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PA Bulletin, Doc. No. 11-796

RULES AND REGULATIONS

Title 58—RECREATION

FISH AND BOAT COMMISSION

[ 58 PA. CODE CH. 51 ]

Administrative; Royalty Rates

[41 Pa.B. 2437]
[Saturday, May 14, 2011]

 The Fish and Boat Commission (Commission) amends Chapter 51 (relating to administrative provisions). The Commission is publishing this final-form rulemaking under the authority of 30 Pa.C.S. (relating to the Fish and Boat Code) (code).

A. Effective Date

 The final-form rulemaking will go into effect upon publication in the Pennsylvania Bulletin.

B. Contact Person

 For further information on the final-form rulemaking, contact Wayne Melnick, Esq., P. O. Box 67000, Harrisburg, PA 17106-7000, (717) 705-7810. This final-form rulemaking is available on the Commission's web site at www.fish.state.pa.us.

C. Statutory Authority

 The 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, expired on December 31, 2010. However, the Commission's Executive Director, acting under the authority of § 65.25 (relating to temporary changes to fishing regulations), took immediate action to amend § 51.92 to impose new royalty rates, effective January 1, 2011. See 40 Pa.B. 7446 (December 25, 2010). The temporary modification will remain in effect until publication of this final-form rulemaking.

 With an eye towards establishing a new rate schedule, the Commission's Executive Director previously 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 from 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 industry representatives, the Commission published § 51.92 as set forth in the proposed rulemaking at 40 Pa.B. 6151 (October 23, 2010).

E. Summary of Changes

 The Commission adopts the following schedule for imposition of the updated sand and gravel royalty rates:

 (1) From January 1 through December 31, 2011, the greater of $1,000 or $0.48 per dry ton.

 (2) From 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) From 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 final-form rulemaking will not increase paperwork and will not create new paperwork requirements.

G. Fiscal Impact

 The final-form 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. 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 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 final-form 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

 The proposed rulemaking was published at 40 Pa.B. 6151. The Commission did not received public comments regarding the proposed rulemaking.

Findings

 The Commission finds that:

 (1) Public notice of intention to adopt the amendments adopted by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations promulgated thereunder, 1 Pa. Code §§ 7.1 and 7.2.

 (2) A public comment period was provided and no public comments were received.

 (3) The adoption of the amendments of the Commission in the manner provided in this order is necessary and appropriate for administration and enforcement of the authorizing statutes.

Order

 The Commission, acting under the authorizing statutes, orders that:

 (a) The regulations of the Commission, 58 Pa. Code Chapter 51, are amended by amending § 51.92 to read as set forth at 40 Pa.B. 6151.

 (b) The Executive Director will submit this order and 40 Pa.B. 6151 to the Office of Attorney General for approval as to legality and form as required by law.

 (c) The Executive Director shall certify this order and 40 Pa.B. 6151 and deposit them with the Legislative Reference Bureau as required by law.

 (d) This order shall take effect May 14, 2011.

JOHN A. ARWAY, 
Executive Director

 Fiscal Note: Fiscal Note 48A-220 remains valid for the final adoption of the subject regulation.

[Pa.B. Doc. No. 11-796. Filed for public inspection May 13, 2011, 9:00 a.m.]


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