House Committee Moves Natural Gas Severance Tax Bill

The House Rules Committee this evening amended House Bill 1531 (George-D-Clearfield) to make it the omnibus tax bill to go along with the budget deal, however, it includes significant changes to the deal negotiated by the 3 Caucuses and Gov. Rendell.
The amendment includes a natural gas production severance tax, a tax on smokeless tobacco and cigars as well as a significantly higher tax on table games than had been discussed in the Senate.
It also deletes the tax on tickets to arts performances and the levy on small games of chance that were part of the original 3 Caucus-Gov. Rendell budget deal.
The natural gas severance tax portion of the bill would impose a 5 percent tax on the gross value of natural gas at the wellhead plus 4.7 cents per thousand cubic feet of gas produced.
Starting in January 2012, the revenue from the new tax would be distributed as follows--
-- 60 percent to the General Fund;
-- 3 percent to DPW for low-income energy assistance;
-- 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 taxed;
-- 4.5 percent to counties where natural gas is taxed;
-- 2 percent to Game Commission; and
-- 2 percent to Fish and Boat Commission.
The tax would be effective in 90 days.
Based on the comments from Senate Republicans late today, this would seem to implode the budget process.