MARCELLUS SHALE TAX BILL PROPOSAL UNVEILED

On February 8, 2011, the Pennsylvania House of Representatives introduced House Bill 33, which will institute a tax for natural gas extraction in the Marcellus Shale.  The bill includes a 5% tax rate on the value of each 1,000 cubic feet of natural gas severed, plus 4.6 cents per 1,000 cubic feet.  A similar bill is expected to be introduced in the Senate.  It is anticipated that the tax would generate approximately $245 million in revenues for 2011-12, with the possibility of growing to almost $570 million by 2015.  Currently, Pennsylvania has no severance tax or property taxes on oil and gas interests.