On January 28, 2016, West Virginia Senator Jeffrey V.
Kessler introduced Senate Bill No. 419 to the General Assembly “relating to termination of
Workers’ Compensation Debt Reduction Act.” The principal purpose of the bill is
to terminate privilege taxes imposed on severing or producing natural gas in
addition to the state severance tax.
The Workers’ Compensation Debt Reduction Act imposed an
additional tax of 4.7 cents per thousand cubic feet on natural gas at point of
production. The Act also imposed 56 cents per ton on coal production. Under
this bill, those additional taxes would be terminated on and after July 1,
2016. According to a Fiscal Note Summary, “passage of this bill would reduce the current cash
flow into the Old Worker’s Compensation Debt Fund . . . one of the objectives behind
the provisions of this bill is to more carefully target long-term [Old Worker’s Compensation Debt Fund] revenues to
closely match long term Old Fund liabilities.”
The bill passed the Senate on February 11, 2016, and
was referred to the House Finance Committee the next day. If the bill passes,
natural resources producers would still be required to pay a severance tax of
5% of gross value for oil and natural gas.
Writing by Chloe Marie - Research Fellow
02/15/2016
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