Shale Tax Legislation Clears House Finance Committee, O’Neill Says
HARRISBURG – Legislation to enact a severance tax on natural gas production in the Commonwealth cleared its first hurdle today passing the House Finance Committee by a bipartisan vote of 16-9, announced Finance Chairman Rep. Bernie O’Neill (R-Bucks).

O’Neill offered a comprehensive amendment to House Bill 1401, which was authored by Rep. Gene DiGirolamo (R-Bensalem).

“This amendment is an example of both parties working together to find agreement on a concept supported by the majority of Pennsylvanians,” O’Neill said. “With this modest shale tax, I believe we’ve struck the right balance between asking drillers to pay their fair share and giving them room to grow and continue providing jobs and economic benefits to our state.”

House Bill 1401 would impose an incremental severance tax based on the average annual market value of natural gas in addition to the current per-well impact fee. The tax would apply to unconventional gas wells that are also subject to the state’s impact fee. The rate would start at 2 cents per thousand cubic feet of natural gas if the price is not more than $3 and increase to a maximum of 3.5 cents if the market price is greater than $5.99.

“This proposal uses an incremental approach to ensure we are not taxing this industry out of the state,” O’Neill said.

House Bill 1401 would include safeguards for landowners and leaseholders in natural gas-producing regions, by ensuring that producers may not pass on the severance tax.
“We are long overdue to have a broader conversation on this issue, and Pennsylvanians are ready to hear it. Moving this proposal to the full House for consideration will allow that conversation to occur,” O’Neill said.

Under the bill, revenues collected as a result of the tax would be deposited into the General Fund.

Representative Bernie O’Neill
29th District
Pennsylvania House of Representatives

Media Contact: Abbey Haslam

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