Allegany County wants to join Garrett in natural gas revenue

Road to production tax begins in Annapolis

CUMBERLAND — What’s good for Garrett County is good for Allegany. At least, it could be.

So said the Allegany County commissioners, who requested Friday that the county’s delegation to Annapolis introduce legislation that would force producers of natural gas to pay a 5.5 percent tax at the point of production. The commissioners made their request during an annual presession meeting with Sen. George Edwards and Delegates Kevin Kelly, LeRoy Myers and Wendell Beitzel.

Western Allegany County — and all of Garrett County — sit atop what some experts claim as the world’s largest field of natural gas.

The commissioners noted Garrett County has recognized legislation for nearly 60 years regulating revenues for natural gas well production. Last year, the General Assembly modified the tax percentage to 5.5 percent from 7 percent, with 0.5 percent being earmarked for Garrett County’s municipalities based on population.

Beitzel said prior to last session, the 7 percent tax was levied at the point of sale when the natural gas was sold on the market. That put the companies paying tax in “Texas, New York, Saudi Arabia or somewhere else,” he said.

“Now, the producer of gas at the wellhead pays,” Beitzel said.

Edwards said original legislation earmarked the tax revenue for public education or the hospital.

“The new law (sends the money) to the county’s general fund,” Edwards said.

Edwards said there is at least one company working on securing permits to explore in western Allegany County and that production could “be a huge benefit to the economy.”

That depends, Beitzel said, “on whether natural gas is able to be produced. There is some question. We’ve received assurance from regulators that (the state agencies) will move these permits through. There’s a lot of interest in drilling in the Marcellus shale.”

Edwards said an amendment to existing law could be introduced and simply request to add Allegany County to the law that gained the General Assembly’s approval last year.

While county officials acknowledged the need for state assistance in this issue, they feel that land-use issues should by and large remain controlled by local governments. The state Task Force on the Future Growth and Development, sponsored by the Maryland Department of Planning, is set to expire in 2010, but Phil Hager, county planning coordinator, said he expects a bill to be introduced to extend the task force another 10 years.

“Planning and land-use issues have received a lot of attention,” Hager said, and sometimes even the best intentions go awry because “the law of unintended consequences rears its ugly head.”

Commissioner Dale Lewis said the county asked to have a seat at the table and the chairman of the group, Jon Laria, “more or less said ‘no.’”

Hager and the commissioners asked the delegation to help create a rural land-use task force.

The current 21-member task force “obviously doesn’t include anyone from this part of the state or from most rural portions of the state,” Hager said.

“They’ve created a lot of different work groups ... but it’s not a seat at the table. It’s not a voting role. (Lari’s) answer was, basically, unequivocally, ‘We’re not interested in exchanging further dialogue (and) we think we know what’s best for you.’”

Kelly said that’s what happens when special-interest groups dominate the agenda. Edwards said metropolitan policymakers need to realize Mountain Maryland’s restriction on growth is based largely on steep slopes, which are unbuildable, and the fact that the state owns a large percent of the land in both Allegany and Garrett counties.

“We’re really fighting a battle for local control of land-use planning,” Beitzel said. “More and more, you see the state trying to come and encroach upon local jurisdictions to exert their authority over land-use decisions. The big fight is whether or not you want to preserve that local control.”

Contact Kevin Spradlin at kspradlin@times-news.com.