H. B. 4437
(By Delegates Wright and Flanigan)
[Introduced February 13, 1998; referred to the
Committee on Finance.]
A BILL 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 dedicating
all revenue from the severance tax on natural gas that is
transported for use out of state to the county in which it
was extracted.
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 one hundred percent of gas severance
tax on gas transported out of state; dedication of ten percent of oil and remaining 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) Except as provided for tax proceeds on natural gas
transported for use outside of this state, 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) Except as provided for tax proceeds on natural gas
transported for use outside of this state, 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) 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
one hundred percent of the dedicated tax on natural gas
transported for use out of this state and seventy-five percent of the dedicated tax on oil and remaining natural 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, one thousand nine hundred ninety-five, 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 remaining natural 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, one thousand nine hundred ninety-five, 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.
One hundred percent of the tax on natural gas transported for
use outside of this state and seventy-five percent of the
dedicated tax on oil and the remaining natural gas shall be
deposited in the "oil and gas county revenue fund" and
twenty-five percent of the dedicated tax on oil and the remaining natural 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) of this section.
(e) 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) 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) 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 that is transported for use outside of the state, one hundred
percent of the proceeds shall be distributed to the county in
which the gas was extracted.
(1) (2) In the case of moneys derived from tax on the
severance of the remaining 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 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) 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.
NOTE: The purpose of this bill is to dedicate 100% of the
severance tax imposed on natural gas that is transported for use
out of state to the county in which it was extracted.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that
would be added.