PA Frankenstein House Bill Merges Severance Tax & Minimum Royalty

As predicted earlier this week, yesterday the Pennsylvania House Finance Committee voted to approve a 3.2% severance tax on top of the existing 5%+ impact tax (see RINOsaur DiGirolamo Says Vote on PA Severance Tax Coming Soon). Democrats and mainstream media are nearly orgasmic–this is as far as any severance tax bill has ever gotten in PA. The bill, House Bill (HB) 1401, now goes to the full House for a vote–maybe. It remains to be seen whether or not House Speaker Mike Turzai will allow a vote in the full House. There are procedural ways to tie up the bill. While it’s a crap shoot as to whether or not the full House would pass a Marcellus-killing severance tax, there is a section in HB 1401 that is sure to kill the bill–a guaranteed minimum royalty for landowners of 12.5%. Don’t get us wrong–we think the minimum royalty issue is very important and deserves a vote. PA Rep. Garth Everett has championed the issue, introducing a bill to accomplish that objective three times in the last six years (see PA Rep. Garth Everett Reintroduces Minimum Royalty Bill, 3rd Time). No doubt HB 1401’s chief sponsor Gene DiGirolamo (RINOsaur from the Philadelphia area) is hoping to gain support from landowners for the severance tax by grafting on the minimum royalty provision–in the style of Dr. Frankenstein’s monster. Take a body part here (severance tax) and a body part there (guaranteed minimum royalty), sew it together (HB 1401) and shock it into life with a vote. Landowners should beware of this ruse. The minimum royalty issue needs to be addressed separately, on it’s own, and not part of a severance tax bill…

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