Rep. DeWeese Reintroduces Bill On Tax Assessment For Oil And Gas Reserves

In an effort to help counties, municipalities and school districts with their budgets, Rep. Bill DeWeese (D-Greene) said this week he is reintroducing legislation that would allow counties to assess value to natural gas, oil and coal-bed methane.

 

During the 2007-08 session, a similar measure--House Bill 1373-- had 26 co-sponsors.

 

"Gas operators have been drilling natural gas and methane gas wells throughout the western part of the Commonwealth and they do so virtually tax free. Proposals to drill for gas through the vast Marcellus Shale formation are spreading this phenomenon far beyond southwestern Pennsylvania," said Rep. DeWeese.

 

Rep.DeWeese said that before December 19, 2002, these natural resources were being taxed at the local level, similar to the way coal and other mineral resources are taxed. However, on that date, the Pennsylvania Supreme Court decided in "Independent Oil and Gas Association of Pennsylvania, et al v. Board of Assessment Appeals of Fayette County" that the General Assembly had not explicitly recognized gas and oil as a taxable interest.

 

"The legislation that I am reintroducing this session would correct that oversight to the benefit of counties, local municipalities, school districts and their taxpayers. The additional revenue that the local entities would receive from the drillers would be just one step in helping to prevent future local tax increases," he said. "We are only asking the owners of these natural oil and gas resources to pay the same local property taxes as other property owners in the Commonwealth do."

 

Rep.DeWeese clarified that the value would be assessed against the developer or driller, not the landowner or farmer on whose property the wells are located.

 

Previous estimates placed the assessed value of the gas and oil in Pennsylvania at between $10 billion and $20 billion, but that value likely is closer to $1 trillion with the ability to extract from the Marcellus Shale.

 

"This issue is very important to the county commissioners, township supervisors and property owners throughout Greene, Fayette and Washington counties. I am proud to be able to respond to their concerns and the concerns of county commissioners across the state by introducing this bill," he said.