House Environmental Committee To Again Consider Impact Fee/Severance Tax Bill Sept. 25

The House Environmental Resources and Energy Committee is scheduled to again consider House Bill 113 (Harper-R-Montgomery) at a meeting on September 25.

On September 11 the Committee amended the bill to change the name of the existing Act 13 drilling impact fee to “severance tax” and then deleted all provisions in the bill enacting a real natural gas severance tax.

The amendment was offered by Rep. John Maher (R-Allegheny), the Majority Chair of the Committee, and was approved in a party-line vote Republicans supporting.

The bill was then held in Committee to give members more time to prepare additional amendments.

These amendments to be bill were ready for the last meeting--

-- Rep. Carroll/A03054: Fix for the definition of stripper well definition as a result of a Commonwealth Court decision in March to prevent loss of revenue to Act 13 impact fee;

-- Rep. Tallman/A03250: Reducing the severance tax from 3.5 percent to 1.75 percent; and

-- A03296: Eliminate Act 13 impact fee, replace with 5 percent severance tax with the same distribution.

It is not known what additional amendments may be considered at this writing.

In reaction to the Committee’s action last time, prime sponsor of the bill Rep. Kate Harper (R-Montgomery) said, “I am very disappointed that the House Environmental Resources and Energy Committee essentially voted to remove the severance tax from House Bill 113. With that bill, I had hoped to help solve our current budget impasse.

“I had designed a bill with a reasonable severance tax rate and with the proceeds going to the communities affected by the shale drilling; environmental programs statewide; the Pennsylvania State Police, which provides local police services to many of the communities in the shale region; and the underfunded teachers’ pension program, which is causing property taxes to rise across the state.

“The General Fund, currently short by $2 billion, needs the revenues to pay for essential government services, and before we tax cable, telephone and natural gas customers, we should enact a reasonable severance tax here in Pennsylvania.

“I am not hostile to the natural gas industry – truly I believe Pennsylvania can be the ‘Saudi Arabia’ of natural gas – but every other gas-producing state has a severance tax. These big industry giants are, in fact, paying this tax already to other states, and the price of natural gas to the customer, whether in Pennsylvania or Oklahoma, is set by an international market which has already factored in a reasonable severance tax because every other state has one.

“I will be filing an amendment to the current bill as amended by the committee to levy a 5 percent severance tax and direct the revenues it produces to the communities affected by the drilling, to the state police that protect those communities, to teacher pensions that were earned and must be paid, and to environmental programs statewide both to regulate the drilling and production of natural gas and to provide funds for mitigating its effects.

“I am hopeful that such an amendment – with a severance tax overwhelmingly supported by Pennsylvanians statewide – will break the budget logjam and get the job done.”

A discharge resolution requesting committee consideration of the bill was filed on July 11.
The meeting will be held in Room B-31 Main Capitol starting at Noon.  Typically, committee meetings are webcast on the House Republican Caucus website.

Rep. John Maher (R-Allegheny) serves as Majority Chair of the House Environmental Committee and can be contacted by sending email to: jmaher@pahousegop.com.  Rep. Mike Carroll serves as Minority Chair and can be contacted by sending email to: mcarroll@pahouse.net.