Mineral Ad Valorem Transition Planning

Mineral Ad Valorem Transition Planning

May 5, 2021

WCCA Headquarters

Virtually via Microsoft Teams

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Present at the WCCA: Jerimiah Rieman (WCCA Executive Director), Department of Revenue (Director Dan Noble; two staff members), and Joel Schell (Converse County Treasurer).

Present virtually: Commissioner Novotny (Johnson County), Representative Crago,

Commissioner Bell (Campbell County), Carol Seeger (Campbell County), Dixie Huxtable

(Converse County Assessor), and Malcom Ervin (Platte County Clerk).

The Department of Revenue and counties discussed the implementation and

administrative/legislative issues of SF60.

Department of Revenue topics of discussion included: system/form work ahead of January 1; work with ETS/MBS; importance of meeting with counties to ensure everyone is on the same page to see how parties envision the system working/timeline; minimizing out of pocket costs associated with the system changes; adding fields to the tax return form; taxpayers estimating their taxes for upcoming year based on mill levies paid in the previous year; providing gross amounts to counties that are provided to the department by taxpayers of dollars paid/not associated by tax district/number reported on a county by county basis/paying on an estimate; a monthly gross product return would be the only way to provide jurisdictional boundaries (not contemplated by industry in past discussions); and industry expectations raised during session/use existing tax form to make this work/report like severance tax/end of the year true-up. Director Noble also stated the department will discuss what it would look like to go to a gross product return monthly/what the fiscal impacts would be for the department and will work with the industry to see what it looks like for them if something evolves more than the severance tax return/if the industry would be able to adjust if there are changes on the form.

County agency topics of discussion included: methods of distribution from the Department of Revenue to counties; true-up process; what dollars are being used to pay what levies and what districts/levies set on what year of production; do we have a set number or use a CREG number; volatility report from LSO; built reserves to stabilize volatility evaluation; reporting process; getting a certified value that is not related to the dollars to be collected in the next FY; what commissioners envision in setting the budget (look at it more like the sales and use tax/is there a better way to do it so as not to have issues with true-up/which could create issues in the industry); and the concern of how to pay it/how to distribute it/what year of taxes are looked at.

ED Rieman stated that education and preparation is key with the implementation and that

looking at how to budget around mineral ad valorem would be a topic of discussion at a

future meeting to prepare entities of the process/system.

Commissioner Bell (Campbell County) stated they have a revenue estimating group that meets on a quarterly basis and they will look at extending an invite to other taxing entities/districts (especially others that are not at their full mill levy).

ED Rieman stated there are a few paths to look at. First, where taxing entities are paying in

on previous mill levies, then a true-up occurs and goes back once the mill levy is set, which

will require counties to do things differently/project as counties do budgeting for special

districts and the county. ED Rieman stated the option of trying to devise a system of a local revenue estimating group (WCCA puts together a revenue estimating manual every year and perhaps the manual could be evolved to include additional information to provide better certainty). Second, to evolve the system for mineral ad valorem where the county sets mill levies earlier, so that when taxpayers begin to make payments, it is based on a realization of what the mill levies should be at the very beginning, through that period and only true-up would be if it matched production that happened during that period.

Dixie Huxtable (Converse County Assessor) discussed the certified letters, what is used to set the mill levies/estimating budgets, and the mill levy report that assessors must submit that must match the assessed value that the Wy State Board of Equalization gives them.

Joel Schell (Converse County Treasurer) discussed: the potential process of collection

disconnects; no receivable/no ability to say what is left to be paid/cannot look at the value; and that credit for future taxes is a topic of conversation/if the county owes a refund, who holds the dollars. Treasurer Schell stated that if there is a change to the system, that is statutorily mandated, the vendors who work on the tax software cannot charge the counties due to the contract. If there is another bill, counties would have to pay additional fees for changes to the software to prepare ahead of August.

ED Rieman will be meeting with the Treasurer’s office and then their office plans to meet

with a larger group to discuss their administrative/legislative needs and if more money is

needed for the loan portion. Key follow up discussions: better projecting on the front end as budgets are set so there are not massive true-ups; mail certifications; what the bill to taxpayers will look like; collection process and what happens with the less than $30,000/Supreme Court states interest owed on money belongs to the schools.

Ahead of the next meeting, parties will identify what the major administration issues are;

what the preferences are with the issues; if there are legislative needs that are encompassed within; and then will continue to discuss creating solutions.

Timeline: August 25-27, 2021- PAW Annual Meeting; September 21-23, 2021- WACO;

January 1, 2022 and February 14, 2022.

The next meeting will be held at 11:00am on Thursday, May 27th at the WCCA (virtual option available as needed).