This article originally provided by The Charleston Gazette

March 12, 2011

Bill to regulate Marcellus Shale drilling dies

CHARLESTON, W.Va. -- Angry words flew at the Capitol on Saturday night as lawmakers ended their 60-day session without passing anything to regulate Marcellus Shale natural gas drilling.

Members of the House of Delegates and Senate blamed each other for the demise of legislation (SB424) that would have addressed environmental regulations, permit fees, protections for property owners and other issues related to development of one of the world's richest natural gas basins.

Senators had passed the bill earlier this month, but the House -- which favored stronger protections for the environment and landowners -- never voted on it. Among other things, the two sides disagreed on notice to property owners, the distances operators can drill from West Virginians' homes and water wells, and the hiring of gas well inspectors.

In a floor speech, Sen. Mike Green, D-Raleigh, called the House's failure to act on the bill "shameful."

"It makes us wonder what the commitment of the House leadership was to get this job done," said Green, who plans to ask state Senate President Earl Ray Tomblin, who is acting as governor, to adjust his budget proposal so the state can hire more inspectors.

But House Judiciary Chairman Tim Miley, D-Harrison, said the Senate was not willing to compromise.

In a meeting Saturday afternoon, Miley said, Green "resorted to talking about how we can't do anything because it's too late, and expressed no interest in trying to work out the differences."

Later in the day, Senate staff again told delegates that the Senate wouldn't budge, Miley said.

"I'm embarrassed for him, and it's a shameless attempt to try to cast dispersion on the House of Delegates," Miley said of Green's floor speech.

Lawmakers signed off on a proposal (SB465) to give tax breaks to the natural gas and manufacturing industries in hopes of luring a facility that converts ethane -- a natural gas byproduct -- into ethylene, which is used by chemical manufacturers and is a key ingredient in the plastics industry.

Delegate Bonnie Brown, D-Kanawha, questioned why legislators would approve these incentives without completing Marcellus regulation proposals.

"So we're just giving them a tax break before we even regulate the industry?" she asked.

Late Saturday night, Delegate Mike Manypenny, a Taylor County Democrat who has pushed for stronger drilling regulations, was collecting signatures from colleagues for a letter to the state Department of Environmental Protection. He wants the agency to use emergency powers to issue a moratorium on new Marcellus drilling permits.

Some lawmakers believe there could now be a special session called to craft Marcellus regulations.

DEP Secretary Randy Huffman said he is confident his agency will be able to regulate the drilling without changes in the law, at least for now.

"We don't have a crisis in the short term," he said. As far as the legislation, "I think it was a lot to expect to get so many issues and so many interests dealt with adequately in such a short period of time."

Delegate Sam Cann, who works in the industry and is a former president of the Independent Oil and Gas Association of West Virginia, called the legislative process for the measure "a train wreck." 

"I think they never really defined the problems they wanted to work on," said Cann, a Harrison County Democrat. "And all the interest groups thought they could get the whole boat."

Dave McMahon of the West Virginia Surface Owners' Rights Organization questioned why the bill languished in the final hours of the session Saturday.  

Without new regulations, McMahon said, the state "should not be giving out any more permits than they can review and inspect."

Measures that won both House and Senate approval Saturday, sending them to the acting governor's desk, included:

• Pay raises for judges, and public school and state employees (HB2879). The compromise gives $1,488 raises to teachers, 2 percent increases for state employees and school service personnel, $970 raises for State Police troopers and $835 for Division of Natural Resources officers.

The bill also includes a pay-raise package for judicial salaries, ranging from $7,500 for magistrates to $15,000 for Supreme Court justices. The bill also gives the National Guard's adjutant general a $32,500 raise, to $125,000 a year.

It passed the House 74-24 and passed the Senate 27-6, with Republicans in both houses accounting for the opposing votes.

A revision of the state's Ethics Act, requiring more detailed financial disclosure -- including spousal employee and assets -- for most public officials, high-ranking aides and candidates for public office (HB2464).

A critical provision imposes a "revolving door" prohibition that will prevent elected officials and key aides from returning to the Capitol as lobbyists for one year after leaving public office.

The bill would take effect July 1. It passed both houses without a negative vote: 98-0 in the House and 33-0 in the Senate.

• A bill requiring the state Public Employees Insurance Agency, the Children's Health Insurance Program and health insurance plans for companies with 25 or more employees to provide coverage for children ages 3 to 18 diagnosed with autism spectrum disorder (SB2693). The House concurred on Senate amendments, sending the bill to the governor.

• A repeal of a longtime ban on the sale of liquor on Election Day (HB3100). The prohibition dates back to the 1930s, when unscrupulous politicians in some parts of the state would influence voters with half-pints of liquor.

• Increases in a variety of Division of Motor Vehicle fees to raise about $40 million a year for the state Road Fund, to be dedicated to secondary road maintenance (SB608). Among the changes, vehicle registration fees would go from $28.50 to $45 a year, and costs of drivers' licenses would go from $12.50 for five years, to $32.50. The final passage vote in the Senate was 27-6, with the Senate's Republicans voting no.

• Legislation to let the state run its own health insurance exchange starting in 2014. The bill (SB408) passed the House and Senate along party lines, on 63-34 and 27-6 votes.

The exchange, part of the Obama administration's health-care law, would be a marketplace where people and businesses could buy policies. Supporters say the exchange would lead to better health coverage and lower premiums. This spring, the state will be eligible for $40 to $50 million in federal funds to run the exchange.

Delegates rejected a series of amendments from Delegate Jonathan Miller, R-Berkeley. Among other things, he wanted the state to stop the exchange if the federal law is ruled unconstitutional or is repealed.

"Our constituents do not support the federal act," said Miller, who is an insurance agent. He also sought an amendment to prohibit funding of elective abortions. The amendment was not considered after it was ruled not relative to the bill.

The Senate concurred with House changes to the bill, and passed the legislation 27-6, sending it to the governor's office.

• A plan for distributing financial subsidies to volunteer fire departments around the state to cover workers' compensation premiums that are expected to sharply increase on July 1, when BrickStreet Mutual no longer is required to write coverage for the VFDs (HB3271). The budget bill includes $2.5 million for the subsidies. 

• A bill to require the state Athletic Commission to draft rules for regulating mixed martial arts events (HB2562). The bill would legalize the controversial full-contact fighting, pending the Legislature's approval of the regulations. It passed the Senate 23-10, with several senators opposing it because of health and safety issues, including Sen. Ron Stollings, D-Boone, a physician. It passed the House 71-26.

• Lifetime hunting and fishing licenses for residents older than 65 (HB2845). Currently, senior West Virginians don't need to have hunting or fishing licenses, but advocates believe the $25 one-time fee, along with federal matching funds, would provide as much as $500,000 a year for the Division of Natural Resources. It passed the Senate 28-5, and the House 66-32.

• A plan to allow the Unemployment Compensation Fund to borrow up to $20 million to keep the fund from going insolvent at any point in the year.

Among the legislation lost Saturday was a bill to allow coal-producing counties to keep an additional 5 percent of coal severance tax revenues for economic development (SB242). House and Senate conferees met up to a 9 p.m. deadline for filing conference committee reports but could not reach an agreement.

The Senate bill had stricter oversight, requiring the state Development Office to administer the funds, which would have totaled about $4 million a year, while the House proposal gave county commissions more control over how the funds would be spent.

A measure (HB2161) to create the Herbert Henderson Office of Minority Affairs also did not survive. The Senate Finance Committee had stripped funding from the proposal and also removed provisions allowing for an executive director for the office.

Legislation to fund a pilot program to publicly finance Supreme Court campaigns in 2012 was killed when the Senate Finance Committee voted down a proposal (HB2732) that would have raised money from the state's unclaimed property trust fund, and imposed new court fees and fees for attorneys.

Reach Alison Knezevich at alis...@wvgazette.com or 304-348-1240. Reach Phil Kabler at ph...@wvgazette.com or 304-348-1220.