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House of Representatives
Session of 2013 - 2014 Regular Session


Posted: December 20, 2012 02:33 PM
From: Representative Deberah Kula
To: All House members
Subject: Legislation Providing for a County Assessment on Oil and Gas


TO: All House Members

FROM: Representative Deberah Kula

DATE: December 20, 2012

RE: Legislation Providing for a County Assessment on Oil and Gas

In the near future, I will be introducing legislation that would amend Title 53 (Municipalities Generally) of the Pennsylvania Consolidated Statutes to permit counties to assess value to oil and gas. These resources would be subject to taxation as real estate for all county, city, borough, town, township, and school district purposes. The state would not receive any revenue under this legislation.

Unfortunately, on December 19, 2002, 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 oil and gas as a taxable interest. This legislation would correct that oversight, benefiting counties, local municipalities, school districts, and their taxpayers. The additional revenue that the local entities would receive would help prevent future tax increases.

It is important to note that mineral rights would be assessed and taxed separately from the surface property. The value would be assessed against the drilling companies that are producing oil and gas for commercial benefit, not the landowner on whose property the wells are located. This legislation would not reduce any royalty payments to individuals currently under mineral leases. In addition, oil and gas producers would not be able to recover any portion of the tax from the royalty owner through deduction, reallocation, or any other means.

This is a top priority for local governments impacted by Marcellus Shale drilling and would address many of the funding issues they face during these hard economic times.

Introduced as HB33