HB 4722

 

March 5, 2024 - 

 

HB 4722 Mine Infrastructure and Production Equipment Severance Tax Credit  

On Monday afternoon, the Senate Transportation and Infrastructure Committee amended the coal production tax provisions back into HB 4722 and passed it out of Committee. State Senator Mike Stuart authored and championed the amendment before the Committee which restores the legislation to the introduced version. The legislation was reported and read a first time before it was advanced to the Senate Finance Committee.  As introduced, the legislation provides for a 50% credit against severance taxes for qualifying mine infrastructure and mine production equipment purchases but not to exceed 20% of the taxpayers total severance tax liability. 

Below is a letter I've sent to all members of the State Senate encouraging their support for HB 4722. 

As previously noted,  Senators Rupie Phillips (Vice Chair Finance) and Randy Smith can be very instrumental in our efforts to effectuate a favorable outcome in the Senate. Please contact them and other members of the State Senate that represent your operations.  

Please give Jason or me a call if you have any questions.  

 

DRAFT 

 

Dear Legislator  

Re:  HB 4722  

I am writing to ask your favorable support for HB 4722  during the current legislative session. The legislation has passed the House and is before the Senate. 

This legislation will incentivize greater investments in the future of the coal industry while keeping our miners and their families gainfully employed.  

With all the pressures to move away from coal generation and myriad anti-coal regulations coming out of Washington DC, we implore you to work with us to ward off President Biden's job killing measures and to help shore up our states leading industry so important levels of income tax, property tax and coal severance dollars and overall local commerce can continue to support future state economies.  

The introduced version of HB 4722 provides a 20% reduction against coal severance liabilities for companies that reinvest back into a mine's infrastructure or production equipment. This is not a giveaway or scheme to merely reduce the severance tax liability, although we are competing against neighboring  states for limited markets that impose little or no severance tax.  The reduced (20%) severance from implementation of HB 4722 would only apply if a company reinvests to extend or grow its mining operation so it could continue to employ miners and generate commerce for our state.  

We understand there maybe a revenue shortfall and a pending federal clawback, however, it has been an increased in coal severance dollars that has allowed our for the reduction of other taxes, teacher pay raises and growing our states rainy day funds to unparalleled heights.

 

Arguably, dollars from coal severance collections have also been used in part, to provide fiscal incentives and non-payback loans to new companies locating within our state's boundaries. We have been generally supportive of the state's efforts to diversify our economy and industrial base.  

However, 2024 will be a difficult year for our states coal industry. Prices are dropping, coal markets are shrinking and President Biden's EPA, Fish and Wildlife Service and MSHA continue to carry out the Administration's objective to eradicate coal and coal mining from our nation's energy mix. This past week, saw the President doubling down on this mission by removing natural gas operations from his signature onerous proposed carbon rule and reasserting 100% of the focus on West Virginias and our nations coal fleet.  

The time to help coal and our states coal miners is today. Even if full implementation of HB 4722 is delayed or phased in, the industry could begin planning today and account for this important feature in its current budgeting and planning cycle. Every day counts with respect to mine planning, permitting, manpower development and equipment acquisition. Financing challenges and supply chain disruptions continue to hinder every aspect of mine development so every hour in every day is used to derive at future certainty. 

In sum, no other business or industry means more to the future of our state and behalf of the 50,000 men and women that work in our state’s coal industry, I urge your favorable support for HB 4722 this legislative session.  

Thank you for your support.  

Chris Hamilton 

February 25, 2024 

To:  WVCA General Membership 

From:  Chris Hamilton 

Re:  HB 4722 Mine Infrastructure and Production Equipment Severance Tax Credit  

Late Friday evening (February 23), a committee substitute for HB 4722 was adopted by the House Committee on Finance effectively keeping the legislation alive this legislative session.  

The introduced version of HB 4722 provides for a credit against severance taxes for qualifying off-site highway or road infrastructure projects and mine production equipment and mine infrastructure.  However, the committee substitute adopted Friday removed the mine production and infrastructure section from the bill, leaving only the public highway and road provisions. 

HB 4722, as amended, is scheduled to be reported tomorrow and must pass the House of Delegates by Wednesday this week in order to be considered by the Senate before the conclusion of the current legislative session on Saturday, March 9. 

We plan to begin work the bill in the Senate to see if some variation of the mine production equipment credit can be restored. We will also attempt to arrange for Senate President Craig Blair to attend our legislative meeting planned for Thursday, February 29. 

Senators Rupie Phillips and Randy Smith can be very instrumental in our efforts to effectuate a favorable outcome in the Senate. Please contact them and other members of the State Senate that represent your operstions.  

Please give Jason or me a call if you have any questions.  

Thanks,  Chris