A bill that would lower the severance tax rate for coal from 7% to 6% is being proposed by Wyoming lawmakers, the Casper (Wyo.) Star Tribune reported Jan. 17.
If it becomes law, House Bill 104 would provide a level playing field for the coal, oil and gas sectors and would aid the Campbell County, a coal community that has been plagued by the long, drawn-out downturn in the sector.
"It's putting coal back on parity with oil and natural gas," the report quoted bill sponsor Rep. Scott Clem as saying. "They're taxed at 6 mills, and coal is taxed at 7 mills."
However, the reduction in tax rates for coal would mean a $9.4 million revenue loss to the state's general fund and $18.9 million to its budget reserve account in 2018. To compensate for the loss, Clem suggested reducing the number of state employees.
The proposal is being opposed by Lawrence Wolf, an industry lawyer and Cheyenne, Wyo., lobbyist.
"HB 104 is almost $30 million that the state will have to now come up with," the report quoted him as saying in an email. "Most coal contracts pass on the tax to the customers so the coal companies don't take the direct hit, or get the direct benefit.
"To the extent the severance tax is paid by the coal producer, under some contracts, this bill is just a direct transfer of wealth from the citizens of Wyoming to Arch or Peabody," he added.
The bill is in the House Revenue Committee and would be implemented July 1 if approved, according to the report.