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Rail cars loaded with coal are transported from nearby mines to power plants in Wyoming. Newly passed legislation appears to be causing headaches for county treasurers throughout Wyoming before it has even taken effect. Senate File 60, which was introduced and passed during the 2021 General Session, is supposed to provide a process for monthly ad valorem taxation of mineral production instead of biannual payments. File/Courtesy

SARATOGA — Newly passed legislation appears to be causing headaches for county treasurers throughout Wyoming before it has even taken effect. Senate File 60, which was introduced and passed during the 2021 General Session, is supposed to provide a process for monthly ad valorem taxation of mineral production instead of biannual payments.

During the May 18 meeting of the Carbon County Commissioners, County Treasurer Patty Bentsen requested a letter of support from the commissioners to delay the implementation of the monthly payment process. According to Senate File 60, 50% of production from 2020 and all production from calendar year 2021 is to be paid out at 8% beginning December 1, 2023 until the outstanding amount is repaid.

“There are a lot of unanswered questions as far as (the) Department of Revenue does not have the software setup to take this money,” said Bentsen. “They are not sending ACHs (Automated Clearing House) out to the vendors or to the taxpayers and they have not sent any notification to the taxpayers that this is going to take effect starting January of 2022.”

Additionally, the legislation appropriates funds—$16,726,000 from the legislative stabilization reserve account—for loans to counties with the intention of addressing shortfalls caused by the switch from biannual to monthly payments. Those loans, according to the text of Senate File 60, are to be repaid by the county on a schedule determined by the state treasurer at an interest rate of zero percent.

According to Bentsen, however, this raises some questions for the county treasurers. While Senate File 60 states loans “shall be guaranteed by the payment of remaining taxes” under the newly created ‘subsection g’ of Wyoming State Statute 39-13-113. This subsection establishes the monthly payment of ad valorem taxes on mineral production effective January 1, 2022.

“Who’s responsible if these companies aren’t around in 12 years since we borrowed the money on their behalf?” Bentsen said. “What if they filed bankruptcy and we borrowed on their behalf?”

Yet another concern of county treasurers is the disbursement of funds following collection by the Wyoming Department of Revenue. Bentsen told the BOCCC, if $1 million were sent to her office following collection, she would not be informed by the department as to which parcel the funds were collected from and should be distributed. Under 39-13-111 of the Wyoming State Statutes, county treasurers are obligated to proportionally distribute the funds to each taxing entity within the county.

“We’re going to have to sprinkle it out to the best of our ability and then come June, when we have to reconcile it, say we gave the health district more money than they deserved, they’re not going to get paid the money back from them,” said Bentsen. “There needs to be a more viable plan. There’s too many uncertainties and they could decimate some of these districts, let alone the towns.”

Bentsen requested the county commissioners submit a letter supporting the Wyoming County Treasurers Association asking the State of Wyoming delay their implementation of the monthly ad valorem tax payments. With the Wyoming Legislature holding a special session in July, the county treasurer said it was her hope the time could be used to make sure the Department of Revenue could get all their ducks in a row.

“They’re not going to get their ducks in a row. They don’t even have them in the same damn pond. They’re going to have to give us some bonafide groundings to move forward,” said Commissioner Byron Barkhurst. “The intent behind it, originally, was good in my opinion so that we kept track of some of these mineral and ad valorem taxes. It’s just been completely gutted.”

“The Department of Revenue knew this train left the station over a year ago and they know that treasurers need to know what parcel this production occurred on and what the value of that production was when that check is given,” added Commissioner John Espy. “They know that.”

Indeed, prior to Senate File 60 being introduced during the 2021 General Session, the Wyoming Legislature passed House Bill 159 during the 2020 Budget Session. This bill, introduced by the Select Committee on Coal/Mineral Bankruptcies, created a provision for the monthly payment of ad valorem taxes.

Espy added the collection of the ad valorem tax on mineral production affected eight of the 23 counties in Wyoming. Additionally, due to the amount of mineral production in those eight counties, they were the major funders of education in the state. The commissioner stated, if the State of Wyoming did not get the collection and payment of these taxes right, it would severely impact the school districts throughout the state.

A motion for the BOCCC to send a letter in support of the Wyoming County Treasurers Association was approved unanimously.

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