CHARLESTON -- Following a day of politics on the touchy issue of taxes, the Legislature on Wednesday approved a $3.6 million spending plan for mining regulation in West Virginia, but rejected a tax on synthetic fuel producers to raise the money.
At least for now.
Lawmakers, meeting in a special session called by Gov. Cecil Underwood, provided $4 million for the governor's contingency fund, which is available at Underwood's discretion. The Senate approved the measure after Minority Leader Vic Sprouse, R-Kanawha, assured lawmakers that the governor had promised to use at least $3.6 million for the DEP's mining program.
The House also approved a request by Underwood for $4 million, which included $2.1 million of flood relief for six counties and $1.9 for economic development projects spread over 12 counties.
Lawmakers put off until Nov. 14 Underwood's proposal to issue a 50-cent per ton tax on producers of synthetic fuels to raise money needed by the DEP. Lawmakers said they need more information on the industry they're considering taxing.
"We thought a stopgap measure was the best way to go," said Senate President Earl Ray Tomblin, D-Logan.
"We didn't want to lose federal funding, so we knew we had to do something. But there were some concerns about issuing the 50-cent tax when we don't have conclusive evidence how much money the tax will bring in."
The Nov. 14 session would be a week after the general election, which pits Underwood against U.S. Rep. Bob Wise, the Democratic nominee.
A slowdown in the coal industry and federal demands for increased staffing at the DEP have created a cash crunch at the agency. The state needs the $3.6 million in state funding to capture $9.8 million in federal money.
The beefed-up funding would resolve immediate financial problems and address staffing demands by the U.S. Office of Surface Mining. The federal agency has directed the state to increase its mining staff by 58, to 286, or face a takeover.
Synthetic fuels, which are manufactured at several West Virginia sites, are produced by treating coal "fines" -- smaller, ordinarily unusable pieces of coal -- with a chemical agent that allows them to burn like coal, said Melanie Forbrick, a spokeswoman for Florida Progress, a synfuel production company that does business in West Virginia.
After meeting Wednesday with Jim Teets, Underwood's chief of staff, and DEP Director Mike Castle, the House of Delegates approved the proposed tax.
The House also approved a request by Underwood for $4 million, which included $2.1 million of flood relief for six counties and $1.9 for economic development projects spread over 12 counties.
The Senate Finance Committee rejected the proposed synthetic fuels tax and shrugged off Underwood's opposition to tapping general revenue.
The committee proposed legislation requiring tax officials to determine how much synthetic fuel is manufactured in West Virginia and how much money a 50-cent tax on producers would raise.
The Senate approved the measure, but not until after the House of Delegates voted to recess until November.
