to discuss the merits of fracking. The measure now goes to the Senate Commerce Committee.
Fracking refers to hydraulic fracturing, a procedure used to mine energy trapped in shale rock.
Impact fees are charges or taxes levied on a development to help pay for any added cost local governments incur as a result of that development.
Sen. Josh Stein, D-Wake, brought up the idea of allowing local governments to assess impact fees to companies mining for natural gas in the state.
“We have the issue where the localities that are having all of this activity with all the trucks and all the influx of people from out of state living in trailers — I mean they need to be able to deal with the impact in their local communities,” Stein said.
Sen. Buck Newton, R-Wilson, the sponsor of the bill, said he felt it was premature to add impact fees to the legislation.
“What we don’t want is to have patchwork impact fees across the state,” Newton said. “And we certainly don’t want those impact fees to be used as backdoor ways to try to block the development of these resources.”
Newton continued, “As far as how we deal with the impact to local communities, they will of course get revenues from these efforts at development. There will be a lot of economic development involved in it.”
The fracking bill that passed last year directs the state Mining and Energy Commission to study impact fees in conjunction with the N.C. League of Municipalities, the N.C. Association of County Commissioners, the N.C. Department of Environment and Natural Resources, and the N.C. Department of Transportation.
The bill would put in place a floating tax rate for natural gas, should companies using the fracking process find the energy resource in the state.
Newton said S.B. 76 intends to send a signal that the state wants companies to come to North Carolina.
“We have abundant natural resources here in North Carolina,” Newton said. “Our country needs the energy, and North Carolina needs the jobs. We need the economic development. And we’re talking about the future of this state.”
Barry Smith (@Barry_Smith) is an associate editor of Carolina Journal.