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FOR IMMEDIATE RELEASE |
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Majority
Whip Bill DeWeese |
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DeWeese seeks to keep homeowner property taxes low
HARRISBURG, March 9 – In an effort to help counties, municipalities and school districts with their budgets, state Rep. Bill DeWeese is introducing legislation that would allow counties to assess value to natural gas, oil and coal-bed methane.
"The polling data is clear: Pennsylvanians are overwhelmingly against allowing counties to increase their sales tax by 1 percent," DeWeese said. "However, like the Commonwealth, local governments are facing budget shortfalls and need assistance for their coffers. I believe the burgeoning natural gas drilling industry that is rampant across the state can provide that financial aid without a cost to local taxpayers.
"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 DeWeese, D-Greene/Fayette/Washington.
DeWeese said that before Dec. 19, 2002, these natural resources were being taxed at the local level, similar to the way coal and other mineral resources are assessed. 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."
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.
DeWeese said nearly every state taxes natural resources; therefore allowing such an assessment at the county level would not drive the drilling companies to neighboring states. In fact, the president of the Pennsylvania Oil and Gas Association recently was quoted as saying such an assessment would not drive companies out of state.
The legislation is supported by the County Commissioners Association of Pennsylvania, Pennsylvania State Association of Township Supervisors, Pennsylvania State Association of Boroughs and Pennsylvania School Boards Association.
Recent technological advances, which have provided the ability to extract from the Marcellus Shale natural gas formation, vastly increased estimates for the assessed value of gas and oil in Pennsylvania from between $10 billion and $20 billion, to closer to $1 trillion.
The Marcellus Shale underlies approximately 2/3 of the Commonwealth (54 of 67 counties) and portions of New York, West Virginia and Ohio at a depth of 5,000 to 8,000 feet and is believed to hold trillions of cubic feet of natural gas.
Penn State University geoscientist Dr. Terry Engelder recently told those attending the first Pennsylvania Natural Gas Summit in State College that there are 363 trillion cubic feet of recoverable gas in the Marcellus Shale, enough to supply all of the nation's natural gas needs for 14 years.
DEP said the total number of all well permits granted in 2008, which includes gas, oil and coal bed methane totaled 7,927. It expects to issue more than 11,000 permits in 2009, creating thousands of associated jobs. In 2008, DEP issued 451 drilling permits for Marcellus Shale.
"On behalf of hardworking, taxpaying local property owners throughout the Commonwealth, as well as county commissioners, municipal officials and school board members who face difficult budgets, I am proud to introduce this legislation, to ensure that everyone pays their fair share of property taxes and doesn’t push off the burden to others," he said.
House Bill 10 has 28 co-sponsors.
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