Bipartisan Bill Proposes Extraction Tax in PA

gas drillingBipartisan legislation to create a 4.9 percent drilling tax on Marcellus Shale in the state was unveiled Tuesday in Harrisburg.

The bill, proposed by Reps. Gene DiGirolamo (R-Bucks); Tom Murt (R-Montgomery); Harry Readshaw (D-Allegheny); and Pamela A. DeLissio (D-Phila./Montgomery), imposes a tax which would be levied on the actual value of the natural gas produced, replacing the impact-fee model currently placed on wells, which declines over time for the first 15 years of operation.

“For years, we have been hearing about the large natural gas deposits throughout much of the Commonwealth, and how Pennsylvania’s natural assets have the potential to help fund some of the most critical needs for our residents,” DiGirolamo said. “Although an impact fee was adopted a couple of years ago to help communities impacted by the development caused by drilling, there is still so much more potential.”

The US Energy Information Administration today released statistics that showed Pennsylvania is the third largest gas producing state in the country, and showed the greatest growth in extraction over the past year.

Forty percent of the revenue from this tax would fund impact fees paid to municipalities and the other 60% goes to the following line items:

– Education – Basic Education or Accountability Block Grants 40%
· Environmental Stewardship Fund (Growing Greener) 10%
· Investment in Public Lands – State Forests and State Parks 10%
· Alternative Fuels Incentive Grant Program (AFIG) 4%
· Drug and Alcohol Programs 8%
· Adults with Special Needs 8%
· Behavioral Health 5%
· Human Services Development Fund 5%
· HEMAP 3%
· Rape and Domestic Violence Programs 2%
· Veterans Homes 2%
· Industry Partnerships 3%

The proposal is intended to be a bipartisan alternative to Act 13, which instituted the original impact fee model.

One Response

  1. Beats the snot out of what we have now. If legislators are going to justify pushing legislation that the public barely supports and has said isn’t a major priority, then why not push stuff they actually overwhelmingly support and care about?

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