SENATE CONCURRENT RESOLUTION NO. 90
(By Senators Hunter, Kessler, Stollings, Wells, Deem,
Guills, Sprouse and Sypolt)
[Originating in the Committee on Energy, Industry and Mining]
Requesting the Joint Committee on Government and Finance study
the
effects of
the severance tax as it applies to the natural gas
and oil industry.
Whereas,
The Legislature strives to simplify and clarify the
tax laws as they apply to various industries; and
Whereas, The Legislature specifically desires to simplify and
make uniform the taxation and clarify the regulation and treatment
of the production, marketing and delivery of natural gas and oil;
and
Whereas, The current severance tax scheme, as it applies to
the oil and gas industry, is a multiform miasma that belies the
intent of the Legislature with regard to taxation of minerals. The
existing tax scheme is complicated, outdated, includes exemptions
that are not uniformly applied and is difficult to monitor for
compliance or enforcement. As a result, there are reported to be
numerous violators who are not paying the severance tax or who are
paying less than required under current law; and
Whereas, Legislation has been introduced proposing that: (1) all current exemptions and exclusions from severance taxes for the
privilege of severing natural gas or oil be abrogated, including
the existing exemption for low-volume producers (less than one-half
barrels of oil per day or less than 5000 cubic feet of natural gas
per day); and (2) reducing the existing severance tax rate from
five percent to four and one-half percent on all oil and gas
produced; and
Whereas, Certain other issues included in the proposed
legislation, but not acted upon, need further study, such as: the
access by landowners to gas produced within their land; the value
of and compensation for the land and timber utilized by the oil and
gas producers; bond requirements; reclamation procedures and
payment for damages, if any; and
Whereas, There is concern that the low-volume producers will
suffer the brunt of the financial impact and will, in many cases,
be unable to continue to operate at a profit; therefore, be it
Resolved by the Legislature of West Virginia:
That the Joint Committee on Government and Finance is hereby
requested to study
the effects of
the severance tax as it applies
to the natural gas and oil industry; and, be it
Further Resolved, That the Joint Committee on Government and
Finance report to the regular session of the Legislature, 2009, on
its findings, conclusions and recommendations, together with drafts
of any legislation necessary to effectuate its recommendations; and, be it
Further Resolved, That the expenses necessary to conduct this
study, to prepare a report and to draft necessary legislation be
paid from legislative appropriations to the Joint Committee on
Government and Finance.
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