H. B. 4041
(By Mr. Speaker, (Mr. Thompson))
[By Request of the Executive]
[Introduced January 14, 2008; referred to the
Committee on Finance.]
A BILL to amend and reenact §11-13A-3d and §11-13A-20a of the Code
of West Virginia, 1931, as amended; to amend said code by
adding thereto a new section, designated §11-13A-3f; and to
amend said code by adding thereto a new section, designated
§11-13V-4a, all relating to natural gas and coalbed methane
production; Severance and Business Privilege Tax Act and the
Workers' Compensation Debt Reduction Act; specifying
termination of the Severance and Business Privilege Tax
exemption for production of coalbed methane and specifying
that coalbed methane is taxed as natural gas for purposes of
the Severance and Business Privilege Tax Act and for purposes
of the taxes imposed by the Workers' Compensation Debt
Reduction Act; specifying dedication of tax, providing
effective dates; specifying application of exemption with
relation to existing exemption entitlements.
Be it enacted by the Legislature of West Virginia:
That §11-13A-3d and §11-13A-20a
, of the Code of West Virginia,
1931, as amended, be amended and reenacted; that said code be
amended by adding thereto a new section, designated §11-13A-3f; and
that said code be amended by adding thereto a new section,
designated §11-13V-4a, all to read as follows:
ARTICLE 13A. SEVERANCE AND BUSINESS PRIVILEGE TAX ACT.
§11-13A-3d. Imposition of tax on privilege of severing coalbed
methane.
(a) The Legislature hereby finds and declares the following:
(1) That coalbed methane is underdeveloped and an
under-utilized resource within this state which, where practicable,
should be captured and not be vented or wasted;
(2) The health and safety of persons engaged in coal mining is
a paramount concern to the state. The Legislature intends to
preserve coal seams for future safe mining, to facilitate the
expeditious, safe evacuation of coalbed methane from the coalbeds
of this state, and to ensure the safety of miners by encouraging
the advance removal of coalbed methane;
(3) The United States Environmental Protection Agency's
coalbed methane outreach program encourages United States coal
mines in the United States to remove and use methane that is
otherwise wasted during mining. These projects have important economic benefits for the mines and their local economies while
they also reduce emissions of methane; and
(4) The initial costs of development of coalbed methane wells
can be large in comparison to conventional wells and deoxygenation
and water removal increase development expenditures.
The Legislature, therefore, concludes that an incentive to coalbed
methane development should be implemented to encourage capture of
methane gas that would otherwise be vented to the atmosphere.
(b)
Imposition of tax. -- In lieu of the annual privilege tax
imposed on the severance of natural gas or oil pursuant to section
three-a, article thirteen-a, for the privilege of engaging or
continuing within this state in the business of severing coalbed
methane for sale, profit or commercial use, there is hereby levied
and shall be collected from every person exercising such privilege
an annual privilege tax:
Provided, That effective for taxable
years beginning on or after the first day of January, two thousand
one, there is an exemption from the imposition of the tax provided
for in this article for a maximum period of five years for all
coalbed methane produced from any coalbed methane well placed in
service after the first day of January, two thousand. For purposes
of this section, the terms "coalbed methane" and "coalbed methane
well" have the meaning ascribed to them in section two, article
twenty- one, chapter twenty-two of this code. The exemption from
tax provided by this section is applicable to any coalbed methane well placed in service before the first day of January, two
thousand eleven.
(c)
Rate and measure of tax. -- The tax imposed on subsection
(b) of this section is five percent of the gross value of the
coalbed methane produced, as shown by the gross proceeds derived
from the sale thereof by the producer, except as otherwise provided
in this article.
(d)
Tax in addition to other taxes. -- The tax imposed by this
section applies to all persons severing coalbed methane in this
state, and is in addition to all other taxes imposed by law.
(e) Except as specifically provided in this section,
application of the provisions of this article apply to coalbed
methane in the same manner and with like effect as the provisions
apply to natural gas.
(f) Notwithstanding any other provision of this code to the
contrary, on and after the first day of January, two thousand
eight, the provisions of this section are null and void and of no
force or effect: Provided, That all coalbed methane produced from
any coalbed methane well placed in service before the first day of
January, two thousand eight shall be entitled to the exemption set
forth in this section for the remainder of the five year original
exemption period applicable to the coalbed methane produced from
that well.
§11-13A-3f. Imposition of tax on privilege of severing coalbed
methane on and after January 1, 2008.
(a) Subject to the exceptions set forth in this article and
article thirteen-v of this chapter, on and after the first day of
January, two-thousand eight, coalbed methane and methane produced
from or by a coalbed methane well is taxable as natural gas for
purposes of the taxes imposed by this article and the taxes imposed
by article thirteen-v of this chapter.
(b) For purposes of this section, the terms "coalbed methane"
and "coalbed methane well" have the meaning ascribed to them in
section two, article twenty-one, chapter twenty-two of this code.
§11-13A-20a. Dedication of tax.
(a) The amount of taxes collected under this article from
providers of health care items or services, including any interest,
additions to tax and penalties collected under article ten of this
chapter, less the amount of allowable refunds and any interest
payable with respect to such refunds, shall be deposited into the
Special Revenue Fund created in the State Treasurer's Office and
known as the Medicaid State Share Fund. Said fund shall have
separate accounting for those health care providers as set forth in
articles four-b and four-c, chapter nine of this code.
(b) Notwithstanding the provisions of subsection (a) of this
section, for the remainder of fiscal year one thousand nine hundred
ninety-three and for each succeeding fiscal year, no expenditures from taxes collected from providers of health care items or
services are authorized except in accordance with appropriations by
the Legislature.
(c) The amount of taxes on the privilege of severing timber
collected under section three-b of this article, including any
interest, additions to tax and penalties collected under article
ten of this chapter, less the amount of allowable refunds and any
interest payable with respect to such refunds, shall be paid into
a special revenue account in the State Treasury to be appropriated
by the Legislature for purposes of the Division of Forestry.
(d) Notwithstanding any other provision of this code to the
contrary, beginning the first day of January, two thousand nine,
there is hereby dedicated an annual amount of up to four million
dollars from annual collections of the tax imposed by this article
to be deposited into the West Virginia Infrastructure Fund, created
in section nine, article fifteen-a, chapter thirty-one of this
code.
(1) For purposes of administering the deposits required by
this subdivision, after the thirty-first day of December, two
thousand eight from the taxes imposed by this article and paid to
the Tax Commissioner in the year, after deducting the amount of any
refunds lawfully paid and any administrative costs authorized by
this code, the Tax Commissioner shall pay into the West Virginia Infrastructure Fund an amount equal to up to four million dollars
per fiscal year.
(2) The annual payment to the West Virginia Infrastructure
Fund shall be made in January of each year, beginning in January,
two thousand nine.
(3) Notwithstanding any provision of this section to the
contrary, the total amount to be deposited in January, two thousand
nine, into the West Virginia Infrastructure Fund as provided in
this subsection for the fiscal year ending on the thirtieth day of
June, two thousand nine shall not exceed one million dollars.
(4) Notwithstanding any provision of this section to the
contrary, the total amount to be deposited in January, two thousand
ten, into the West Virginia Infrastructure Fund as provided in this
subsection for the fiscal year ending on the thirtieth day of June,
two thousand ten shall not exceed two million dollars.
(5) Notwithstanding any provision of this section to the
contrary, the total amount to be deposited in January, two thousand
eleven, into the West Virginia Infrastructure Fund as provided in
this subsection for the fiscal year ending on the thirtieth day of
June, two thousand eleven, and each January of each year
thereafter, shall not exceed four million dollars.
(d) (e) The amount of taxes collected under this article from
all other persons, including any interest, additions to tax and
penalties collected under article ten of this chapter, less the amount of allowable refunds and any interest payable with respect
to such refunds, shall be deposited into the General Revenue Fund.
ARTICLE 13V. WORKERS' COMPENSATION DEBT REDUCTION ACT.
§11-13V-4a. Coalbed methane.
(a) Subject to the exceptions set forth in this section, on
and after the first day of January, two thousand eight, coalbed
methane and methane produced from or by a coalbed methane well is
taxable as natural gas for purposes of the taxes imposed by this
article: Provided, That all coalbed methane produced from any
coalbed methane well placed in service before the first day of
January, two thousand eight shall be exempt from the taxes imposed
by this article for the remainder of the five year original
exemption period set forth in section three-d, article thirteen-a
of this chapter and applicable to the coalbed methane produced from
that well.
(b) For purposes of this section, the terms "coalbed methane"
and "coalbed methane well" have the meaning ascribed to them in
section two, article twenty-one, chapter twenty-two of this code.
NOTE: The purpose of this bill is to make the taxation of
natural gas and coalbed methane equal and uniform, to dedicate
certain amounts of tax revenue to the West Virginia Infrastructure
Fund, and to grandfather certain entitlements to the exemption
previously applicable to coalbed methane production.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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