Additional Tax for Benefit of Counties

6.1. Additional Tax on Production of Coal for Benefit of Counties. -- The additional tax on the severance, extraction and production of coal, dedicated for the benefit of counties and municipalities pursuant to W. Va. Code §11-13A-6 has already been included in the listed rates under W. Va. Code §11-13A-3 and Section 3 of these regulations. The Tax Department will perform all necessary calculations to insure that the thirty-five one hundredths of one percent additional tax imposed pursuant to W. Va. Code §11-13A-6 will be segregated from the overall tax liability calculated in W. Va. Code §11-13A-3 and the revenues distributed according to the provisions of W. Va. Code §11-13A-6.

The fund for the additional tax on production of coal for benefit of counties shall be calculated based upon thirty-five one hundredths of one percent of the overall severance tax liabilities of coal producers prior to application of credits to which the taxpayer is entitled. The shortfall in severance tax collections under W. Va. Code §11-13A-3 attributable to available credits shall be made up out of the State's share of actual severance tax collections after application of all available credits. Thus, the total additional tax on production of coal for benefit of counties will be thirty-five one hundredths of one percent of the coal producers gross proceeds of sale subject to severance tax. Seventy-five percent of the total additional tax on production of coal shall be deposited in the "county coal revenue fund" with the remaining twenty-five percent to be deposited in the "all counties and municipalities fund."

When calculating the distribution of the additional tax on the production of coal for benefit of counties, the credits taken by producers shall not be taken into account. The share a county is entitled to from the "county coal revenue fund" under W. Va. Code §11-13A-6(f) shall be determined by: 1) Dividing the total amount in the "county coal revenue fund" then available for distribution by the total number of tons of coal mined in this State during the preceding quarter; and 2) multiplying the quotient thus obtained by the number of tons of coal removed from the ground in such county during the preceding quarter, without regard to whether the mining of the coal in each county resulted in severance tax collections from such mining.

Pursuant to the Court Order Thirteenth Judicial Circuit in Civil Action No. 88-C-660, producers of coal shall report the number of tons of coal mined in each county based on the location of the coal in place prior to removal. For the purpose of determining the distribution of the "county coal revenue fund" to individual counties pursuant to W. Va. Code §11-13A-6(f) coal shall be deemed to be severed from the seam in which it was embedded, in or under such counties after April 1, 1991, without regard to where said coal is brought to the surface or portaled.

6.2. Errors in Distribution of Additional Tax for Benefit of Counties. -- In those instances where an error occurs in the distribution of the additional tax for the benefit of counties, whether the error is the result of erroneous reporting by the coal producer of the county in which the coal is severed or is the result of a miscalculation in the quarterly distribution of the county coal severance funds, the State Tax Commissioner shall have full and complete authority to require full restitution of any overage erroneously distributed to one county and transfer the amount of overage so erroneously distributed to the county which was entitled to those funds.

In ordering the repayment of funds wrongfully distributed the Tax Commissioner shall allow repayment to occur over the same number of quarters as those in which the error in distribution continued, with the repayment to begin in the quarter next following that in which the county receives written notice of overpayment. Repayment may be made by withholding the amount due from current distributions due the county during each of these quarters, where the distributions are sufficient to meet the repayment schedule.

Nothing in this section shall prevent the counties involved from entering a written agreement to accomplish a mutually agreed upon redistribution of funds to correct the error, as an alternative to the Tax Commissioner's repayment plan.