H. B. 3101

         (By Delegates Hartman, Michael, Perry, Evans,

                   Azinger and Williams)

         [Introduced February 11, 2011; referred to the

         Committee on Finance.]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-13A-4a, relating to clarifying the intent of the Legislature as to the measure of tax imposed on a person who produces timber and saws, mills or otherwise manufactures it into green lumber; requiring the producer to report twenty-five percent of the gross proceeds from the sale of the green lumber for severance tax purposes; permitting the change in tax be retroactive to 1993; and defining the term “green lumber.”

Be it enacted by the Legislature of West Virginia:

    That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §11-13A-4a, to read as follows:

ARTICLE 13A. SEVERANCE AND BUSINESS PRIVILEGE TAX ACT.

§11-13A-4a. Measure of tax on integrated producer and processor              of timber products.

    (a) Definition. -– For purposes of this section, the term “green lumber” means boards of wood that have been sawed from one or more species of logs into various lengths, widths and thicknesses but have not undergone any further processing, including, but not limited to, drying in a dry kiln or otherwise.

    (b) Legislative intent and retroactive effect. –- This section clarifies the intent of the Legislature as to the measure of tax imposed by this article on a person who produces timber and saws, mills or otherwise manufactures it into green lumber or other wood products for sale, profit or commercial use. This clarification applies retrospectively to the effective date of section three-b of this article during the First Extraordinary Session of the Legislature in the year 1993.

    (c) Measure of tax on integrated producer-processor. -–

    (1) A person who produces timber and saws, mills or otherwise manufactures the timber into green lumber for sale, profit or commercial shall report twenty-five percent of the persons’s gross proceeds from the sale of the green lumber as the value subject to tax under section three-b of this article.

    (2) A person who produces timber and saws, mills or otherwise manufactures the timber into green lumber but does not sell the green lumber and further processes or manufactures the green lumber, including, but not limited to, drying in a dry kiln or otherwise shall report twenty-five percent of the value of the green lumber before further processing or manufacturing as the value subject to tax under section three-b of this article. This value shall be determined according to section two of this article applicable to determining the value of similar green lumber in the area of the saw mill, or by use of data contained in regularly published independent market reports of the current, arms-length sale of similar green lumber in the area of the saw mill. In no event may any value added to green lumber by any further processing or manufacturing, including, but not limited to value added by drying the green lumber in a dry kiln, or otherwise, be included in the measure of tax for purposes of the tax imposed by section three-b of this article.

    NOTE: The purpose of this bill is to clarify the intent of the Legislature as to the measure of tax imposed on a person who produces timber and saws, mills or otherwise manufactures it into green lumber. The bill requires the producer to report twenty-five percent of the gross proceeds from the sale of the green lumber for severance tax purposes. The bill permits the change in tax be retroactive to 1993. The bill also defines the term “green lumber.”

    This section is new; therefore, it has been completely underscored.