Marcellus Minutes is a subscription-based newsletter sent to all subscribers registered through the Marcellus Minutes website that contains information on legislation including bill tracking, committee hearings and news from the Capitol in Harrisburg. Access to the website is free and provided to those directly involved and those with an interest in Pennsylvania’s oil and gas industry.

Show me the Money! Read Severance Tax Dsitribution Proposals

Show me the Money:
There are several bills that impose a severance tax in different ways and they also distribute the revenue differently.  Below is a look at where the money goes.
HB 325 (Melio)
The distribution of revenues is as follows:
• General Fund: 80%
• Local share: 12%
• Environmental Stewardship Fund: 4%
• Conservation District Fund for distribution to county conservation districts pursuant to guidelines established by the State Conservation Commission: 2%
• Hazardous Sites Cleanup Fund: 0.5%
• Pennsylvania Game Commission: 0.5%
• Pennsylvania Fish and Boat Commission: 0.5%
• Department of Public Welfare to provide cash crisis grants to low-income households under the Low Income Home Energy Assistance Program (LIHEAP): 0.5%
HB 1489 (George)
Year 1:
A one-time $75 million transfer to the general fund
The remainder is transferred as follows:
50% to the General Fund
15% to the Environmental Stewardship Fund
20% to the Local Government Services Account
2% to the Hazardous Sites Cleanup Fund
3% to the Conservation District Fund
2% to the Game Commission
3% to the Fish and Boat Commission
2% to LIHEAP
2% to the Oil and Gas Environmental Disaster Recovery Account
1% for low-dam removal, repair and restoration projects managed by DEP
20 % of the local government services account is distributed as follows:
30% to counties with producing sites
40% to municipalities with producing sites
20% to municipalities with non-producing sites but are within a county that has producing sites
10% to the PA Emergency Management Agency 2
The amount of money each county or municipality will get is based on the number of producing sites it has in relation to the total number of producing sites in PA. The ratio used for eligible municipalities with no producing sites is the same as the ratio for the county in which those municipalities are located.
After Year 1: the same percentage distribution as Year 1, but without the $75 million transfer.
HB 2435 (Evans)
Until June 30, 2011, 90 percent of the proceeds of this tax shall be deposited in the Stimulus
Transition Reserve Fund. After that time, revenue shall be deposited in the General Fund. The remaining 10% of the proceeds shall be deposited in a restricted revenue account for distribution to host municipalities and counties (50 percent to municipalities and 50 percent to counties).
Distributions of restricted receipts funds:
50% of the funds in the restricted receipts account shall be distributed to municipalities where natural gas has been severed and taxed. The amount distributed shall be determined on a pro rata basis as follows: The total amount to be distributed under this paragraph is divided by the total number of taxable gas units severed in this Commonwealth; this quotient is then multiplied by the total number of taxable gas units severed in the municipality. The result equals the amount of money to be distributed to the municipality, which shall be used solely for any of the following:
·         Reconstruction, maintenance and repair of municipal roadways and bridges which the municipality has determined have been or are being used extensively to transport natural gas or equipment related to the production thereof.
·         Parks and recreation.
·         Industrial and commercial development.
·         Preservation and improvement of municipal water supplies.
·         Maintenance and capital improvements to the municipal waste and sewage systems.
·         Preservation and reclamation of the surface waters of the municipality.
·         Other lawful purposes reasonably related to the consequences of severing natural gas in the municipality.
50% of the funds in the restricted receipts account established shall be distributed to counties where natural gas has been severed and taxed under this article. The amount distributed to a county shall be determined on a pro rata basis as follows:
The total amount to be distributed under this paragraph is divided by the total number of taxable gas units severed in this Commonwealth; this quotient is then multiplied by the total number of taxable gas units severed in the county. The result equals the amount of money to be distributed to the county, which shall be administered by a board comprised of the chairperson of the board of county commissioners, a representative from the natural gas producing municipalities within the county and a county commissioner selected by the representative of the natural gas producing municipalities. The board shall give priority to the reconstruction, repair and maintenance of county roadways and bridges determined by the board to have been and are being used to transport natural gas or equipment related to the production thereof and may allocate the remainder to the county or its municipalities for any of the purposes enumerated above.
HB 2438 (Evans)
Until June 30, 2011, 90% of the proceeds of the natural gas severance tax, penalties and interest imposed by this act, less the amounts appropriated for payment of refunds, enforcement or administration, shall be deposited into the General Fund.
10% of the proceeds of the natural gas severance tax, penalties and interest imposed by this act, less the amounts appropriated under section 28, shall be deposited into a restricted receipts account established within the General Fund.
Distributions:
50% of the funds in the restricted receipts account established shall be distributed to municipalities where natural gas has been severed and taxed under this act. The amount distributed shall be determined on a pro rata basis as follows: The total amount to be distributed under this paragraph is divided by the total number of taxable gas units severed in this Commonwealth; this quotient is then multiplied by the total number of taxable gas units severed in the municipality. The result equals the amount of money to be distributed to the municipality, which shall be used solely for any of the following:
·         Reconstruction, maintenance and repair of municipal roadways and bridges which the municipality has determined have been or are being used extensively to transport natural gas or equipment related to the production thereof.
·         (ii) Parks and recreation.
·         (iii) Industrial and commercial development.
·         (iv) Preservation and improvement of municipal water supplies.
·         (v) Maintenance and capital improvements to the municipal waste and sewage systems.
·         (vi) Preservation and reclamation of the surface waters of the municipality.
·         (vii) Other lawful purposes reasonably related to the consequences of severing natural gas in the municipality.
50% of the funds in the restricted receipts account established shall be distributed to counties where natural gas has been severed and taxed under this act. The amount distributed to a county shall be determined on a pro rata basis as follows: The total amount to be distributed under this paragraph is divided by the total number of taxable gas units severed in this Commonwealth; this quotient is then multiplied by the total number of taxable gas units severed in the county. The result equals the amount of money to be distributed to the county, which shall be administered by a board comprised of the chairperson of the board of county commissioners, a representative from the natural gas producing municipalities within the county and a county commissioner selected by the representative of the natural gas producing municipalities. The board shall give priority to the reconstruction, repair and maintenance of county roadways and bridges determined by the board to have been and are being used to transport natural gas or equipment related to the production thereof and may allocate the remainder to the county or its municipalities for any of the purposes enumerated above.
HB 2579 (Mirabito)

  FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015 & beyond
General Fund 80% 75% 70% 65% 60% 50%
Local Share 12% 15% 17% 20% 24% 30%
Env. Disaster Relief & Economic Fund     2% 3% 3% 5%
State Programs Breakdown Below 8% 10% 11% 12% 13% 15%
Total 100% 100% 100% 100% 100% 100%
             
Environmental Protection 4% 6% 7% 8% 9% 11%
Conservation District 2% 2% 2% 2% 2% 2%
Hazardous Cleanup .5% .5% .5% .5% .5% .5%
Game Commission .5% .5% .5% .5% .5% .5%
Fish & Boat .5% .5% .5% .5% .5% .5%
LIHEAP .25% .25% .25% .25% .25% .25%
Weatherization .25% .25% .25% .25% .25% .25%

SB 905 (Musto)
Legislation does not contain funding distribution.
SB 997 (Dinniman)
(1) 50% to the General Fund.
(2) 22% percent to the Environmental Stewardship Fund.
 (3) 22% percent to the Commonwealth Financing Authority for distribution to eligible municipalities in this Commonwealth to assist with the costs and burdens associated with natural gas drilling and extraction located within or adjacent to their borders and to assist municipalities with the costs and burdens associated with natural gas transmission lines located within their borders.
(4) 3% to the Pennsylvania Fish and Boat Commission for habitat conservation and public access projects.
(5) 3% to the Pennsylvania Game Commission for habitat conservation and public access projects.
SB 1254 (Dinniman)
The Natural Gas Tax Relief Conservation & Community Investment Fund is established.
(1) Twenty-two million dollars to the Environmental Stewardship Fund
(2) Twenty-two million dollars to the Commonwealth Financing Authority for distribution to eligible municipalities in this Commonwealth to assist with the costs and burdens associated with natural gas drilling and extraction located within or adjacent to their borders and to assist municipalities with the costs and burdens associated with natural gas transmission lines located within their borders.
(3) Three million dollars to the Pennsylvania Fish and Boat Commission
(4) Three million dollars to the Pennsylvania Game Commission.
(5) The balance of the money to the Property Tax Relief Fund for the purpose of local property and wage tax relief.

 Marcellus Minutes © 2015 | 4075 Linglestown Road, PMB 356 | Harrisburg, PA 17112 | Bigley and Blikle, LLC