Seven floor amendments adopted to natural gas severance tax bill

After nearly two full days of pre-Thanksgiving debate, the Pennsylvania House of Representatives considered 23 of the nearly 400 amendments filed to House Bill 1401, legislation that would implement a volumetric natural gas tax in Pennsylvania.

With the House not returning to voting session until Dec. 4, here is a look at the amendments approved by the House during the still ongoing second consideration process last week.

Five of the seven already-adopted amendments were approved last week, some of which are seen as big giveaways to the drilling industry.

The first adopted amendment, sponsored by Rep. John Maher (R-Allegheny) who chairs the House Environmental Resources and Energy Committee, was a technical change that would move the legislation under the Oil and Gas title of the Pennsylvania Consolidated Statutes.

Two amendments sponsored by Rep. Kerry Benninghoff (R-Centre) were also adopted. The first allows drillers to move their bore hole within a 50-foot perimeter from the original location without receiving a new drilling permit.

After being defeated in a first go-around by a vote of 97-96, an amendment that would require action by the Department of Environmental Protection on a drilling permit within 45 days or the permit would be deemed approved was ultimately incorporated into the legislation in a reconsideration vote, 97-95.

The amendment is seen as a large win for the natural gas industry, which has been seeking permitting reform as part of any natural gas extraction tax.

Additionally, an amendment sponsored by Rep. Bryan Cutler (R-Lancaster) was adopted that would set permitting fees at the current levels of $4,200 for vertical unconventional wells and $5,000 for non-vertical unconventional wells.

Also incorporated was a proposal sponsored by Rep. John Lawrence (R-Chester) that would split any amount of the tax generated in excess of $150 million between each of the two state pension funds – the Public School Employee Retirements System and State Employee Retirement System – in a dedicated stream in order to help pay off the $70 billion combined unfunded liability.

Two more amendments sponsored by Cutler were added to the legislation on Tuesday.

One of the amendments, seeking to remediate drinking water issues potentially coming from natural gas drilling, requires a well operator who affects a public or private water supply by pollution or diminution to restore or replace the affected supply in a quantity and quality adequate for the purposes served by the original supply. It also provides the Department of Environmental Protection the ability to investigate and enforce the provisions in the amendment and requires the department to maintain a publicly accessible database of polluted water supplies.

Cutler’s other amendment allows an initial permit to expire within one year of issuance unless drilling operations commence or such operations are pursued with due diligence within the period. Should drilling commence within that one-year period, the permit shall remain in effect until the well is plugged or the permit is otherwise revoked.

Outside of the adopted amendments, seven amendments failed and nine others were withdrawn.

In its current form and at the rate structure currently provided by the legislation, the natural gas severance tax is anticipated to bring in $150 million to $200 million in a full fiscal year’s worth of collections.

Jason Gottesman is the Harrisburg Bureau Chief of The PLS Reporter, a news website dedicated to covering Pennsylvania’s government.