Sen. Ted Erickson (R-Delaware) Wednesday introduced Senate Bill 1315 imposing a 4 percent tax on natural gas production at the wellhead.  Proceeds from the tax would be deposited in the state General Fund.

Last week Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee, proposed a 5 percent severance tax on the extraction of Marcellus shale gas and the revenue.

Under the proposal, education would receive the largest share of the revenue generated by the severance tax, with $375 million in FY 2014-15, growing to $453 million in FY 2015-16, and more than $1 billion by 2020 dedicated to education funding. All annual increases in tax and fee collections after FY 2015-16 would be dedicated to fund education.

Roughly $195 million of the revenue in FY 2014-15, and $250 million every year after that, would be used to fund DCED programs; make infrastructure investments; fund local economic development projects and implement new tax reduction incentives to improve the local business climate.

The proposal would also make significant investments in environmental protection with $75 million dedicated to Growing Greener programs and $75 million dedicated to replace the administration's plan to allow Marcellus drilling near state parks and forest land in FY 2014-15.

In FY 2015-16 and every year thereafter, the proposal would allocate $120 million for Growing Greener programs and $30 million for other environmental programs.

In December, Representatives Gene DiGirolamo (R-Bucks) and Tom Murt (R-Montgomery) working with Representatives Harry Readshaw (D-Allegheny) and Pam DeLissio (D-Montgomery) announced a severance tax proposal that would impose a 4.9 percent severance tax on natural gas production to replace the drilling impact fee enacted in 2011.

Under the proposal, 40 percent of the revenue would be directed to local governments in the drilling areas to help with the cost of replacement and repair of deteriorated bridges, water and sewer infrastructure and environmental initiatives. The remaining 60 percent of the drilling tax revenue would provide enhanced funding to the following programs that invest in education, the environment, human capital and economic development.

The legislation has yet to be introduced as a bill in the House.

NewsClips:

Well Impact Fee Raises Record $224.5 Million

Drilling Impact Fee Revenue Up 11 Percent This Year

Higher Natural Gas Prices Boost Drilling Fee Revenue

PA To Collect $224 Million In Gas Drilling Fees

Delaware County GOP Senate Candidate Supports Shale Tax

Democrats Critical Of PennDOT Fee Increaseses, Shale Should Pay

Editorial: On Gas, State Still Plays Catch-Up

Editorial: PA Has Room To Adjust Tax On Natural Gas Production

Editorial: PA Needs Drilling Tax

4/7/2014