Twelve Severance Tax Proposals Pending In Senate, House, So Far

There are now an even dozen natural gas severance tax proposals pending in the Senate and House, most of which fund everything but environmental programs.  Three more have been announced in the House, but have yet to be introduced.  Here’s a rundown.

There are six severance tax bills pending in the Senate-- two Republican and four Democrat--

Senate Bills

-- Senate Bill 116 (Brewster-D-Allegheny) represented as the Governor’s proposal, however it eliminates the Act 13 impact fee starting on January 1, 2016, and has lower, capped amounts for local governments and environmental programs than the Governor’s proposal (sponsor summary).

-- Senate Bill 395 (Brewster-D-Allegheny) adopting a 5 percent severance tax all devoted to education funding, while keeping the impact fee, but crediting what producers pay to the severance tax (sponsor summary).

-- Senate Bill 415 (Haywood-D-Montgomery) providing for an 8 percent natural gas severance tax with the proceeds dedicated to these uses: $100 million dollars off the top would go to the Growing Greener Program; 60 percent of the money would go to fund Public Schools; and 40 percent would go towards reducing the unfunded pension liability (sponsor summary).

-- Senate Bill 519 (McGarrigle-R-Delaware) which would impose a 4 percent tax on the value of natural gas at the wellhead.  All the revenue from the tax would be devoted to fund basic education and nothing for any environmental restoration program (sponsor summary).

-- Senate Bill 719 (Tomlinson-R-Bucks) providing for a 5 percent natural gas severance tax with proceeds dedicated to state employee and school employee pension funds (sponsor summary).

-- Senate Bill 741 (Leach-D-Montgomery) imposing a 5 percent natural gas severance tax to create the Pay It Forward, Pay It Back Pennsylvania college scholarship fund (sponsor summary).

House Bills

There are six severance tax bills pending in the House and one announced proposal-- one Republican and five Democrat--

-- House Bill 1142 (Davidson-D-Delaware) represented as the Governor’s proposal, however it eliminates the Act 13 impact fee starting on January 1, 2016, and has lower, capped amounts for local governments and environmental programs than the Governor’s proposal (sponsor summary).

-- House Bill 82 (Harper-R-Montgomery) calls for a 3.5 percent severance tax and keeping the Act 13 impact fee with proceeds from the new tax going to fund pension liabilities (sponsor summary).

-- House Bill 500 (Dean-D-Montgomery) would impose a 4 percent “hybrid” severance tax calculated by volume and value of natural gas.  The proceeds would be deposited in the General Fund (sponsor summary).

-- House Bill 526 (Conklin-D-Centre) would impose a 5 cents per volume severance tax dedicated solely to facilitate the growth of natural gas transportation systems (sponsor summary) and

-- House Bill 528  (Conklin-D-Centre) would impose a 10 cents per volume severance tax and dedicate up to $300 million in revenue to the Low-Income Energy Assistance Program and any remaining revenue would be dedicated to the Property Tax/Rent Rebate Program (sponsor summary).

-- House Bill 716 (Carroll-D-Monroe) would create an exemption from any severance tax for natural gas produced and delivered within 5 miles of the production site (sponsor summary).

These House members circulated co-sponsor memos proposing a natural gas severance tax, but have not yet introduced the bills--

-- Rep. Gene DiGirolamo (R-Bucks): In February proposed a 3.2 percent severance tax and keeps the Act 13 impact fee with proceeds going to: basic education-- 40 percent; pension obligations-- 35 percent; human services-- 15 percent; and environmental programs-- 10 percent

-- Rep. James Santora (R-Delaware): In February proposed a 4 percent severance tax with the proceeds going to support basic education.

-- Rep. Tina Davis (D-Bucks): In February proposed an 8 percent severance tax in addition to the Act 13 impact fees with the proceeds evenly split between the General Fund and 9 education programs.