Senate Bill No. 207
(By Senators Craigo, Blatnik, White, Sharpe, Dittmar, Jackson, Manchin, Chafin, Wooton, Boley, Ross, Deem, Kimble, Scott, Bowman, Buckalew, Schoonover, Wiedebusch, Walker, Tomblin, Mr. President, Wagner, Plymale and Minear)
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[Introduced January 30, 1995; referred to the Committee
on Finance.]
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A BILL to amend article thirteen-a, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section five-a, relating to dedicating ten percent of the oil and gas severance tax for the benefit of counties and municipalities.

Be it enacted by the Legislature of West Virginia:
That article thirteen-a, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section five- a, to read as follows:

ARTICLE 13A. SEVERANCE TAXES.

§11-13A-5a. Dedication of ten percent of oil and gas severance

tax for benefit of counties and municipalities; distribution of major portion of such dedicated tax to oil and gas producing counties; distribution of minor portion of such dedicated tax to all counties and municipalities; reports and rules; creation of special funds in office of state treasurer; methods and formulae for distribution of such dedicated tax; expenditure of funds by counties and municipalities for public purposes.

(a) Effective the first day of July, one thousand nine hundred ninety-six and thereafter, ten percent of the tax attributable to the severance of oil and gas imposed by section three of this article is hereby dedicated for the use and benefit of counties and municipalities within this state and shall be distributed to such counties and municipalities as hereinafter provided.
(b) Seventy-five percent of this dedicated tax shall, after appropriation thereof by the Legislature, be distributed by the state treasurer in the manner hereinafter specified to the various counties of this state in which the oil and gas upon which this dedicated tax is imposed was located at the time it was removed from the ground. Those counties are hereinafter in this section referred to as the "oil and gas producing counties." The remaining twenty-five percent of this dedicated tax on oil and gas shall be distributed, after appropriation, among all the counties and municipalities of this state in the manner hereinafter specified.
(c) The tax commissioner is hereby granted plenary power and authority to promulgate reasonable rules requiring the furnishing by oil and gas producers of such additional information as may be necessary to compute the allocation required under the provisions of subsection (f) of this section. The tax commissioner is also hereby granted plenary power and authority to promulgate such other reasonable rules as may be necessary to implement the provisions of this section.
(d) In order to provide a procedure for the distribution of seventy-five percent of such dedicated tax on oil and gas to such oil and gas producing counties, there is hereby created in the state treasurer's office a special fund to be known as the "oil and gas county revenue fund"; and in order to provide a procedure for the distribution of the remaining twenty-five percent of such dedicated tax on oil and gas to all counties and municipalities of the state, without regard to oil and gas having been produced therein, there is also hereby created in the state treasurer's office a special fund to be known as the "all counties and municipalities revenue fund."
Seventy-five percent of such dedicated tax on oil and gas shall be deposited in the "oil and gas county revenue fund" and twenty-five percent of such dedicated tax on oil and gas shall be deposited in the "all counties and municipalities revenue fund," from time to time, as such proceeds are received by the tax commissioner. The moneys in such funds shall, after appropriation thereof by the Legislature, be distributed to the respective counties and municipalities entitled thereto in the manner set forth in subsection (e) of this section.
(e) The moneys in the "county oil and gas revenue fund" and the moneys in the "all counties and municipalities revenue fund" shall be allocated among and distributed annually to the counties and municipalities entitled thereto by the state treasurer in the manner hereinafter specified. On or before each distribution date, the state treasurer shall determine the total amount of moneys in each fund which will be available for distribution to the respective counties and municipalities entitled thereto on that distribution date. The amount to which an oil and gas county is entitled from the "oil and gas county revenue fund" shall be determined in accordance with subsection (f) of this section, and the amount to which every county and municipality shall be entitled from the "all counties and municipalities revenue fund" shall be determined in accordance with subsection (g) of this section. After determining as set forth in subsections (f) and (g) of this section the amount each county and municipality is entitled to receive from the respective fund or funds, a warrant of the state auditor for the sum due to such county or municipality shall issue and a check drawn thereon making payment of such sum shall thereafter be distributed to each county or municipality.
(f) The amount to which an oil and gas-producing county is entitled from the "oil and gas county revenue fund" shall be determined by:
(1) Dividing the total amount of moneys in such fund then available for distribution by the total volume of cubic feet of gas, or barrels of oil extracted in this state during the preceding year; and
(2) Multiplying the quotient thus obtained by the number of cubic feet of gas or barrels of oil, or both, taken from the ground in such county during the preceding year.
(g) The amount to which each county and municipality shall be entitled from the "all counties and municipalities revenue fund" shall be determined in accordance with the provisions of this subsection. For purposes of this subsection "population" shall mean the population as determined by the most recent decennial census taken under the authority of the United States:
(1) The treasurer shall first apportion the total amount of moneys available in the "all counties and municipalities revenue fund" by multiplying the total amount in such fund by the percentage which the population of each county bears to the total population of the state. The amount thus apportioned for each county shall be the county's "base share."
(2) Each county's "base share" shall then be subdivided into two portions. One portion shall be determined by multiplying the "base share" by that percentage which the total population of all unincorporated areas within the county bears to the total population of the county, and the other portion shall be determined by multiplying the "base share" by that percentage which the total population of all municipalities within the county bears to the total population of the county. The former portion shall be paid to the county and the latter portion shall be the municipalities' portion of the county's "base share." The percentage of such latter portion to which each municipality in the county is entitled shall be determined by multiplying the total of such latter portion by the percentage which the population of each municipality within the county bears to the total population of all municipalities within the county.
(h) Moneys distributed to any county or municipality under the provisions of this section, from either or both special funds, shall be deposited in the county or municipal general fund and may be expended by the county commission or governing body of the municipality for such public purposes as the county commission or governing body shall determine to be in the best interest of the people of its respective county or municipality: Provided, That in counties with population in excess of two hundred thousand, at least seventy-five percent of such funds received from the "oil and gas county reserve fund" shall be apportioned to, and expended within the oil and gas producing areas of each county to be determined generally by the state tax commissioner. Provided, however, That in no case shall the moneys distributed under the provisions of subsection (f) of this section be expended for the payment of wages to or the salary of any county or municipal officer or employee.

NOTE: The purpose of this bill is to dedicate ten percent of the oil and gas severance tax for the benefit of counties and municipalities effective July 1, 1996.

This section is new; therefore, strike-throughs and underscoring have been omitted.