H. B. 2540


(By Delegates White, Kominar, Eldridge,

Caputo, Guthrie and Phillips)

[Introduced January 13, 2010; referred to the

Committee on Finance.]




A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-13A-5b, relating to dedicating a portion of revenue generated from certain severance taxes for the benefit of counties from which the revenue was generated and their municipalities; creating a special revenue fund; providing for the distribution of the moneys in the fund; and providing permissible uses for distributed moneys.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §11-13A-5b, to read as follows:

ARTICLE 13A. SEVERANCE TAXES.

§11-13A-5b. Additional dedication of severance taxes for counties and municipalities.
(a) Effective July 1, 2009, in addition to all other dedications of tax provided by this article, five percent of the tax annually generated from severance taxes imposed by sections three, three-a, three-b, three-c and three-e of this article is dedicated for the use and benefit of the counties and municipalities from which those taxes were generated and shall be distributed to each county and municipality as provided in this section.
(b) The tax revenues dedicated under subsection (a) of this section shall be transferred by the Tax Commissioner into a special revenue fund to be administered by the development office, designated the county severance revenue fund, which is hereby created. The moneys of the fund shall be expended for the purposes provided in this section. Any earnings or other return on the investment of the moneys in the fund shall be paid into the State General Revenue Fund, but at the end of each fiscal year, the moneys deposited into the fund shall not revert to the general revenue fund but shall continue to be held in the fund for expenditure during the ensuing fiscal year, except as provided in subsection (h) of this section.
(c) The net proceeds in the county severance revenue fund, after deduction of the administrative expenses described in this section, shall be distributed annually as follows, subject to the requirements of subsection (f) of this section:
(1) One-half shall be allocated to the counties from which the severance tax or taxes were derived based on relative adjusted gross receipts of each of those taxes from those counties; and
(2) One-half shall be allocated pro rata to the municipalities within the counties described in subdivision (1) of this subsection, the total portion of which, for the municipalities in each such county, is determined by the relative adjusted gross receipts of each of those taxes from those counties, based on each municipality's population determined at the most recent United States decennial census of population: Provided, That for each allocation, when a municipality is physically located in two or more counties, only that portion of its population residing in the county from which the severance taxes are generated are located shall be considered.
(d) Each year, prior to distribution, the development office shall retain and expend such portion of the amount of the moneys deposited in the county severance revenue fund determined by the development office necessary to administer the distribution of those moneys and other provisions of this section.
(e) The counties and municipalities receiving the distributions described this section may expend those moneys only for the purposes of infrastructure, recreation or senior services.
(f) (1) A county or a municipality may receive the allocations described in subsection (c) of this section only upon meeting the requirements of this subsection.
(2) Prior to receiving an allocation provided for a county described in subsection (c) of this section, the county or the municipality, as applicable, must submit a description of the infrastructure, recreation or senior services project or program upon which it intends to expend the allocation to the development office, in the form and manner prescribed by the development office, together with all other information required by the development office. Upon the determination of the development office that the project or program meets the requirements of subsection (e) of this section, the allocation shall be distributed.
(3) Not less than once each three years, or more often at the discretion of the development office, the development office shall conduct an audit of each county or municipality that has received an allocation under this section to determine whether the allocation has been expended for the purposes described in subsection (e) of this section. The expense of the audits shall be paid from the county severance revenue fund.
(g) (1) In the event a county or municipality fails to cooperate with an audit described in subsection (f) of this section, the development office shall withhold any further allocations to be made under this section until the audit has been completed.
(2) In the event the development office determines as the result of an audit that a county or municipality failed to expend its allocation for the purposes described in subsection (e) of this section, the county or municipality shall refund the amount of the allocation, or such portion of the allocation not expended for those purposes, to the development office, which amount shall be deposited into the county severance revenue fund. The development office shall withhold any further allocations to be made under this section until the amount has been refunded.
(h) Any amounts authorized by the provisions of this section for allocation to a county or municipality that are not distributed to the county or municipality for failure to meet the requirements of this section or that are refunded pursuant to subsection (g) of this section, shall, if not distributed to the county or municipality pursuant to the provisions of this section within five years of the year in which the moneys first become available for allocation or within five years of the date upon which the refund is paid, be transferred and deposited into the State General Revenue Fund and shall no longer be available for allocation or distribution.


NOTE: The purpose of the bill is to dedicate five percent of current severance taxes imposed on coal, gas and oil, timber, waste coal, and "other" natural resources (such as limestone) to a special fund, to be allocated by the development office to the counties, and the cities within those counties, from which the severance tax on those natural resources are generated at the same percentage as the percentage of the total severance tax revenues are generated from the county.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.