mineral rights question

[troutbert]

Does anyone have actual examples of eminent domain being used to acquire mineral rights?

 

[tomgamber]

Isn't Eminent Domain a purely government function. Can private industries use ED? I have seen gov'ts use it to aquire land and then lease or sell it to private enterprise (stadiums) but is it really supposed to work?

 

[osprey]

For the third time now.......go to you tube search Clearville Pa Eminenet Domain , first they built a natural gas storage facility and then came the drills , not for "the public good" but for a publicly owned company to get rich on.

 

[JackM]

Here is just one example of a public taking for the purpose of facilitating private development:

http://www.thefreemanonline.org/featured/beyond-eminent-domain/

 

[bikerfish]

Where it gets difficult is when the two properties infringe upon one another, as Jack was saying. Jack, mineral rights owners do have a "right" to access their minerals from the surface. The law states something about "reasonable" concessions, it really likes the term "reasonable", so they make it a really gray area. They cannot, for instance, tear down a house or other improved property to put up a gas rig, that infringes upon the right of the surface owner. But if you have a nice, unimproved woodlot behind the house that is not "in use", the mineral rights owner can use that land, so long as they take "reasonable" precautions to prevent disturbance to the surface landowners rights as much as possible

exactly, say you have a nice 20 acre parcel of woods, which to me is priceless these days, the gas company can and will clear cut what they need to put in a drilling rig. bye bye nice quiet woods.
I'd rather they tear down the house! a new one can be built in a year, takes a lifetime to build a forest

 

[bikerfish]

I watched the video opsrey, scary stuff, only the beginning I'm afraid.
our new governor isn't going to be helping matters.
my girlfriend and I are honestly considering moving out of the area, get away from the entire marcellus region, and live somewhere where quality of life is more valuable than money.

 

[mrflyfish]

Let's get back on topic.
"Are mineral rights taxed at the local or state level?"
Taxing them Looks to me like a good way to balance local and state budgets.
With Gas underneath, the property must be worth more.
I guess that is were the excise tax comes in. It could be a boon for the government entities that are facing hard times in balancing their budgets.

 

[JackM]

With the duest of respect, mrflyfish, you also failed to answer the question posed. Back on topic: I don't know.

 

[bikerfish]

how would you be able to assess a value before any gas is extracted? how would you know if there is a large deposit or not without drilling for it? I don't know how one would be able to fairly tax just the rights, unless it's simply a certain amount per acre, regardless of what's underneath. maybe they already do that, I don't know.

 

[bikerfish]

Let's get back on topic.

oh come on now, how long have you been around here!! we're lucky if we get 3 posts into a topic before we're talking about something totally different. maybe we all have ADD!!!
sorry, couldn't resist.
back to taxation!

 

[pcray1231]

http://www.lexisnexis.com/Community/emergingissues/blogs/oilgasandenergylaw/archive/2010/04/07/real-property-taxation-of-oil-gas-and-mineral-interests-in-pennsylvania.aspx

I don't claim to be a lawyer, so I dunno. My personal take on this (and it could be wrong) is:

Minerals are taxed along with regular real estate taxes. They are taken into account during the assessment of a property, and rolled into the real estate taxes paid by the owner. Thus, if you have minerals below your land, and you are not the mineral rights owner, you're assessment is somewhat lower than if you were the mineral rights owner. Further, if you have and own the mineral rights, and put in equipment to extract it, that equipment is an improvement to the property and thus can be reflected in the assessment.

This is all well and good for traditional minerals like coal, limestone, etc. But the question arose to whether it fits for oil and gas. The PA Supreme Court said no. Oil and gas are not "land", they are liquid/gas and thus can move from property to property. They are not part of your property and not included in property assessments, nor would the equipment for extraction be included. This ruling led to a debate on whether to rewrite the law to include oil and gas, and I don't know where that stands.

That said, if the gas company leases land for oil and gas and makes a profit, that profit is indeed taxed as income. Likewise, if the property owner recieved money for the lease and/or royalties from the sale of oil and gas, that is also income and taxed as such.

 

[mrflyfish]

Ok, so..........I guess there will be no taxes on the gas. Up here NWPA after the 1980's gas drilling boom there was a lot of bankruptcies filed buy these companies.
With the new Gov saying no new taxes. We the little people are in for a smaller pocket books.
ADD>>>

 

[pcray1231]

I guess there will be no taxes on the gas.

Incorrect. Well, there may or may not be NEW taxes on the gas, that debate is still going. As it currently stands, gas sitting in the ground undisturbed is not taxed as real estate. That may or may not change. Extraction of said gas IS currently taxed for all parties that profit from it. This tax rate may stay the same or increase.

 

[osprey]

Our "NEW GOV" in his ultimate wisdom chose not to invoke an extraction tax like every other state did , i even saw an interview of a gas company spokesperson , some gal , who was actually surprised and said it was already in their budget!!!!! We should dip his azz in frack water.