RALEIGH, N.C. (AP) -- Legislation laying out the next steps toward issuing permits for forms of underground natural gas exploration in North Carolina and taxing what's extracted has cleared a state Senate panel.

The Senate Finance Committee recommended the bill Wednesday to authorize regulators to issue horizontal drilling and fracking permits starting in March 2015. That's five months after a regulatory commission is expected to finalize rules for the practices.

Wednesday's debate focused upon new severance tax rates for oil, gas and liquid fuel that would increase annually through 2020 to encourage early exploration. Natural gas production taxes also would float based on market prices.

The General Assembly authorized fracking in 2012 but said permits couldn't be issued without the express consent of legislators.

The measure now goes to another Senate committee.

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