PINEDALE – An almost rowdy atmosphere among the Sublette County Board of Commissioners in its Tuesday meeting dissipated under the gravity of its closing discussion inside the Pinedale Library’s Lovatt Room.
County treasurer Emily Paravicini approached the board regarding Jonah Energy’s request for an exemption on monthly Ad Valorem tax payments as laid out by recently passed Senate File 60 in the Wyoming State Legislature. Following over 100 minutes of discussion, the board voted to not implement an exemption application but agreed to further study the potential for exemptions in the future.
During its April 20, the board decided to form a working group to analyze the pros and cons of a possible exemption. That group consisted of state representatives, commissioners, Paravicini and deputy county attorney Clayton Melinkovich. On Tuesday, those gathered got into the realities of an exemption and what it would mean to Sublette County.
Paravicini said, for the sake of fairness and legality, the same exemption would have to be offered to every energy company. And, as long as the company was in good standing, it would be granted the exemption.
“How this changes is rather than those oil and gas companies that have $30,000 or more in severance due, they have to go to the payment monthly starting in January 2022,” Paravicini explained. “What that looks like is us getting those revenue dollars in about May or April for distribution in either May or June, depending on when we get those monies.”
In a monthly payment schedule, companies make smaller payments in that set schedule, as opposed to the large installment payments.
Paravicini explained that in the second half of 2021, those taxes on production go towards a payment plan, essentially, that includes 8 percent due every December going out to 2023. That further spreads payment out over years.
So Paravicini and Melinkovich brought forth a blanket exemption form to the board. Melinkovich said they could add terms of length on the exemption and even add a clause that the exemption would be voided if a company misses a payment or neglects to pay taxes altogether – because the county currently has both, Paravicini said.
Paravicini said she wanted to address NOVCs. She proposed the county waive interest if a company paid close to what was initially reported, which could put less money in the county’s coffers but would achieve Paravicini’s preference of reporting payments as accurately as possible to avoid abatements for the county. That would also avoid large supplemental payments for the company to the county.
Melinkovich said, as of now, the county doesn’t have leverage or anyway to incentivize accurate reporting pertaining to NOVCs. The Jonah Energy legal team did not have any ways to minimize risks with NOVCs, Melinkovich said.
The exemption would only apply to existing producers, or consistent owners of existing assets, in the county. New producers in Sublette County would not qualify for an exemption.
While asking for an exemption in the late April commissioners’ meeting, Jonah Energy vice president of governmental and regulatory affairs Paul Ulrich said a change to scheduled payments could cost Sublette County $5 million. Paravicini and Melinkovich told the board on Tuesday to throw that number out because they couldn’t find where that number came from.
Paravicini said she anticipates a 50-percent reduction in budget upcoming. Commissioner Tom Noble reiterated that, based on current projections, that reduction is actually 29-percent.
Commissioners even invited Vern McAdams, director of business and operations at Sublette County School District No. 1, for his opinion on the matter since the school district is funded by the energy sector. McAdams weighed the county’s options out loud and said he’d want a deeper dive into the issue.
Commissioner White said he wanted to look into possible exemption fallout with the intention of getting dollars in the county’s hands sooner rather than later.
Commissioner Vickrey voted for no exemption application. Commissioner Tom Noble said he wasn’t comfortable signing off on an exemption application until the board knew ramifications of that potential action.
Commissioner Dave Stephens OK’d going forward with the deeper look but was not OK going forward with an exemption application with what the board was aware of at the time.
Commissioner Joel Bousman supported moving forward with digging into ramifications of an exemption.
It’s the board’s stated intention to speak with the county’s tax beneficiaries later this month to hear their feedback on a possible exemption.