Bill Summary – FastDemocracy

                                                                24LSO-0121
                                STATE OF WYOMING
                                SENATE FILE NO. SF0064
     Mineral royalties-proportional severance tax refunds.
     Sponsored by:        Select Federal Natural Resource Management Committee
                                          A BILL
                                            for
 AN ACT relating to severance taxes; establishing severance
 tax refunds for specified oil, gas and coal severance taxes
 based on    increased federal mineral royalty rates;
 authorizing the transfer of government royalty revenue as
 specified; providing for distribution of the state's share
 of specified federal mineral royalties;      providing for
 severance tax and ad    valorem distributions from federal
 mineral royalties as     specified;       requiring rulemaking;
 providing an    appropriation;      and providing for effective
 dates.
11
 Be It Enacted by the Legislature of the State of Wyoming:
13
        Section 1.      W.S. 9-4-601 by creating a new subsection
 (o),     39-13-111      by creating     a new subsection       (e),
                                             1                  SF0064
                     STATE OF WYOMING                        24LSO-0121
 39-14-109(c) by creating a new paragraph (iv), 39-14-209(c)
 by creating a new paragraph (iv) and 39-14-801 by creating
 a new subsection (m) are amended to read:
 4
        9-4-601.      Distribution and use;     funds,     accounts,
 cities and towns benefited; exception for bonus payments.
 7
        (o)    Notwithstanding the distribution requirements
 imposed under this section, beginning calendar year 2025
 and each year thereafter,        the state treasurer shall
 transfer funds from the account created by subsection (a)
 of this section to the severance tax distribution account
 created by W.S. 39-14-801(a) in the amounts specified in
 this subsection in accordance with the following:
15
               (i)    There shall be a transfer to the severance
 tax distribution account in an amount equal to the funds
 necessary to provide the severance tax refunds authorized
 by W.S. 39-14-109(c)(iv) and 39-14-209(c)(iv);
20
               (ii)    The amount calculated in paragraph (i) of
 this subsection shall be       multiplied by     sixteen and
 sixty-seven hundredths percent       (16.67%),    the product of
                                         2                  SF0064
                     STATE OF WYOMING                            24LSO-0121
 which shall be added to the funds otherwise transferred
 under this subsection and separately distributed in
 accordance with W.S. 39-14-801(b) through (e);
 4
              (iii)     An amount equal to the amount calculated
 under   W.S.    39-13-111(e)          shall be   added to     the funds
 otherwise transferred under this subsection and separately
 distributed in accordance with W.S. 39-13-111;
 9
              (iv)     Before the state treasurer transfers any
 funds required to be transferred under this subsection, the
 department of revenue shall certify to the state treasurer
 the funds necessary to provide:
14
                     (A)   The severance tax refunds specified in
 W.S. 39-14-109(c)(iv) and 39-14-209(c)(iv);
17
                     (B)   The amount calculated under paragraph
 (ii)    of this subsection for distribution under   W.S.
 39-14-801(b) through (e);
21
                                           3                 SF0064
                       STATE OF WYOMING                      24LSO-0121
                    (C)     The amount calculated under paragraph
 (iii)     of this subsection and    W.S.    39-13-111(e)       for
 distribution under W.S. 39-13-111.
 4
         39-13-111.     Distribution.
 6
         (e)    The department shall calculate an amount equal to
 the reduced ad valorem taxable value that results from any
 increase in federal mineral royalty rate percentage under
 W.S. 9-4-601 and refunds issued under W.S. 39-14-109(c)(iv)
 and    39-14-209(c)(iv). The department shall then multiply
 that amount by the mill levy established in September of
 the year following the applicable production year
 associated with the increased royalty rate. The department
 shall distribute from separately accounted funds in   the
 severance tax distribution account under W.S. 39-14-801(m)
 to the county treasurer the amount calculated under this
 subsection for distribution in    accordance with this
 section.
20
        39-14-109.      Taxpayer remedies.
22
        (c)     Refunds.    The following shall apply:
                                            4              SF0064
                            STATE OF WYOMING                      24LSO-0121
 1
                  (iv)    Beginning with mineral production taking
 place on   and after January    1,   2025,      the taxpayer is
 entitled to receive a monetary refund on a per property
 basis in   an amount specified under this paragraph of        a
 portion of severance taxes paid under W.S. 39-14-104(a)(ii)
 through (vi) on surface coal mined from the federal mineral
 estate or paid under W.S. 39-14-104(b)(ii) and (iii) on
 underground coal mined from the federal mineral estate in
 the immediately preceding year.   The refund shall be    in
 accordance with the following:
12
                         (A)   The refund shall be in an amount equal
 to the amount of:
15
                               (I)     Any increased royalty levied
 against taxpayers as a result of any cumulative increase in
 the federal mineral royalty rate percentage from the
 percentage in place as of July 1, 2021 imposed on surface
 coal and underground coal in accordance with 30 U.S.C. 207
 or as    prescribed by     rule under      43   C.F.R.      3473.3-2,
 multiplied by the gross percentage share of the state under
                                             5                  SF0064
                            STATE OF WYOMING                          24LSO-0121
 30     U.S.C.         191(a)        after deducting the mandatory
 administrative costs imposed under 30 U.S.C. 191(b); and
 3
                              (II)     The amount determined in
 subdivision       (I)        of this subparagraph multiplied by
 seventy-five percent (75%) to approximate the reduced value
 of the gross product resulting from the increase in the
 federal mineral royalty rate percentage.
 9
                       (B)    The refund determined in    subparagraph
 (A) of this paragraph shall not exceed the total annual
 severance tax liability for the taxpayer under    W.S.
 39-14-104(a)(ii)           through     (vi)     on surface coal and under
 W.S. 39-14-104(b)(ii) and (iii) on underground coal;
15
                       (C)    The burden shall be on the taxpayer to
 establish the amount of       any refund due under this
 paragraph;
19
                       (D)    The taxpayer shall apply for the refund
 authorized under this paragraph annually on or before July
 1 of the year immediately following the year of mineral
 production on    a form prescribed by    the department.       The
                                               6                  SF0064
                          STATE OF WYOMING                     24LSO-0121
 department shall by   rule prescribe procedures and other
 applicable timelines under which a taxpayer who is eligible
 to receive a refund under this paragraph may apply for and
 receive the refund;
 5
                      (E)    Upon receipt of    an application and
 review by the department that a taxpayer is eligible for a
 refund under this paragraph, the department shall issue the
 refund to the taxpayer.
10
        39-14-209.      Taxpayer remedies.
12
        (c)    Refunds.      The following shall apply:
14
               (iv)    Beginning with mineral production taking
 place on    and after January      1,   2025,      the taxpayer is
 entitled to receive a monetary refund on a per property
 basis in      an amount specified under this paragraph of a
 portion of severance taxes paid under W.S. 39-14-204(a)(ii)
 through (iv) on crude oil, lease condensate or natural gas
 produced from the federal mineral estate in the immediately
 preceding year. The refund shall be in accordance with the
 following:
                                             7                SF0064
                           STATE OF WYOMING                   24LSO-0121
 1
                       (A)   The refund shall be in an amount equal
 to the amount of:
 4
                             (I)     Any increased royalty levied
 against taxpayers as a result of any cumulative increase in
 the federal mineral royalty rate percentage from the
 percentage in place as of July 1, 2021 imposed on crude
 oil, lease condensate or natural gas in accordance with 30
 U.S.C.   226     or as    prescribed by    rule under   43   C.F.R.
 3103.3-1, multiplied by the gross percentage share of the
 state under 30 U.S.C. 191(a) after deducting the mandatory
 administrative costs imposed under 30 U.S.C. 191(b); and
14
                             (II)     The amount determined in
 subdivision      (I)        of this subparagraph multiplied by
 seventy-five percent (75%) to approximate the reduced value
 of the gross product resulting from the increase in the
 federal mineral royalty rate percentage.
20
                       (B)   The refund determined in   subparagraph
 (A) of this paragraph shall not exceed the total annual
                                            8                SF0064
                        STATE OF WYOMING                        24LSO-0121
 severance tax liability for the taxpayer under   W.S.
 39-14-204(a)(ii) through (iv);
 3
                    (C)     The burden shall be on the taxpayer to
 establish the amount of       any refund due under this
 paragraph;
 7
                    (D)     The taxpayer shall apply for the refund
 authorized under this paragraph annually on or before July
 1 of the year immediately following the year of mineral
 production on     a form prescribed by    the department.     The
 department shall by   rule prescribe procedures and other
 applicable timelines under which a taxpayer who is eligible
 to receive a refund under this paragraph may apply for and
 receive the refund;
16
                    (E)     Upon receipt of    an application and
 review by the department that a taxpayer is eligible for a
 refund under this paragraph, the department shall issue the
 refund to the taxpayer.
21
        39-14-801.       Severance tax distributions; distribution
 account created; formula.
                                            9                 SF0064
                           STATE OF WYOMING                       24LSO-0121
 1
         (m)    Notwithstanding the distribution requirements
 imposed under subsections (b) through (e) of this section,
 funds transferred into the severance tax distribution
 account as   provided by    W.S.    9-4-601(o)       to provide the
 severance tax refunds authorized by W.S. 39-14-109(c)(iv)
 and    39-14-209(c)(iv)           and to    provide distributions under
 this section and W.S. 39-13-111(e) shall be accounted for
 separately and are continuously appropriated to     the
 department of    revenue for the purpose of    funding the
 taxpayer refunds authorized by W.S. 39-14-109(c)(iv)                               and
 39-14-209(c)(iv) and for distribution under this section
 and W.S. 39-13-111(e). Beginning September 1, 2026 and on
 September      1    of each year thereafter,    the department of
 revenue shall annually report to the joint revenue interim
 committee on the number of taxpayer refund applicants and
 the number and amount of    refunds provided under     W.S.
 39-14-109(c)(iv)           and     39-14-209(c)(iv)            and the amounts
 separately accounted for and distributed under this section
 and W.S. 39-13-111(e).
21
        Section 2.         The department of revenue shall promulgate
 all rules necessary to implement this act.
                                              10                SF0064
                         STATE OF WYOMING                     24LSO-0121
 1
        Section       3.   There is       appropriated three hundred
 sixty-eight thousand dollars ($368,000.00) from the general
 fund to the department of revenue for the period beginning
 with the effective date of this section and ending June 30,
 2025 to be expended only for purposes of implementing this
 act.    This appropriation shall not be    transferred or
 expended for any other purpose and any unexpended,
 unobligated funds remaining from this appropriation shall
 revert as provided by law on June 30, 2025.
11
        Section 4.
13
        (a)   Except as   provided in   subsection       (b)   of this
 section, this act is effective immediately upon completion
 of all acts necessary for a bill to become law as provided
 by Article 4, Section 8 of the Wyoming Constitution.
18
        (b)   Section 1 of this act is effective January 1,
 2025.
21
                                        (END)
                                            11              SF0064
Statutes affected: 
Introduced: 9-4-601, 39-13-111, 39-14-109, 39-14-209, 39-14-801