State Rep. Rick Mirabito



House Finance Committee hearing explains natural gas extraction fee

'An extraction fee would create a new revenue source for municipalities,' Mirabito said


HARRISBURG, May 12 State Rep. Rick Mirabito, D-Lycoming, co-hosted a House Finance Committee hearing in Williamsport to explain H.B. 2443 which would impose an extraction fee, also referred to as a severance tax, on natural gas drilled from the Marcellus Shale.


"An extraction fee would create a new revenue source for municipalities hosting natural gas sites, easing the burden on taxpayers to balance local budgets and provide needed services," Mirabito said. "Not only that, but it levels the playing field. Pennsylvania customers are paying for the severance tax charged in states providing their natural gas. It stands to reason the out-of-state customers expected to receive our natural gas should do the same."


House Bill 2443, sponsored by state Rep. David Levdansky, D-Allegheny/Washington, would set a fee of 25 cents per 1,000 cubic feet of natural gas that is drawn from the ground. That figure could be reviewed annually and adjusted up if necessary.


Twenty percent of the total revenue would be distributed to the Local Government Services Fund to be shared by municipalities and counties where the gas is produced, along with local volunteer fire companies and ambulances in counties where the gas is produced. Also, 3 percent of the fee would be distributed to county conservation districts.


"We are traveling across the state to explain how this bill would work, and to get feedback from residents," Levdansky said. "With the vastness of the natural gas reserves that exist in the Marcellus Shale, there is no question that companies will come to Pennsylvania and they will drill. Many already have started. We should not give this valuable natural resource away for free."


Host municipalities could use their share of the extraction fee for:

         Roadway reconstruction, maintenance and repair;

         Improvements to municipal water supplies;

         Preservation and reclamation of surface waters of the municipality;

         Industrial and commercial development;

         Parks and recreation;

         Any other lawful purposes reasonably related to natural gas production.