Posts Tagged ‘D-Greene County’

State county commissioners association is working to broaden taxing authority.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Counties, municipalities and school districts aren’t seeing any significant tax revenue related to Marcellus Shale development under current tax law.

But the County Commissioners Association of Pennsylvania is working to change that, lobbying for legislation that would give those governmental bodies property taxing authority on natural gas similar to taxes levied on coal extraction.

“We have to have the assessment law changed. The reason (is that) other minerals are assessed. It’s not fair to the other mineral (extraction companies) and it’s not fair to the rest of the taxpayers who have to pick up the burden of their exemption,” association Executive Director Douglas Hill said of natural gas and oil companies.

Hill said the state Supreme Court in 2002 ruled that counties had no statutory authority to tax oil and gas because state assessment law specifically includes coal but makes no mention of oil or gas.

Since that time, oil and gas interests have been escaping local property taxes, which had been paid in oil and gas-producing counties since at least the early 1900s, according to a position paper released by the association.

“Producers of other minerals such as coal and limestone already pay their fair share of the property tax. Counties support reversing the Supreme Court’s 2002 decision to assure that oil and gas companies contribute their share to the local tax base as well,” the paper states.

Hill said House Bill 10 of 2009, sponsored by state Rep. Bill DeWeese, D-Greene County, would restore property tax assessment authority on oil and gas.

The levy proposed in the bill would apply only to proven wells. “If there’s nothing to be extracted or (the gas) can’t be extracted, then there is no value,” Hill said.

Hill said there is, of course, opposition to the bill from the oil and gas industry. But he pointed out that other oil and gas producing states assess oil and gas extraction. Hill also said that large, multinational companies involved in Marcellus Shale exploration already had payment of such a tax built into their business plans and were surprised to learn that Pennsylvania counties can’t assess natural gas extraction.

Another association position paper points out several ways local communities are impacted by Marcellus Shale exploration that justify taxation.

“Some of the most visible impacts have been to township roads, county bridges and other infrastructure as developers bring drilling rigs, construction equipment and truckloads of water to and from drilling sites. &hellip Hotels might be filled with workers associated with Marcellus, impacting both the tourism industry and the county hotel tax,” according to the paper.

“Workers from out of state and their families have utilized social services such as drug and alcohol treatment and children and youth services. County jails, county probation and law enforcement have been affected. Even county recorder of deeds offices are affected, flooded by title searchers confirming ownership of subsurface rights,” the paper states.

House Bill 10 is still in the House Finance Committee for consideration.

“We’ve been working on getting agreement to move on it. We want to have things in place for a vote in the House and prepare for going to the Senate. We’ve also been working on an introduction of a bill in the senate,” Hill said.

Generally, legislators understand the issue, Hill said, but it “gets confusing at times because they are looking at a state severance tax,” and the county and local taxation issue “gets tied up in all the other issues related to the Marcellus,” he said.

Currently, there are at least five Senate bills and at least 17 House bills pertaining to Marcellus Shale exploration as well as one House bill, two senate bills and a budget proposal from Gov. Ed Rendell that address the imposition of a severance tax, according to information provided by state Sen. Lisa Baker, R-Lehman Township.

In the meantime, county assessors are waiting for some legislative determinations.

Luzerne County Assessor’s Office Director Tony Alu feels pretty confident that legislation eventually will be adopted and that the county will see some tax revenue from natural gas extraction.

Alu said assessors from various counties had been discussing among themselves various taxation formulas that would be most appropriate to tax natural gas extracted.

“We’re waiting on the state to make a determination so that we can all be uniform. &hellip We just want to make sure we’re doing the right thing,” Alu said.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

Bill, 2 Supreme Court decisions could alter how operations are taxed, located.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

Three recent state-level actions – a legislative bill and two state Supreme Court decisions – could affect how natural gas wells are sited and taxed. Earlier this week, state Rep. Bill DeWeese, D-Greene County, proposed a bill to tax underground gas deposits by adding their assessed values to property taxes. The driller would pay, and the tax revenue would, for the first year, be used to reduce the municipality’s millage to equal the previous year’s tax revenue. The millage – a dollar tax on every $1,000 of assessed property value – could be increased in subsequent years.

“If a municipality needs the same amount of money as last year, then yes, the millage would go down. But, the reality is they’re probably going to keep ours the same and get more money from them (the drillers),” said Marianne Rexer, a business professor at Wilkes University.

The bill is in response to a 2002 state Supreme Court decision that no law exists to tax natural gas, as there does to tax coal and other minerals.

Stephen Rhoads, president of the Pennsylvania Oil and Gas Association, said the tax wasn’t utilized by many counties before, and “it is a false hope that this is going to bring a revenue stream to counties and school districts any time soon.”

The state Supreme Court ruled in February on two western Pennsylvania cases regarding municipalities’ rights to restrict drilling.

In one case, the court found municipalities can’t control where drilling infrastructure is permitted, as that would interfere with regulations already promulgated in the state Oil and Gas Act.

But they can indicate in which zoning districts drilling may be allowed “in recognition of the unique expertise of municipal governing bodies to designate where different uses should be permitted in a manner that accounts for the community’s development objectives,” the court’s opinion states in the other case.

The ruling might not have much effect in the Northeastern Pennsylvania municipalities of interest to drillers. Many don’t have zoning ordinances, and others, such as Fairmount Township in northwest Luzerne County, want less restrictive ones.

Several landowners have sought drilling leases, township Supervisor David Keller said, and he has no interest in restricting their options. The township now yields to the county’s Planning and Zoning office, but Keller said the township is looking into writing its own zoning ordinance because “it would give us more leeway to let people do more with their property as they see fit.”

Copyright: Times Leader