GILLETTE — While the state Legislature debates whether to require companies to pay mineral production taxes on a monthly basis, the monthly payment plan agreement between Campbell County and Eagle Specialty Materials has shown that it can work.
ESM, which bought the Eagle Butte and Belle Ayr coal mines from Blackjewel LLC last year, has made three monthly payments totaling about $1.8 million on mineral production for the second half of October, November and December.
County Administrative Director Carol Seeger said the county created a reporting form that is similar to the one the state uses for severance taxes.
Commissioner Rusty Bell, who has testified at legislative committee meetings in favor of House Bill 159 — which would require all ad valorem taxes to be paid monthly — said Campbell County and ESM are setting an example for the rest of the state.
“It can be done, and it can work,” he said of monthly payments.
“It is exciting,” Seeger said. “I was very excited when this happened.”
So far, Commission Chairman D.G. Reardon is happy with what the county and ESM have going on.
“Hopefully, they can continue to do that, stay caught up to what the tax structure is that we put in place and we continue to do business far into the future,” he said.
As far as using this as a blueprint for other companies, each business is unique, Reardon said. Although Campbell County and ESM may have set a framework, “every (company) is going to have to be looked at differently,” he said.
For years, minerals producers have opposed monthly payments for a number of reasons, the largest one being the claim that it would put them out of business. Now, with ESM’s plan, that argument doesn’t have as much to stand on anymore.
“I’d hate to speak as to why they think they can’t (do monthly payments),” Seeger said. “Clearly, it can (work).”
HB 159 was sent to the Senate Revenue Committee after passing the House on a 40-19 vote.
On Thursday, the bill got out of committee on a 3-2 vote. Sen. Ogden Driskill, R-Devils Tower, was one of the three yes votes, along with Sens. Cale Case and Bo Biteman.
Late Friday afternoon, the bill passed the Senate Committee of the Whole. It has to pass two more readings, then go to the House for a consensus vote. If the House says no, then the Senate and the House will have to go to conference to work out their differences.
“It’s not out of the woods. It’s got to pass a hurdle every single day until the Legislature’s over,” Bell said, adding that besides the budget, this might be the most important bill of the session.
Bell has attended every committee meeting where the bill has been discussed. He said it’s been good, a lot of testimony has been given and at times it’s been contentious.
“It’s a big deal for taxpayers of Wyoming, and industry, because it’s change and change is hard, especially when times are hard,” he said.
Sen. Michael Von Flatern, R-Gillette, said there have been a lot of amendments made to the piece of legislation, and its current form is “nowhere near” the original bill.
“It’ll probably get out, but it’s not the bill we wanted,” he said.
“It’s gotten extremely flexible,” Bell added.
If a company wanted to opt out of the monthly payment schedule, it could do so, but it would have to petition the county to work out a payment plan of its own and go through a public comment period.
The way the bill looks now, by 2027, companies would have to pay mineral production taxes every month, but on production from 12 months prior. It’s better than counties receiving the tax payments 18 months to two years after the mineral was taken out of the ground.
But the original bill made it so that companies would have to pay monthly on mineral production from two months before, starting in 2023.
“We knew this was going to be a long process,” Bell said. “This can’t happen over night. This is a big deal. Industry has to have time to work this out for their cash flow.”
Counties have asked for a monthly payment schedule for six years, Bell said. This bill, if it passes as written, would do that, albeit not as quickly as some would like.
It deserves the support of counties, he said.
Even if House Bill 159 does pass, Von Flatern said there’s a lot of work to do. He’s brought it up as an interim topic for the Minerals Committee, of which Sen. Jeff Wasserburger, R-Gillette, is a member.
Bell said everyone, even those who oppose the bill, think that getting to a monthly payment system is the right thing to do.
“It’s just that getting the right system that works for everybody is very difficult,” he said.