George: Energy Panel OKs Severance Tax Bill

HARRISBURG, June 23 – State Rep. Camille “Bud” George, D-74 of Houtzdale, said that on Tuesday the House Environmental and Resources Committee approved his legislation that would enable Pennsylvania to receive a fair return for its valuable natural gas supplies.

“House Bill 1489 would ensure that Pennsylvania joins almost every gas-rich state in seeking a fair return for its taxpayers for the removal of a natural resource owned by the Commonwealth and requiring use of taxpayer-paid infrastructure to extract,” said George, committee chair. “The Natural Resource Severance Tax Act creates a fair contract with the gas industry for its profitable ventures in Pennsylvania’s Marcellus Shale gas deposit.”

HB 1489, approved on a 15-11 committee vote, calls for a 5 percent tax on the gross value of gas extracted and 4.7-cents for every thousand cubic feet of gas produced. The tax would not apply to smaller “stripper” wells producing 60,000 standard cubic feet a day or less.

An amendment offered by George, detailing how severance tax revenues would be shared, was approved on a 20-6 vote by the panel. The tax is projected to generate roughly $600 million annually for state coffers by 2013-14.

The revenues would be distributed as follows:
-60 percent to the General Fund;
-3 percent for the Low Income Home Energy Assistance Program, LIHEAP;
-15 percent to the Environmental Stewardship Fund;
-4 percent to the Hazardous Sites Cleanup Fund;
-5 percent to the Liquid Fuels Tax Fund;
-4.5 percent to municipalities where natural gas is extracted;
-4.5 percent to counties where natural gas is extracted;
-2 percent each to the state Game and Fish and Boat commissions.

The legislation now faces consideration before the full House.