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Revenue committee advances bill letting county treasurers escrow mineral estimated payments
Summary
The Senate Revenue Committee approved Senate File 151, allowing county treasurers to hold mineral estimated overpayments in escrow and refund producers at the year-end true-up; overpayments would be returned without interest, committee members said.
The Senate Revenue Committee on Wednesday passed Senate File 151, a bill that would let county treasurers place monthly mineral estimated payments that later prove to be overpayments into escrow and refund mineral producers after the annual true-up.
Senator Jones introduced the bill, saying the current practice distributes estimates using the previous year’s mill rate and does not apply the current year’s mill until a September true-up. "They are receiving funds not due to them, and then they're required, to not spend the money and return that to the county," Jones said, explaining the proposal would let treasurers "keep those estimated payments in escrow" to avoid repeated back-and-forth transfers.
Sweetwater County Treasurer Mark Cowan testified in support, saying the bill addresses a specific situation in his county this year. "This bill is one that I've worked with Senator Jones on," Cowan said. He described the escrow as a way for smaller entities to avoid accepting payments they ultimately must return at true-up.
Committee members asked procedural and technical questions. Senator French asked whether interest is earned on funds while held in escrow and who would keep it. Cowan and other witnesses said the overpayments would be returned to the mineral producer without interest. As explained to the committee, under current practice the entity that received the distribution would hold any interest until repaying the producer; under the bill the funds would be held in escrow and returned without interest.
After brief public testimony and committee discussion, Senator French moved the bill and Senator Pappas seconded. The committee conducted a roll-call vote; members recorded as voting "aye" were Senator Case, Senator French, Senator Eyed, Senator Pappas and Chairman McEwen. The clerk announced that Senate File 151 "has passed the revenue committee." The committee did not adopt any amendments during the meeting.
Senate File 151 would change distribution practice for mineral estimated payments by authorizing county treasurers to hold and refund overpayments at the true-up instead of having recipient entities receive then later return money. The bill specifies refunds to producers would be without interest, according to testimony to the committee.
Supporters said the bill reduces administrative burdens on smaller taxing entities and county staff by eliminating repeated transactions. Opponents did not appear at the committee to testify against the measure during the hearing.
The committee forwarded the bill to the next stage with the recorded vote and without substantive amendment; the Department of Revenue and county treasurers were listed as supporters during committee testimony, and the bill sponsor indicated county treasurers might participate on Zoom to answer technical questions going forward.
