Senate Bill No. 132
(By Senators Chafin, Stollings, Green and Fanning)
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[Introduced February 11, 2009; referred to the Committee on
Finance.]
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A BILL to amend and reenact §11-13A-5a of the Code of West
Virginia, 1931, as amended, relating to dedicating a portion
of revenue generated from severance taxes for the benefit of
counties and municipalities; creating fund; and providing
permissible uses for fund.
Be it enacted by the Legislature of West Virginia:
That §11-13A-5a of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 13A. SEVERANCE TAXES.
§11-13A-5a. Dedication of five percent of severance taxes;
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;
rules; special funds in the office of State
Treasurer; methods and formulae for distribution
of such dedicated tax; expenditure of funds by
counties and municipalities for public purposes;
and requiring special county and municipal budgets
and reports thereon.
(a) Effective July 1, 2009, five percent of every $1 million
of the tax annually generated from severance taxes imposed by
sections three-a, three-b, three-c and three-e of this article is
dedicated for the use and benefit of the counties and
municipalities from which those taxes were generated and shall be
distributed to each county and municipality as provided in this
section. The remaining funds attributable to those taxes shall be
distributed as provided in this section.
(a) (b) Effective July 1, 1996, five percent of the tax
attributable to the severance of oil and gas imposed by section
three-a of this article is hereby dedicated for the use and benefit
of counties and municipalities within this state and shall be
distributed to the counties and municipalities as provided in this
section. Effective July 1, 1997, and thereafter, ten percent of
the tax attributable to the severance of oil and gas imposed by
section three-a of this article is hereby dedicated for the use and
benefit of counties and municipalities within this state and shall be distributed to the counties and municipalities as provided in
this section.
(b) (c) seventy-five percent of this dedicated tax shall be
distributed by the State Treasurer in the manner specified in this
section to the various counties of this state in which the oil and
gas upon which this additional tax is imposed was located at the
time it was removed from the ground. Those counties are referred
to in this section as the "oil and gas producing counties." The
remaining twenty-five percent of the net proceeds of this
additional tax on oil and gas shall be distributed among all the
counties and municipalities of this state in the manner specified
in this section.
(c) (d) 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) (h) 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.
(e) In order to provide a procedure for the distribution of
the five percent of every $1 million of the tax annually generated
from severance taxes imposed by sections three-a, three-b, three-c
and three-e of this article, as provided in subsection (a) of this section,
a special fund known as the County Severance Revenue Fund
is established. The moneys in the funds shall be distributed to
the respective counties and municipalities entitled to the moneys
at the direction of the Legislature for the purposes of
infrastructure, recreation or senior services.
(d) (f) In order to provide a procedure for the distribution
of the remaining seventy-five percent of the dedicated tax on oil
and gas to the oil and gas producing counties, the special fund
known as the Oil and Gas County Revenue Fund established in the
State Treasurer's office by chapter two hundred forty-two, Acts of
the Legislature, regular session, 1995, as amended and reenacted in
the subsequent Act of the Legislature, is hereby continued. In
order to provide a procedure for the distribution of the remaining
twenty-five percent of the dedicated tax on oil and gas to all
counties and municipalities of the state, without regard to oil and
gas having been produced in those counties or municipalities, the
special fund known as the All Counties and Municipalities Revenue
Fund established in the State Treasurer's office by chapter two
hundred forty-two, Acts of the Legislature, regular session, 1995,
as amended and reenacted in the subsequent Act of the Legislature,
is hereby redesignated as the All Counties and Municipalities Oil
and Gas Revenue Fund and is hereby continued.
Seventy-five percent of the dedicated tax on oil and gas shall
be deposited in the Oil and Gas County Revenue Fund and twenty-five percent of the dedicated tax on oil and gas shall be deposited in
the All Counties and Municipalities Oil and Gas Revenue Fund, from
time to time, as the proceeds are received by the Tax Commissioner.
The moneys in the funds shall be distributed to the respective
counties and municipalities entitled to the moneys in the manner
set forth in subsection (e) (g) of this section.
(e) (g) The moneys in the Oil and Gas County Revenue Fund and
the moneys in the All Counties and Municipalities Oil and Gas
Revenue Fund shall be allocated among and distributed annually to
the counties and municipalities entitled to the moneys by the State
Treasurer in the manner specified in this section. 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
to the moneys on that distribution date. The amount to which an
oil and gas producing county is entitled from the Oil and Gas
County Revenue Fund shall be determined in accordance with
subsection (f) (h) of this section and the amount to which every
county and municipality shall be entitled from the All Counties and
Municipalities Oil and Gas Revenue Fund shall be determined in
accordance with subsection (g) (i) of this section. After
determining, as set forth in subsections (f) and (g) (h) and (i) 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 the county or municipality shall
issue and a check drawn thereon making payment of the sum shall
thereafter be distributed to the county or municipality.
(f) (h) 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) In the case of moneys derived from tax on the severance of
gas:
(A) Dividing the total amount of moneys in the fund derived
from tax on the severance of gas then available for distribution by
the total volume of cubic feet of gas extracted in this state
during the preceding year; and
(B) Multiplying the quotient thus obtained by the number of
cubic feet of gas taken from the ground in the county during the
preceding year; and
(2) In the case of moneys derived from tax on the severance of
oil:
(A) Dividing the total amount of moneys in the fund derived
from tax on the severance of oil then available for distribution by
the total number of barrels of oil extracted in this state during
the preceding year; and
(B) Multiplying the quotient thus obtained by the number of
barrels of oil taken from the ground in the county during the
preceding year.
(g) (i) The amount to which each county and municipality is
entitled from the All Counties and Municipalities Oil and Gas
Revenue Fund shall be determined in accordance with the provisions
of this subsection. For purposes of this subsection, "population"
means 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 Oil and Gas
Revenue Fund by multiplying the total amount in the 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 is the county's "base share".
(2) Each county's base share shall then be subdivided into two
portions. One portion is 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 is 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 the latter portion to which each municipality in
the county is entitled shall be determined by multiplying the total
of the 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) (j) 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 purposes as the county commission or
governing body shall determine to be in the best interest of its
respective county or municipality: Provided, That in counties with
population in excess of $2,000, at least seventy-five percent of
the funds received from the oil and gas county revenue fund shall
be apportioned to and expended within the oil and gas producing
area or areas of the county, the oil and gas producing areas of
each county to be determined generally by the State Tax
Commissioner: Provided, however, That the moneys distributed to
any county or municipality under the provisions of this section
shall not be budgeted for personal services in an amount to exceed
one fourth of the total amount of the moneys.
(i) (k) On or before March 28, 1997, and each March 28
thereafter, each county commission or governing body of a
municipality receiving any such moneys shall submit to the Tax
Commissioner on forms provided by the Tax Commissioner a special
budget detailing how the moneys are to be spent during the
subsequent fiscal year. The budget shall be followed in expending the moneys unless a subsequent budget is approved by the State Tax
Commissioner. All unexpended balances remaining in the County or
Municipality General Fund at the close of a fiscal year shall
remain in the General Fund and may be expended by the county or
municipality without restriction.
(j) (l) On or before December 15, 1996 and each December 15
thereafter, the Tax Commissioner shall deliver to the Clerk of the
Senate and the Clerk of the House of Delegates a consolidated
report of the budgets, created by subsection (i) of this section,
for all county commissions and municipalities as of July 15 of the
current year.
(k) (m) The State Tax Commissioner shall retain for the
benefit of the state from the dedicated tax attributable to the
severance of oil and gas the amount of $35,000 annually as a fee
for the administration of the additional tax by the Tax
Commissioner.
NOTE: The purpose of this bill is to dedicate five percent of
every $1 million of certain severance taxes for the use and benefit
of the counties and municipalities from which those taxes were
generated.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.