SMITH COUNTY Present law authorizes a county legislative body, by resolution, to levy a tax on sand, gravel, sandstone, chert, and limestone severed from the ground within its jurisdiction. The tax must be levied for the use and benefit of the county only, to be allocated and applied to its county road fund, and all revenues collected from the tax, except deductions for administration and collection, must be allocated to the county. In Smith County, present law authorizes the county legislative body to, by resolution adopted by a 2/3 vote, allocate such revenues to the county road fund, the county general fund, or any other fund of the county. This bill deletes this provision for Smith County. MINERAL SEVERANCE TAX RATE Present law requires the mineral severance tax rate be set by the county legislative body, but it must not exceed 15¢ per ton on sand, gravel, sandstone, chert, or limestone severed from the ground in the county. This bill deletes the 15¢ per ton rate cap and, instead, provides that the rate must not exceed the following amounts:  For a tax period before July 1, 2025, 15¢ per ton.  For a tax period between July 1, 2025 and July 1, 2030, 20¢ per ton.  For a tax period between July 1, 2030 and July 1, 2035, 25¢ per ton.  For a tax period that begins on or after July 1, 2035, and for subsequent tax periods, 30¢ per ton. DISPOSITION OF TAXES Present law requires all such tax revenues collected, less an amount to cover the expenses of administration and collection and any interest and penalties collected by the department of revenue ("department"), to be remitted quarterly to the county trustee as soon as practical following the end of a calendar quarter. These revenues must become a part of the county road fund of the county, and must be used for the construction, maintenance, and repair of the county system. This bill adds that, not less than 30 days after the end of a county's fiscal year, each county that receives revenue from mineral severance tax must provide an annual written report to the comptroller of the treasury, the commissioner of transportation, and legislative committees, detailing (i) the amount of revenue deposited into the county road fund during the previous fiscal year, (ii) the amount of revenue spent by the county, and (iii) how those expenditures have been designated and used for construction, maintenance, and repair of the county system. AUTHORIZATION This bill authorizes a county legislative body that has authorized a mineral severance tax to increase the tax rate, in accordance with the timeline set out above, by adopting a resolution by a 2/3 majority vote. The presiding officer of the county legislative body must deliver a certified copy of the resolution increasing the tax rate to the department. The department must not collect the new tax rate until the first day of a month occurring at least 30 days after the receipt of a certified copy of such action by the department. ON MARCH 17, 2025, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 695, AS AMENDED. AMENDMENT #1 revises the provision that prohibits the department from collecting the new mineral severance tax rate until the first day of a month occurring at least 30 days after the receipt of a certified copy of such action by the department by increasing "30 days" to "60 days".

Statutes affected:
Introduced: 67-7-203(a), 67-7-203, 67-7-201, 67-7-207(b), 67-7-207, 67-7-212