Posted: | December 23, 2014 09:42 AM |
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From: | Representative Margo L. Davidson |
To: | All House members |
Subject: | Legislation Providing for a Severance Tax on the Extraction of Natural Gas Former HB2510 and HB 2508 |
In the near future, I plan to re-introduce two bills that would provide for a severance tax on the extraction of natural gas. The first bill would amend Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes to provide for a severance tax, in addition to the current unconventional gas well fee established under Act 13 of 2012. The second bill would amend Title 72 (Taxation and Fiscal Affairs) of the Pennsylvania Consolidated Statutes to also provide for a severance tax on the extraction of natural gas. Both proposals would provide for a tax rate of 5 percent of the value of each 1,000 cubic feet of natural gas severed, plus 5 cents per 1,000 cubic feet. Under these measures, the revenue generated from a severance tax would provide a significant funding source for Pennsylvania. Specifically, the distribution of funding under both proposals would be as follows: Department of Education 32% Environmental Stewardship Fund 29.6% Department of Health 17.3% General Fund 16% Hazardous Sites Cleanup Fund 4.3% State Dam Removal Program 0.8% I feel that it is imperative that a dedicated source of funding be established to properly fund education in the Commonwealth. With that said, of the current severance tax proposals, this legislation would provide the largest allocation of funding earmarked for education. The enactment of a fair and reasonable severance tax would not render Pennsylvania any less favorable for drilling than our neighboring states, all of which currently impose an extraction tax on the production of natural gas. During these hard economic times, it is imperative that the State Legislature take into consideration all aspects pertaining to the collection and distribution of potential tax revenue. Further inactivity on this issue would be shortsighted, especially when the needs of the Commonwealth and its residents are so great. |
Description: | Former HB 2510 The first bill would amend Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes to provide for a severance tax, in addition to the current unconventional gas well fee established under Act 13 of 2012. | |
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Description: | Former HB 2508 The second bill would amend Title 72 (Taxation and Fiscal Affairs) of the Pennsylvania Consolidated Statutes to also provide for a severance tax on the extraction of natural gas.Former HB 2508 |
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