Two bills before the Kentucky House would change the way the state taxes coal that’s left in the ground.
The “unmined minerals tax” applies to minerals such as coal, gas, oil and limestone that aren’t currently being extracted.
The owner of the mineral rights pays taxes to the state every year. And that adds up to a substantial amount: In 2014, Kentucky collected more than $39 million from this tax. Most of that — $34 million — went to the individual counties where the minerals are. The remainder went to the state.
But with the decline of the coal industry, less coal is being mined in Eastern Kentucky. And when it’s not economical to mine the coal, mineral rights owners are still stuck paying taxes on coal they may never extract.
That’s why two Eastern Kentucky legislators — Democratic state Reps. Fitz Steele and John Short — have introduced separate bills to change that tax.