GILLETTE – Two bills that were signed into law this month will help counties collect mineral production taxes.
Both made it through the House and Senate without much opposition and were recently signed by Gov. Mark Gordon.
Senate File 60, a monthly ad valorem tax payment bill, and Senate File 41, a lien priority bill, both codify language that was passed in the 2020 legislative session.
Senate File 60 lays out the transition for companies to pay mineral production taxes on a monthly schedule.
And Senate File 41 further strengthens a county’s standing when it comes to lien priority.
A few years ago, similar bills were opposed by the energy industry, bankers and legislative leaders. Multiple attempts were made to pass legislation, but they were ultimately shot down.
Commissioner Rusty Bell said that since then, local and state officials have come together to realize collection of ad valorem taxes is a problem that needs to be addressed.
“The biggest thing to take from this was this was really a joint effort between industry, counties the Legislature,” he said.
A monthly mineral production tax payment bill was signed into law last year. Bell said that was the framework for Senate File 60.
“What this does is it allows a company to pay back, over 12 years, that back 18 months of (production) taxes on minerals that are already gone,” he said.
And in the mid-2030s, companies will be paying their mineral production taxes on the same schedule as severance tax.
It passed its third reading in the Senate on a 27-1 vote. The House approved it 47-13, and on the final Senate vote it passed 24-6. Two Campbell County legislators – Rep. Bill Fortner and Sen. Troy McKeown, voted “no.”
Bell said Senate File 41 gives counties “a good lien priority position over and above anybody else as soon as you take those minerals out of the ground.”
It will be help counties when an energy company declares bankruptcy. In the past, counties had trouble collecting taxes owed to them because other parties had a higher lien priority.
A lien priority bill was signed into law in 2020, and Senate File 41 made it through without a single vote against it. It passed the Senate 29-0 and the House 59-0.
The energy industry was “a lot of help in putting together that language,” Bell said, adding that county commissioners, treasurers and assessors across the state also worked to make the bills as solid as possible.