MONROEVILLE, May 6, 2011 – State Senator Jim Brewster (D-Allegheny/Westmoreland) today announced he will introduce legislation that would place a 7 percent extraction tax on gas drilling to restore education funds, initiate public works projects that benefit local municipalities and protect Pennsylvania’s environment.
Brewster’s legislation would also mandate that those who work at drilling sites be trained to prevent and respond to drilling-related emergencies.
“Instituting a moderate tax on Marcellus shale drilling companies would ensure that we have the financial resources to restore education funds, pay for adequate environmental protection and fund local road, bridge and sewage system improvements,” Brewster said.
“There is no reason why we should not pursue a reasonable extraction tax that meets the needs of Pennsylvania. The Marcellus and Utica shale deposits are a resource that will serve us throughout this century. It’s a resource that belongs to all Pennsylvania and all of our taxpayers should benefit. It’s time Pennsylvania joins all other gas-producing states in implementing a reasonable tax on drilling companies.”
The Brewster legislation calls for a 7 percent Marcellus Shale extraction tax that would generate up to $280 million annually. His proposal is modeled after an extraction tax plan (Senate Bill 1155) that passed the state House last year. Brewster’s bill differs in that it would fund education and enable gas drilling companies to reduce their tax liability by hiring Pennsylvania workers and investing in community projects such as parks, libraries and other facilities.
“We want to reward companies that hire Pennsylvania workers and invest in Pennsylvania communities,” Brewster said. “My plan offers these companies tax credits that could cut their overall tax liability to as little as 5 percent.”
The proceeds of the revenue will be split three ways: 50 percent will be earmarked for education; 25 percent is targeted for state environmental protection and support of environmental programs as well as an escrow account specifically set aside for emergencies, and 25 percent of the revenue will be placed in a local government services account.
In addition to the severance tax, Brewster’s legislative package requires additional training for any employee who works or has access to well-sites and drilling pads. Under the proposal, all workers would be required to complete a health and safety apprenticeship training program coordinated through local unions and community colleges.
“The health and safety component of my legislation is an important part of protecting workers, local citizens, our waterways and environment,” Brewster said. “The new training component would ensure that workers who are in the field are trained to handle on-site emergencies that may arise.”
“Pennsylvania finds itself experiencing what is a current day gold rush within our state; gas extraction from Marcellus shale. This new industry has the opportunity to grow in wealth and revenue for at least the next 50 years,” said Brewster. “In addition, we find our most cherished institution, public education, in need of funding. The new revenue from the gas extraction tax can be used to fund education and enable our schools to continue educating our leaders of tomorrow, as well as, train our workforce for the gas extraction industry. These two entities are perfect partners.”
Brewster made his announcement at the Boyce Campus of the Community College of Allegheny County (CCAC). He was joined by Dr. Charles Martoni, the school’s president. Rep. Sid Michaels Kavulich (D-Lackawanna), who is working with Brewster on the legislation, is preparing a House version of the legislation.
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