West Virginia Gov. Earl Ray Tomblin launches bill to continue 2009 severance tax break for timber companies until state's workers' compensation debt is paid off

Wendy Lisney

LOS ANGELES , January 19, 2012 (Industry Intelligence) – West Virginia Gov. Earl Ray Tomblin launched three bills on Wednesday that are designed to reduce the tax burden on businesses, including legislation exempting timber companies in the state from severance taxes.

Tomblin hopes another of the bills will attract a so-called cracker plant to the state, which would convert ethane to ethylene. That bill offers a 25-year break from property taxes, The Associated Press reported on Jan. 18.

The timber tax break was originally approved in 2009, and Tomblin’s latest bill would continue the exemption.

Sen. Karen Facemyer, who comes from a timber family, said the legislation was needed because the industry is on “life-support.”

The industry will remain on hold until the housing construction market recovers, Facemyer said, adding that she was "very pleased to see the governor agreeing" that there needed to be some action on the situation.

Taxes paid by the industry on harvested trees had provided revenue to West Virginia’s Division of Forestry. According to state budget figures, the division’s share of general tax proceeds has increased to US$4.3 million, from $3.9 million in 2009. At the same time, the number of full-time positions has dropped from 73 to 68.

Tomblin’s bill proposes that timber remains exempt until severance tax revenues levied on other natural resources have been used to fully pay off a debt dating back to when the state ran a workers' compensation system.

That debt is expected to be paid by 2016.

The primary source of this article is The Associated Press, Charleston, West Virginia, on Jan. 18, 2012.

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