FIFTY-SIXTH WYOMING LEGISLATURE

APPROVED INTERIM COMMITTEE STUDIES

2001-2002

JOINT MINERALS, BUSINESS AND ECONOMIC DEVELOPMENT INTERIM COMMITTEE

Topic #1:  Better define gathering and transmission for both royalty and taxation in valuing natural gas, oil and condensate.  The Committee initially will focus on these issues as they relate to coalbed methane.

·         The topic involves three issues:  1) According to the Department of Revenue, audits of producers indicate different points of valuation and custody transfer are being used; 2)  There has been litigation regarding claims by private royalty owners and the state that producers are deducting costs not entitled to deduction for royalty payment purposes; and 3) The peculiarities of coalbed methane (CBM) gathering and transmission present a new set of problems which need to be addressed.

·         The Committee will review these issues, including reviewing the cases, to determine what, if any, legislation is needed to clarify the point of valuation for tax or royalty purposes.

Topic #2:  Regional Haze.

According to DEQ, under federal law Wyoming will need to make decisions regarding this issue before the Fall of 2003.  DEQ will advise the Committee regarding the requirements and options under the federal regulations governing regional haze.  The Committee can then weight its options: 1) Pursue legislation needed for Wyoming to fall under a particular regional haze federal regulation; 2) Not pursue legislation which would result in the state falling under different federal regulations.

Topic #3:  Distribution of Severance Taxes on Certain Natural Gas Wells.

Administrative problems arise in distributing severance tax collected from natural gas wells less than 2,000 feet in depth pursuant to W.S. 39-14-211(j).  That provision requires that one-half of the 4% severance taxes collected from shallow wells be deposited in the permanent Wyoming mineral trust fund.  The Department of Revenue is unable to enforce the provisions at this time.  The Committee will review the specifics of this issue and recommend any legislation needed to address it.

Topic #4:  Energy Rate Relief.

Topic #5:  Items for the Committee to Monitor:

·         Implementation of the voluntary remediation of contaminated sites legislation with respect to "orphan" site remediation.

·         Wyoming Energy Commission (SF 185).  Under the bill, the commission is to provide a preliminary report to the Committee by December 15, 2001.