FISH AND BOAT COMMISSION [ 58 PA. CODE CH. 51 ] Administrative; Royalty Rates [40 Pa.B. 6151]
[Saturday, October 23, 2010]The Fish and Boat Commission (Commission) proposes to amend Chapter 51 (relating to administrative provisions). The Commission is publishing this proposed rulemaking under the authority of 30 Pa.C.S. (relating to the Fish and Boat Code) (code).
A. Effective Date
The proposed rulemaking, if approved on final-form rulemaking, will go into effect on January 1, 2011, or publication in the Pennsylvania Bulletin, whichever occurs later.
B. Contact Person
For further information on this proposed rulemaking, contact Laurie E. Shepler, Esq., P. O. Box 67000, Harrisburg, PA 17106-7000, (717) 705-7810. This proposed rulemaking is available on the Commission's web site at www.fish.state.pa.us.
C. Statutory Authority
The proposed amendment to § 51.92 (relating to royalty rates) is published under the statutory authority of section 503(c) of the Conservation and Natural Resources Act (CNRA) (71 P. S. § 1340.503(c)).
D. Purpose and Background
There are five companies that currently dredge material from the navigable waters of this Commonwealth and pay royalties to the Commission. Royalties from sand and gravel extracted from Commonwealth waters are paid to the Fish Fund, which is administered under Chapter 5 of the code (relating to fiscal affairs).
Under section 503(c) of the CNRA, the Commission, with the concurrence of the Department of Environmental Protection (Department), is authorized to adjust the amount of royalty payments per ton or cubic yard of usable or merchantable, or both, sand or gravel, or both, extracted from Commonwealth waters. The current royalty rate schedule in § 51.92, which was adopted in 1997, will expire on December 31, 2010.
With an eye towards establishing a new rate schedule, the Commission's Executive Director established a workgroup consisting of Commission and Department staff and five representatives from the sand and gravel dredging industry and asked them to collaboratively work together and develop a fair and equitable process for setting royalty rates for the 10-year period of January 1, 2011, through December 31, 2020. The workgroup formally met in April and May 2010 to discuss issues pertaining to setting royalty rates, including the need to simplify the annual rate calculation process and employ a market based approach.
With input from the Department and the industry representatives, the Commission proposes to amend § 51.92 to read as set forth in Annex A.
E. Summary of Proposal
The Commission proposes the following schedule for imposition of the updated sand and gravel royalty rates:
(1) During the period January 1 through December 31, 2011, the greater of $1,000 or $0.48 per dry ton.
(2) During the period January 1, 2012, through December 31, 2015, the greater of $1,000 or 6.75% of the immediately preceding year's published price, average value, dollars per metric ton (converted to United States ton) for the commodity sand and gravel in the United States Geological Survey, Mineral Commodity Summary per dry ton, provided that the rate per dry ton is not less than $0.48.
(3) During the period January 1, 2016, through December 31, 2020, the greater of $1,000 or 7.0% of the immediately preceding year's published price, average value, dollars per metric ton (converted to United States ton) for the commodity sand and gravel in the United States Geological Survey, Mineral Commodity Summary per dry ton, provided that the rate per dry ton is not less than $0.48.
F. Paperwork
The proposed rulemaking will not increase paperwork and will not create new paperwork requirements.
G. Fiscal Impact
The proposed rulemaking will impose increased costs on the private sector, namely, those businesses engaged in dredging in this Commonwealth. In 2009, those businesses paid the Commission a royalty rate of $0.4371 per dry ton and they reported that in 2009, they sold 1,537,131 dry tons of merchantable sand and gravel. They, therefore, paid royalties totaling $671,880 in 2009. If the companies continue to dredge material in similar quantities in the future and pay the proposed minimum rate of $0.48 per dry ton, the increased costs will total, at a minimum, approximately $65,943 per year for all business engaged in dredging. The proposed rulemaking may have a nominal fiscal impact on customers of sand and gravel, including the Commonwealth, its political subdivisions and the general public, if the businesses currently engaged in dredging pass their increased costs on to their customers.
H. Public Comments
Interested persons are invited to submit written comments, objections or suggestions about the proposed rulemaking to the Executive Director, Fish and Boat Commission, P. O. Box 67000, Harrisburg, PA 17106-7000 within30 days after publication of this proposed rulemaking in the Pennsylvania Bulletin. Comments submitted by facsimile will not be accepted.
Comments also may be submitted electronically by com- pleting the form at www.fishandboat.com/regcomments. If an acknowledgment of electronic comments is not received by the sender within 2 working days, the comments should be retransmitted to ensure receipt. Electronic comments submitted in any other manner will not be accepted.
JOHN A. ARWAY,
Executive DirectorFiscal Note: 48A-220. No fiscal impact; (8) recommends adoption.
Annex A TITLE 58. RECREATION PART II. FISH AND BOAT COMMISSION Subpart A. GENERAL PROVISIONS CHAPTER 51. ADMINISTRATIVE PROVISIONS Subchapter J. ROYALTIES FOR SAND AND GRAVEL PERMITS § 51.92. Royalty rates.
Persons holding permits granting them nonexclusive rights and privileges of dredging, excavating, removing and carrying away merchantable sand and gravel under agreements between the permittees and the Department of Environmental Protection shall pay royalties in accordance with the following schedule.
(1) [During the period, January 1 through December 31, 1998—15¢ per dry ton or 25¢ per cubic yard; or $1,000, whichever is greater.
(2) During the period, January 1, 1999 through June 30, 2000—20¢ per dry ton or 30¢ per cubic yard; or $1,000, whichever is greater.
(3) During the period, July 1, 2000 through December 31, 2001—25¢ per dry ton or 37.5¢ per cubic yard; or $1,000, whichever is greater.
(4) During the period, January 1, 2002 through December 31, 2002—30¢ per dry ton or 40¢ per cubic yard; or $1,000, whichever is greater.
(5) During the period, January 1, 2003 through December 31, 2010—30¢ per dry ton or 40¢ per cubic yard plus or minus an amount equal to the change in the producer price index (PPI) for sand and gravel from the base year (2002), provided that the rate per dry ton may not be less than 25¢.]
During the period, January 1 through December 31, 2011, the greater of $1,000 or $0.48 per dry ton.
(2) During the period, January 1, 2012, through December 31, 2015, the greater of $1,000 or 6.75% of the immediately preceding year's published price, average value, dollars per metric ton (converted to U.S. ton) for the commodity sand and gravel in the United States Geological Survey, Mineral Commodity Summary per dry ton, provided that the rate per dry ton is not less than $0.48.
(3) During the period, January 1, 2016, through December 31, 2020, the greater of $1,000 or 7.0% of the immediately preceding year's published price, average value, dollars per metric ton (converted to U.S. ton) for the commodity sand and gravel in the United States Geological Survey, Mineral Commodity Summary per dry ton, provided that the rate per dry ton is not less than $0.48.
[Pa.B. Doc. No. 10-2003. Filed for public inspection October 22, 2010, 9:00 a.m.]
