Senate advances bill designed to protect counties from unpaid taxes

CHEYENNE – After two days of debate – and nearly punting the bill to the interim for another year – the Wyoming Senate will be taking up legislation requiring extractive industries to pay ad valorem taxes on a monthly basis.

Intended to help address millions of dollars in delinquent production taxes to municipalities over the years, the legislation has traveled a bumpy road to get to where it is today. In protracted negotiations over the past two years, county commissioners affected most by unpaid taxes have been seeking some solution to get the money they’ve been owed, while the state’s minerals industry – particularly the cash-strapped coal sector – has operated on razor-thin margins to stay afloat and continue to support thousands of jobs across the state.

On Wednesday night, a compromise seemed to have been reached between the two, accommodating a level of flexibility desired by industry while putting in strict enough guidelines to ensure counties get the money they’re entitled to.

“I really do think it’s a step in the right direction,” said Revenue Committee chairman Sen. Cale Case, R-Lander. “That was hard to get there. But I think once people have gotten their arms and brains around it, we’ll have a positive compromise to move forward with.”

However, the legislation – if passed by the Senate next week – would still pose a challenge to the state’s minerals industry. Not only would the companies be required to pay enough to catch up on what is owed, but will have to continue paying their regular taxes on a monthly basis, what Case described as a “tremendous burden” on those industries.

“We’re trying to make this work, and have a transition that will work for everybody,” Case said.

The bill itself is complicated, with a mix of start dates and provisions intended to outline terms for future negotiations between industry and government. While it ultimately results in an additional burden for industry, there have been some residual concerns with counties as well, said Johnson County Commissioner Bill Novotny.

As the bill makes its way to the Senate, county commissioners are still hoping for a “trigger” to be written into the bill to force the Legislature to revisit the issue in 2027, noting at that time that the companies will have only made up roughly three to six months of back payments. However, Novotny said he was pleased with many of the other provisions of the bill, noting that while there is still progress to be made, things are headed in the right direction.

“This is some of the most monumental tax policy change in years,” Novotny said. “So we’re cautiously optimistic.”