Ducks and squalls

The headache of Senate File 60 and ad valorem taxes is continuing for county treasurers and will likely turn into one for county assessors as well.

At the June 1 meeting of the Board of Carbon County Commissioners (BOCCC), Treasurer Patty Bentsen gave an update on the progress, or lack thereof, the Wyoming County Treasurers Association (WCTA) had made in speaking with the Wyoming Department of Revenue. According to Bentsen, the WCTA had met with both the Wyoming County Commissioners Association (WCCA) and the department of revenue a week prior.

“I’m sad to report we’re not any closer,” said Bentsen. “I just got an email today and Director (Dan) Noble believes that we should work with our assessors to try to find out where these parcels are going to be so the treasurers can distribute the money.”

Bentsen added she was “at a loss” and described the forthcoming implementation of the new payment schedule of ad valorem taxation of mineral production as “driving into a squall”.

“It’s just going to be a mess,” Bentsen said.

At the time of the meeting, a special session of the Wyoming Legislature was still scheduled for July. The county treasurer informed the BOCCC the decision of whether payments would continue on a biannual basis or switch to a monthly basis would be made then. 

Just three days later, however, Governor Mark Gordon and legislative leaders announced there would not be a special legislative session. The announcement came after the State of Wyoming received $534 million in funds from the American Rescue Plan Act.

As discussion continued, Commissioner Sue Jones inquired if a provision existed in which the county could opt out of the monthly payment process and continue with biannual payments. 

“I know we’d have a lot of sign off but until the State of Wyoming gets their ducks in a row, which many times they haven’t seen the ducks ever rounded up,” said Jones.

Bentsen confirmed such a provision existed, adding Sublette County was doing biannual payments with larger mineral production companies. The treasurer stated she wasn’t sure if it was an option the BOCCC would consider and so hadn’t reached out to any companies operating within Carbon County.

Carbon County Clerk Gwynn Bartlett added the provision did not allow the county to opt out entirely but would allow companies to individually opt out of monthly ad valorem payments.

“That’s what I’m talking about is we have the companies opt out of this monthly payment. I don’t know what the timeframe (is) but I do remember there was discussion of having it,” Jones said. “It’s a huge mess the way it’s set up right now and the department of revenue is not ready for it and when they don’t even know what the parcels are—which was their job to do in the first place—and then they’re dumping it on the county. They have the expertise to deal with that, or used to, and not our assessors. They’ve got other things to do besides hunt oil and gas parcels.”

Jones also took issue with the option within the forthcoming law to allow counties to take out loans on behalf of special districts and called it “a disaster in the making” and said the idea sounded much simpler than the end result. 

To add onto the headaches felt by the county treasurers as they prepare for the switch to monthly payments, Bentsen informed the BOCCC the task of informing all oil and gas companies had been placed on them by the department of revenue.

“We would have to send notification to DOR (Department of Revenue) to let them know who opted out so they wouldn’t bill them. Then, it creates a bigger problem when we do our tax roll in August as far as who we’re not going to bill and who we are going to bill,” said Bentsen. “It’s just a mess and I’m at a loss other than I think it would be a good idea to see if we couldn’t maybe reach out to some of them and say ‘Can we just do it this year? Collect it semi-annually?’”

The point was made by Bartlett having a combination of oil and gas companies who paid monthly and biannually would potentially create a larger headache for both the treasurer’s office and the assessors office. She also made the point it would likely require additional staff.

The ability for companies to “opt out” of monthly ad valorem payments, while not included in Senate File 60, was in House Bill 159. House Bill 159, which was introduced and passed during the 2020 Budget Session, created section 39-13-113 of the Wyoming State Statutes, specifically 39-13-113(f), which details how a taxpayer could enter into an agreement with a county for biannual payments.

Under this subsection, the county would need to establish uniform eligibility criteria and an application process and would also need to conduct at least one public meeting related to the proposed agreement. Additionally, all taxing authorities affected by the agreement would need to be notified 14 days prior to the meeting. 

The only taxpayers who would be eligible for the agreement, however, would be those who acquired property before the passage of House Bill 159 on March 24, 2020.

“I feel like we’re under the gun timewise to be able to draft, reach agreements and have a public hearing prior to this law coming into place,” said County Attorney Ashley Mayfield-Davis.

As discussion continued, Bartlett informed the BOCCC other counties were currently doing monthly ad valorem payments for mineral production and it was providing a consistent cashflow. Jones, in response, stated while that had been the original intention of House Bill 159 and Senate File 60, it had become far too complicated.

“For me the original intent, as Commisioner Jones so eloquently said, is to limit the burden and clarify the process for the county to avoid bankruptcies and so on to clean up the system. It comes back to ‘Be careful what you ask for’ because then they just pass the buck which then taxes the capacity of both the assessors and treasurers office to do the leg work that we counted on the department of revenue to do,” said Commissioner Travis Moore. “It’s frustrating at best.”

While no formal action was taken, Bentsen thanked the commissioners for their offer on May 18 to write a letter in support of the WCTA.

The Board of Carbon County Commissioners will have met on June 15 at the Carbon County Courthouse in Rawlins. The next meeting of the Board of Carbon County Commissioners will be at 9 a.m. on July 6 at the Carbon County Courthouse in Rawlins.