ENROLLED
Senate Bill No. 78
(By Senator Craigo)
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[Passed February 14, 1996; in effect from passage.]
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AN ACT to amend and reenact section five-a, article thirteen-a,
chapter eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to dedication of oil
and gas severance tax for benefit of counties and
municipalities; distribution of dedicated tax; promulgation of
rules; creation of special funds; methods and formulae for
distribution of the dedicated tax; expenditure of funds by
counties and municipalities; and requirements for special
budgets and reports.
Be it enacted by the Legislature of West Virginia:
That section five-a, article thirteen-a, chapter eleven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted 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; rules; creation of 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 the first day of July, one thousand nine hundred
ninety-six, 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 the first
day of July, one thousand nine hundred ninety-seven, 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) Seventy-five percent of this dedicated tax shall, after
appropriation of the tax by the Legislature, 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, after appropriation, among all
the counties and municipalities of this state in the manner
specified in this section.
(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 the dedicated tax on oil and gas to the oil
and gas producing counties, there is hereby created in the state treasurer's office the special fund 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 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, there is also hereby created in the
state treasurer's office the special fund known as the "all
counties and municipalities revenue fund".
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 revenue fund", from time to
time, as the proceeds are received by the tax commissioner. The
moneys in the funds shall, after appropriation of the moneys by the
Legislature, be distributed to the respective counties and
municipalities entitled to the moneys in the manner set forth in
subsection (e) of this section.
(e) The moneys in the "oil and gas county 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 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) 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
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) 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) The amount to which each county and municipality is
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" 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 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) 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 two hundred thousand 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) On or before the twenty-eighth day of March, one thousand
nine hundred ninety-seven, and each twenty-eighth day of March
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) On or before the fifteenth day of December, one thousand
nine hundred ninety-six, and each fifteenth day of December
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 the fifteenth
day of July of the current year.
(k) 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 thirty-five thousand dollars annually as
a fee for the administration of the additional tax by the tax
commissioner.