Severance Tax

Impact Fee

HB 33 (Vitali) This bill would establish a severance tax of 5 percent of the value of each 1,000 cubic feet of natural gas severed, plus 4.6 cents per 1,000 cubic feet.

SB 1100 (Scarnati) This bill establishes an impact fee of $10,000 per well (applies to vertical/horizontal shale wells only)

o Base Fee is adjusted independently for increases in production volume and price of gas

o Fee structure establishes a floor for expected revenues, but if production and/or prices move substantially higher, revenues will increase as well

o Fee is self-prorating for partial years through the volume adjustment factor

o Marginal and vertical shale gas wells pay the base fee of $10,000 per well

HB 833 (George) This bill would establish a severance tax of 30 cents per 1,000 cubic feet of gas.

Not filed yet (Quinn) co-sponsorship memo  The bill would impose a graduated impact fee on Marcellus Shale natural gas wells:  Years 1-2: $50,000, Years 3-4: $45,000, Years 5-6: $40,000, Years 7-8: $35,000, Years 9-10: $30,000, Years 11-12: $25,000, Years 13,14: $20,000, Years 15 thru 20: $15,000 and Years 21 and thereafter: $10,000.

HB 1406 (Harper) This bill establishes a severance tax similar to the state of Arkansas.  It would impose a tax of 1.5% in the first 6 months and 5% thereafter.

SB 352 (Dinniman) This bill establishes a severance tax of 5 percent of the gross value of units severed at the wellhead during a reporting period, plus 4.7 cents per unit severed.

SB 905 (Yudichak) The bill would impose a severance tax of 2 percent of the gross value of the natural gas severed at the wellhead; this tax rate would be in place for the first three years of well production;

• When the well has been in production for more than three years, the tax rate would

increase to 5 percent;

• The tax rate would readjust back to 2 percent if a well's rate of production fell below ISO

MCF of natural gas per day and above 60 MCF per day;

• Wells that produce less than 60 MCF of natural gas per day are exempt from the tax.

Not filed yet (Miccareli) This bill would impose a 3 percent severance tax in the first two years, which will increase to 5 percent thereafter. It will generate an estimated $1.1 billion in severance tax revenue by 2015, which will be used to reduce the state’s portion of the personal income tax rate from 3.07 percent to 2.99 percent.

Not filed yet (Pileggi) co-sponsorship memo…The bill would generate $250 million per year for five years and the revenue would be dedicated to property tax relief for seniors 65 and older.