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The House Environmental Resources and Energy Committee passed a proposal Monday to levy a severance tax on natural gas extraction at a rate of 5 percent.
The tax, if enacted, would levy a 5 percent on the gross value at the wellhead, plus 4.7 cents per 1,000 cubic feet.
The committee vote was 17-9, with the Democrats voting unanimously and two Republicans joining them to pass the motion, which can be considered in the budget process.
The tax, if enacted, is projected to raise up to $223 million in 2010-11 and more than $400 million the following year. Half the proceeds would go into the state’s general fund.
The rest split among local governments, environmental programs and other beneficiaries, although in the last year, these distributions would not occur until after $75 million is diverted to the general fund.
The new bill, known as HB 1489, would create a $2,500 tax credit to natural gas production-related companies that create jobs for residents.
The department would also be required to provide an annual report on the job creation tax credit, and must publish notice of the tax credit on the Internet and notify the Department of Labor and Industry Workforce Investment Bond.
Democratic leaders sent House Bill 325 back to the Appropriations Committee on Thursday after some Democrats debated against the bill’s proposed 8 percent rate, and unbalanced 80/20 distribution rate, in which 80 percent of the severance tax revenue was to go to the state’s general fund, and 20 percent to local governments and environmental programs.
The Associated Press contributed to this report.
The House Environmental Resources and Energy Committee passed a proposal Monday to levy a severance tax on natural gas extraction at a rate of 5 percent.
The tax, if enacted, would levy a 5 percent on the gross value at the wellhead, plus 4.7 cents per 1,000 cubic feet.
The committee vote was 17-9, with the Democrats voting unanimously and two Republicans joining them to pass the motion, which can be considered in the budget process.
The tax, if enacted, is projected to raise up to $223 million in 2010-11 and more than $400 million the following year. Half the proceeds would go into the state’s general fund.
The rest split among local governments, environmental programs and other beneficiaries, although in the last year, these distributions would not occur until after $75 million is diverted to the general fund.
The new bill, known as HB 1489, would create a $2,500 tax credit to natural gas production-related companies that create jobs for residents.
The department would also be required to provide an annual report on the job creation tax credit, and must publish notice of the tax credit on the Internet and notify the Department of Labor and Industry Workforce Investment Bond.
Democratic leaders sent House Bill 325 back to the Appropriations Committee on Thursday after some Democrats debated against the bill’s proposed 8 percent rate, and unbalanced 80/20 distribution rate, in which 80 percent of the severance tax revenue was to go to the state’s general fund, and 20 percent to local governments and environmental programs.
The Associated Press contributed to this report.
