By a vote of 26 to 24 the Senate passed a revenue package totalling about $970 million that includes a new natural gas severance tax, a new gross receipts tax on consumer natural gas use, increases in the telcom and electric gross receipts tax and changes to the Sales Tax law that would force vendors doing business through online marketplaces such as Amazon to pay Sales Tax.
The Democrats put up 12 votes and the Republicans 14. The whole budget package has been agreed to by Senate Republicans and Democrats, House Democrats and Gov. Wolf.
Also part of the recurring revenue package is $200 million from expanded gaming, but the Senate will not consider a gaming bill this week.
Sen. Corman said there is an element securitizing the tobacco settlement money totalling about $1.3 billion.
The new severance tax is expected to generate about $108 million and revenues generated from the tax will be pledge to hold harmless the Unconventional Gas Well [Act 13 Impact Fee] Fund at a $200 million annual funding level and the remainder will be deposited in the General fund.
In exchange for the severance tax, Sen. Corman said they have negotiated regulatory reforms for the Marcellus Shale drilling industry that involves provisions that would deem approve permits not processed by existing permit review deadline (45 days), not starting the clock over again when a permit is resubmitted and “other issues significant for the industry.” (Click Here for a description of those changes.)
Nonrecurring revenues include transferring $200 million from the Joint Underwriting Association Fund
He also said Senate Republicans intend to do agency mergers, but not this week.
The Senate is scheduled to vote on the package of bills soon after then reconvene for session today at 9:30.
Judging from preliminary comments from some House Republicans, the Senate package is in for a rough reception in the House.
Code Bill Changes
Here are some key changes included in the budget-related Code bills--
Fiscal Code - House Bill 453 (Ryan-R-Lebanon)
-- Horse Race Development Fund: $10 million from the PA Race Horse Development Fund to the State Racing Commission and $19.6 million transfer to the Race Horse Development Restricted Receipts Account in 22 weekly installments.
-- Taxicab Assessment: Imposes the 1 percent assessment that is currently imposed by the Philadelphia Parking Authority on taxicabs that are regulated by the Parking Authority and do not hold medallions.
-- Ride Sharing: Allows ride sharing companies to use cars up to 15 model years old.
-- Gaming License Fees: any slot machine license fee or table game operation certificate fee paid in FY 2017-18 shall be deposited in the General Fund.
(Click Here for the amendment)
Tax Code - House Bill 542 (Thomas-D-Philadelphia)
-- Gross Receipts Tax Increase - Telephone & Transportation: $70.6 million
-- Gross Receipts Tax Increase - Electric: $83.15 million
-- Gross Receipts Tax (News) - Natural Gas: $303.7 million of which $20 million dedicated to LIHEAP, $20 million for natural gas infrastructure improvements and to expand market access for residential gas customers
-- Natural Gas Production Severance Tax (New): $108 million, would range from 1.5 to 3.5 cents per MCF depending on the price of natural gas. Revenues generated from the tax will be pledge to hold harmless the Unconventional Gas Well [Act 13 Impact Fee] Fund at $200 million and the remainder will be deposited in the General fund.
-- Electric Grid Virtual Transactions Tax On PJM Related Trades (NEW): No estimate yet
-- Sales Tax Online Marketplace Vendors: $43.5 million
-- 12% Assessment On Fireworks Purchases and expands the types of fireworks residents can buy: $4.4 million
-- Net Operating Loss: Includes provisions if the Commonwealth wins or loses the Nextel NOL case
-- Tax Amnesty: $50 million
-- Transfer From Joint Underwriting Association: $200 million
(Click Here for the amendment)
Education Code - House Bill 178 (Day-R-Berks)
-- Community Colleges: Provides for community colleges to receive the same allocation as the current year and a pro rata share of any additional funding based on each college’s share of full-time equivalent students. Deletes Section 1918-A which requires PDE to issue a report on community colleges.
(Click Here for the amendment)
Links To Code Bills
Here in one place are the links to each amended Code bill--
-- Tax Code: House Bill 542 (Thomas-D-Philadelphia) notice of Sales Tax due requirements for online vendors (Click Here for the amendment) (Click Here for Senate Fiscal Note and summary) Vote 26 to 24.
-- Fiscal Code: House Bill 453 (Ryan-R-Lebanon) one vehicle for Fiscal Code now relating to responding to Auditor General Reports (Click Here for the amendment) (Click Here for Senate Fiscal Note and summary) Vote 40 to 10.
-- Administrative Code: House Bill 118 (Kaufer-R-Luzerne) comprehensive opioid package (Click Here for Administrative Code bill amendment + summary) (Click Here for Senate Fiscal Note and summary) Vote 37 to 13.
-- Human Services Code: House Bill 59 (Moul-R-Adams) adoption subsidy appeals (Click Here for the amendment + summary) (Click Here for Senate Fiscal Note and summary) Vote 35 to 15.
-- Public School Code: House Bill 178 (Day-R-Berks) relating to school security drills (Click Here for the amendment) (Click Here for Senate Fiscal Note and summary) Vote 34 to 16.
(Press Conference broadcast by PLS Reporter via the Periscope App.)
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