ENGROSSED
H. B. 4177
(By Delegates Stowers, Stephens, Eldridge,
Butcher, Phillips, Hall, Barker and White)
[Introduced January 26, 2010; referred to the
Committee on Finance.]
A BILL to amend and reenact §11-13A-5a of the Code of West
Virginia, 1931, as amended, relating to dedicating five
percent of coal severance tax to the county of origin and
providing permissible uses for the moneys.
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 AND BUSINESS PRIVILEGE TAX ACT.
§11-13A-5a.
Dedication of five percent of severance tax for
benefit of counties of origin; expenditures of
funds; 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, 2010, five percent of the tax
attributable to the severance of coal imposed by section three of
this article is dedicated for the use and benefit of counties from
which those taxes were generated and shall be distributed to each
county as provided in this section. For purposes of this
subsection, the tax attributable to the severance of coal imposed
by section three of this article does not include the thirty-five
one hundredths of one percent additional severance tax on coal
imposed by the state for the benefit of counties and municipalities
as provided in section six of this article. The five percent shall
be distributed by the state Treasurer in the manner specified in
this section to the various counties of this state in which the
coal upon which tax imposed by section three of this article is
imposed was located at the time it was removed from the ground.
The moneys shall be distributed to the county commissions and used
only for:
(1) Economic development;
(2) Infrastructure;
(3) Job creation; and
(4) Road repair.
(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 the 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 the tax attributable to the severance of coal
imposed by section three of this article, a special fund known as
the "County Severance Revenue Fund" is established. The moneys in
the fund shall be distributed to the respective county entitled to
the moneys at the discretion of the Legislature for the purposes
provided in section (a).
(d) (f) 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, the special fund known as the oil
and gas county revenue fund established in 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 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 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) (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) (k) 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
the coal severance tax to the counties where the coal was located
at time it was removed from the ground, upon which the coal
severance tax is based. It provides that the five percent will go
to the county commissions, and provides specific uses for the
money.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.