June 23, 2009

By a vote of 15 to 11, the House Environmental Resources and Energy Committee reported the Severance Tax bill, HB 1489, from committee this morning. The bill now heads to the House floor but must next pass thru the House Appropriations Committee. There was an amendment adopted in Committee that would establish Accredited Laboratories to certify the wellhead meters and would distribute only 60% of the generated revenue from the tax to the General Fund with the balance broken out among other local sources. Some members noted that this new distribution will reduce the Governor’s projection of funds to the General Fund to balance the state budget.

Those sources include:  

3% to the Department of Public Welfare for the Low Income Energy Assistance Program

15% to the Environmental Stewardship Fund 4% to the Hazardous Sites Cleanup Fund

5% to the Liquid Fuels Tax Fund

4.5% to Municipalities for environmental infrastructure

4.5% to Counties

2% to the Fish & Boat Commission

2% to the Game Commission  

The bill requires a driller to apply for a severance tax registration certificate, requires wellhead meters and establishes a reporting period defined as "a calendar month in which natural gas is severed.” The tax imposed would be 5% of the gross value of units severed at the wellhead during a reporting period, plus 4.7 cents per unit severed. To read the bill, click here. To see the members of the Committee click here.

Look for a more detailed accounting of today's meeting later this week.