Bill Seeking To Cut Severance Tax Rate Dies In House Committee

Mar 5, 2018

Senate President Eli Bebout discusses SF-98 with the House Revenue Committee
Credit Cooper McKim / Wyoming Public Radio

A bill seeking to incentivize more oil and gas production has died in the House Revenue Committee with a 6 to 3 vote. Senate File 98 would have cut the severance tax rate for oil and gas in half after the second year of production until the end of the fourth.

Buffalo Representative and Chairman of the House Revenue Committee Mike Madden said he didn’t understand why that timeline was important. During the hearing, he asked supporters of the bill several times to explain, though no one had a concrete answer. 

“It didn’t make sense to me to say, ‘Well, in the middle of the production curve, we’re going to cut it, and then raise it back again after 48 months.’ It just didn’t connect with me,” Madden said.

He added research into the legislation’s impact should come before the bill. 

“It doesn’t make any sense to change it and then regret it later and then have to change it back,” Madden said.

Several spoke in support of the bill including Joe Milczewski, a government affairs manager for Anadarko Petroleum. He said Wyoming’s tax rates are particularly high compared to competitors and that this bill would incentivize more production. 

“If this would have gone through it would’ve helped with any project in the state. Because our corporate boardrooms are all looking for places to deploy capital, and Wyoming overall is more expensive on oil and gas production than other states.” 

Many opponents to the bill said SF-98 would cost the state money and reduce revenue. Milczewski said it’s a hard thing to explain why lowering taxes would increase activity. 

"We felt like it would. The committee didn’t agree, but we’ll keep talking to ‘em,” he said. 

There will be discussion during the interim session about how Wyoming’s tax rate fares against other states in regard to mineral companies.