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22LSO-0065
2022
STATE OF WYOMING
22LSO-0065
ENGROSSED
3.0
SENATE FILE NO. SF0084
Mineral royalties-proportional severance tax relief.
Sponsored by: Select Federal Natural Resource Management Committee
A BILL
for
AN ACT relating to severance taxes; creating severance tax refunds for specified oil, gas and coal severance taxes based on increased federal royalty rates; authorizing the transfer of government royalty revenue as specified; providing for distribution of the state's share of specified federal mineral royalties; requiring rulemaking; and providing for effective dates.
Be It Enacted by the Legislature of the State of Wyoming:
Section 1.
W.S. 9
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4
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601 by creating a new subsection (n), 39
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14
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109(c) by creating a new paragraph (iv), 39
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14
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209(c) by creating a new paragraph (iv) and 39
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14
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801 by creating a new subsection (j) are amended to read:
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601.
Distribution and use; funds, accounts, cities and towns benefited; exception for bonus payments.
(n)
Notwithstanding the distribution requirements imposed under this section, beginning calendar year 2023 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
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14
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801(a) in an amount specified in this subsection. The amount of the transfer shall be equal to the funds necessary to provide the severance tax refunds authorized by W.S. 39
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14
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109(c)(iv) and 39
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14
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209(c)(iv). That amount shall then be multiplied by sixteen and sixty-seven hundredths percent (16.67%), the product of which shall be included with the funds transferred under this subsection and separately distributed in accordance with W.S. 39-14-801(b) through (e). The department of revenue shall certify to the state treasurer the funds necessary to provide the severance tax refunds before the state treasurer transfers any funds under this subsection.
39
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14
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109.
Taxpayer remedies.
(c)
Refunds.
The following shall apply:
(iv)
Beginning with mineral production taking place on and after January 1, 2023, the taxpayer is entitled to receive a monetary refund on a per property basis in an amount specified under this paragraph of a proportion of severance taxes paid under
W.S. 39
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14
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104(a)(ii) through (vi) on surface coal mined from the federal mineral estate or paid under W.S. 39
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104(b)(ii) and (iii) on underground coal mined from the federal mineral estate in the prior production year. The value of the refund shall be in an amount equal to the 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
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2, 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).
That amount shall then be multiplied by seventy
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five percent (75%) to approximate and account for the reduced assessed mineral value resulting from the increase in the federal
mineral royalty rate percentage. The refund
shall not exceed the total annual severance tax liability for the taxpayer under W.S. 39
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104(a)(ii) through (vi) on surface coal and under W.S. 39
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104(b)(ii) and (iii) on underground coal. The burden shall be on the taxpayer to establish the amount of any refund due under this paragraph.
The taxpayer shall apply for the refund authorized under this paragraph annually on or before July 1 of the year 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.
39
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14
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209.
Taxpayer remedies.
(c)
Refunds.
The following shall apply:
(iv)
Beginning
with mineral production taking place on and after January 1, 2023
, the taxpayer is entitled to receive a monetary refund on a per property basis in an amount specified under this paragraph of a proportion of severance taxes paid under
W.S.
39
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14
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204(a)(ii) through (iv)
on crude oil, lease condensate or natural gas
produced from the federal mineral estate in the prior production year
.
The value of the refund shall be in an amount equal to 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
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, 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).
That amount shall then be multiplied by seventy
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five percent (75%) to approximate and account for the reduced assessed mineral value resulting from the increase in the federal mineral royalty rate percentage. The refund
shall not exceed the total annual severance tax liability for the taxpayer under W.S. 39
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14
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204(a)(ii) through (iv).
The taxpayer shall apply for the refund authorized under this paragraph annually on or before July 1 of the year following the year of mineral production on a form prescribed by the department.
The burden shall be on the taxpayer to establish the amount of any refund due under
this paragraph.
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. No refunds shall be provided under this paragraph for crude oil production during any month in which the monthly average of daily spot prices for West Texas Intermediate (WTI) per barrel of oil is eighty dollars ($80.00) or more. No refunds shall be provided under this paragraph for natural gas production during any month in which the monthly average of daily spot prices for Henry hub per thousand cubic feet of natural gas is four dollars ($4.00) or more.
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801.
Severance tax distributions; distribution account created; formula.
(j)
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
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601(n) to provide the severance tax refunds authorized by W.S. 39-14-109(c)(iv) and 39-14-209(c)(iv) 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
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109(c)(iv) and 39
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209(c)(iv). Beginning September 1, 2023 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
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109(c)(iv) and 39
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209(c)(iv).
Section 2
.
The department of revenue shall promulgate all rules necessary to implement the provisions of this act.
Section 3
.
(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.
(b)
Section 1 of this act is effective January 1, 2023
.
(END)
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SF0084