SENATE CONCURRENT RESOLUTION NO. 58

(By Senators Browning, Klempa, Prezioso, McCabe, Stollings, Wells, Williams and Sypolt)

[Originating in the Committee on Economic Development]

Requesting the Joint Committee on Government and Finance to study the advisability of establishing an Economic Diversification Permanent Fund using revenue collected from mineral severance taxes.

    Whereas, A severance tax permanent fund can convert depleting natural resources into a source of support for sustainable economic diversification for West Virginia communities today and in the future; and

    Whereas, In its bond rating process, Moody’s Investor Services recently identified West Virginia’s above average concentration of economic in the natural resource industry as a weakness; and

    Whereas, As severance tax permanent fund can help to regulate the fluctuations of West Virginia’s natural resource economy’s boom-bust cycle; and

    Whereas, Other natural resource-rich states including New Mexico, Wyoming, Colorado, Alaska and Montana successfully enacted legislation in the 1970s and 1980s to establish severance tax permanent funds; and

    Whereas, These states have created funds with principle endowments ranging in size from more than $37 billion in Alaska to approximately $800 million in Montana; and

    Whereas, Through investment of these funds according to the “prudent investor rule” has earned investment income available for growing the fund and inflation-proofing it; and

    Whereas, The above-named states have also used investment earnings from such permanent severance tax trust funds to finance state education, infrastructure repair, dividend payments to taxpayers, economic development, and general fund expenditures; and

    Whereas, The principle of severance tax permanent funds represents a state asset that could potentially strengthen West Virginia’s bond rating; therefore, be it

    Resolved by the Legislature of West Virginia:

    That the Joint Committee on Government and Finance is hereby requested to study the advisability of establishing an Economic Diversification Permanent Fund using revenue collected from mineral severance taxes; and, be it

    Further Resolved, That the expenses necessary to conduct this study, to prepare a report and to draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance.