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House Finance Hearing On Bill To Include Gas, Methane In Property Tax Assessments
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The House Finance Committee this week held a hearing on House Bill 10 (DeWeese-D-Greene) that would allow local governments and school districts to include the value of natural gas, oil or coal bed methane in the value of property for tax purposes.
Rep. DeWeese said the reason he introduced the bill was to reverse a 2002 court decision that held the value of natural gas, oil and coal bed methane cannot be legally included in the value of property in Fayette County. Prior to the decision this value was included and property owners paid tax based on that assessment.
Douglas E. Hill, Executive Director of the County Commissioners Association of Pennsylvania); Elam M. Herr, Assistant Executive Director, Pennsylvania State Association of Township Supervisors; and Edward C. Troxell, Director of Government Affairs, Pennsylvania Association of Boroughs all testified in favor of the legislation.
Each group supported including the value of minerals in property tax assessments because oil and gas extraction causes damage to roads, bridges, water well contamination, requires the treatment of millions of gallons of drilling wastewater and puts additional burdens on emergency services.
They also said there is no reason why oil and gas rights owners should not pay their fair share of local taxes like they did before and like other local businesses do. They noted coal resources are included in property tax assessments.
Daniel Fisher, Bald Eagle School District, said ever since the 2002 decision, his district has seen a significant decline in tax revenue. Fisher said the population growth caused by Marcellus Shale drilling is straining school districts and there needs to be some mechanism for school districts to deal with these additional costs.
Louis D'Amico, Independent Oil and Gas Association of PA, said there are difficulties in properly assessing the value of natural gas in highly volatile markets. He also said the industry is already heavily taxed and it would lead to an inequality when compared to mineral owners.
D'Amico said every state taxes oil and gas reserves differently and suggested some sort of profit or income tax would be fairer. He added a severance tax is not income based. He also said he never claimed real estate taxes would drive the gas industry out of the state.
Rep. David Levdansky (D-Allegheny) serves as Majority Chair of the Committee and Rep. Sam Rohrer (R-Berks) serves as Minority Chair.
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2/8/2010 |
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