Reduced Revenue Severance Tax Operational Fund Transfers

Joint Budget Committee. Under current law, money is transferred from the severance tax operational fund (operational fund) to certain cash funds to benefit programs that are commonly referred to as the tier 2 programs. On June 30, 2018, the bill requires the state treasurer to transfer money to the operational fund from the following cash funds to recoup money that was previously transferred in this fiscal year for tier 2 programs: $727,888 from the species conservation trust fund ( section 8 of the bill); $18,488 from the special account in the general fund used by the mined land reclamation board for reclaiming certain lands ( section 10 ); $80,068 from the water efficiency grant program cash fund ( section 11 ); $108,465 from the interbasin compact committee operation fund ( section 12 ); and $1,455,776 from the water supply reserve fund ( section 14 ). Section 9 transfers to the general fund $393,272 from the division of parks and outdoor recreation aquatic nuisance species fund and $189,912 from the division of wildlife aquatic nuisance species fund. To replace funding from the operational fund, the bill requires the state treasurer to transfer the following amounts on July 1, 2018, from the general fund to pay for tier 2 programs for the next fiscal year: $954,545 to the forest restoration and wildfire risk mitigation grant program cash fund ( section 1 ); $1,186,363 to the healthy forests and vibrant communities fund ( section 2 ); $3,000,000 to the species conservation trust fund ( section 3 ); $45,455 to the wildland-urban interface training fund ( section 4 ); $86,364 to the wildfire preparedness fund ( section 5 ); $127,000 to the special account in the general fund established by the mined land reclamation board ( section 6 ); $450,000 to the conservation district grant fund ( section 7 ); $2,452,193 to the division of parks and outdoor recreation aquatic nuisance species fund (section 9); and $1,184,171 to the division of wildlife aquatic nuisance species fund (section 9). Section 16 further appropriates the $3 million transferred to the species conservation trust fund for programs submitted by the executive director of the department of natural resources that are designed to conserve native species that state or federal law list as threatened or endangered or that are candidate species or are likely to become candidate species as determined by the United States fish and wildlife service. If, prior to July 1, 2018, there is insufficient money in the severance tax reserve, which is used to make severance tax refunds, then under current law, money would be recouped from the various severance tax cash funds in order to make the refunds. Section 13 requires income tax revenue that would otherwise be deposited in the general fund to be deposited in the reserve to make the refund instead of recouping money from the operational fund. Section 15 requires the state treasurer to make 3 transfers from the general fund to the operational fund: $17,030,925 on July 1, 2018, which amount will fund the programs commonly known as the tier 1 programs; $3,000,000 on January 1, 2019; and On July 1, 2019, an amount equal to the operational fund reserve required for the fiscal year commencing on July 1, 2019, or $14,214,854, whichever is less. The transfers made in 2019 will be used to fund the tier 1 operational fund reserve. To offset the general fund transfers, section 14 requires revenue, up to a maximum of $40,942,016, that was or otherwise would be deposited in the operational fund from February 1, 2018, through June 30, 2019, to instead be transferred or deposited in the general fund. It also requires the department of revenue to submit an annual report to each member of the general assembly about revenues, property tax credits, stripper well exemptions, and deductions for the oil and gas severance tax. Section 15 also prohibits the state treasurer from making any transfers from the operational fund to benefit the tier 2 programs for the next fiscal year, unless severance tax receipts are deposited in the operational fund during the fiscal year and there is sufficient money in the operational fund reserve so that no transfer will be made to the fund from the general fund on July 1, 2019. (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.) , Read More