Most of the bills introduced about hydrofracking and gas drilling are amendments to the Environmental Conservation law, and travel through the Environmental Conservation committees. However, gas drilling has impacts on other kinds of laws, too. For instance, part of the reason that some gas-leased landowners are in such a hurry to get permits in place and start drilling is that, with a lease in place but no production cash coming in, they may be paying an elevated level of property taxes based on the escalating cost of land without buildings on it in their neighborhood, in anticipation of gas profits. Property tax assessments in an area are based upon the value of the property, as determined by sales of comparable properties in the area. If there is speculative money running up the value of the land, people who have owned land there for a long time may find that their taxable value in that land is rising precipitously, and, with that, their taxes are skyrocketing.
Senator O’Mara’s bill, S4857A, amends the Real Property Tax law to clarify that tax assessors may only base their assessments on the use value of the property. That means that, if the land is farmed, they may not compare its value to a farm property that has an operational gas well on it, just because the property has a current gas lease on it. As soon as there is a gas well on the property, of course, the assessment can rise to reflect that use. But, this bill would take the pressure off of landowners somewhat, in that they would not be paying extra taxes in advance of actual gas development. Of course, the higher prices paid by speculators for land will drive up raw land values somewhat, even with such a law in place.
There has been movement on this bill in the Senate– it has advanced to the third reading, and has been amended to match the Assembly version, sponsored by majority caucus member Lupardo (A7494B). If this bill were to get out of committee in the Assembly, it could be moved in both houses yet this session.