Campbell County Commissioners have used a new law for the first time to recoup some of the county's legal fees from bankruptcies.
During the 2018 budget session, state legislators passed a law that allows counties to deduct what are called "extraordinary costs," such as court costs and legal fees from outside the county, from ad valorem taxes before they are dispersed. Those are like severance taxes that pay for local services and state education funds.
Campbell County Commissioners put the law to use to regain more than $1.3 million in legal fees incurred between August 2018 and October 2019 from five bankruptcy cases across four states.
"This arose, of course, with some of the more complex bankruptcy cases we were involved with across the country," Carol Seeger, the commission's administrative director, said.
The cases include two cases with Vanguard Natural Resources, Alpha Natural Resources, Cloud Peak Energy, and Blackjewel. Some of those cases are still ongoing.
Seeger said the taxes the county was seeking range through tax years 2015-2019.
County Commissioner DG Reardon said he doesn't usually like hiring law firms outside of the county, but in these cases it's been worth it.
"We spent $1.3 million, or a little bit above that, to recover over $13 million in taxes. And I think that's an investment that's well worth our money for the county," he said.
Reardon said the county is continually developing better ways to handle bankruptcies.
"It's a lot of hard work....And we are learning as we go here on some of these bankruptcies. And hopefully with the new bills that are going to the legislature and some of the bills that are passed, we can do a better job of protecting the county and the county's interests just as far the taxes that owed and recovering the county's taxes," he said.
Seeger, said to her knowledge, Campbell County is the first in the state to use the law.
The officials thanked House Majority Floor Leader Eric Barlow, the bill's sponsor, for getting the law passed.
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