Two bills before the Kentucky House of Representatives would change the way the state taxes coal that’s left in the ground. They would give exemptions to mineral rights owners if the coal isn’t going to be mined soon.
This “unmined minerals tax” adds up to a substantial amount: in 2014, Kentucky collected more than $39 million. Most of that—$34 million—went to the individual counties where the minerals are. The remainder went to the state.
But when it’s not economical to mine the coal, mineral rights owners are still stuck paying the taxes on coal that may never be extracted. That’s why legislators have introduced separate bills to change that tax.
But if either bill passes, the effects will be felt in coal-producing counties. Last year, the unmined minerals tax brought in $700,000 to Harlan County. Judge-Executive Dan Mosely says his county can’t afford to lose the revenue. “The old saying, ‘kick a horse while it’s down,’ that would certainly apply in this case because we’re relying on that revenue,” Mosely said.
Both bills have been referred to committee.
