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Senate committee removes sunset on coal‑washing tax deduction, advancing SB 333
Summary
The Senate Energy Committee voted to advance Senate Bill 333, which removes the sunset on a coal‑washing deduction that allows mines to deduct coal‑washing costs from the contract sales price used to compute severance taxes. Proponents said the change helps local mines and boosts state severance tax revenue; no opponents testified.
The Montana Senate Energy and Telecommunications Committee advanced Senate Bill 333 on a unanimous voice vote after proponents, including the bill sponsor and industry representatives, urged lawmakers to repeal the deduction's sunset.
Sen. Barry Usher, sponsor of SB 333, told the committee the bill "repeals the sunset on [the] coal washing tax credit that was first enacted in 02/2009," and said the measure will help "maximize coal severance tax revenue and ... help keep one of our mines going strong." The bill would let mines continue to deduct the cost of coal washing from the contract sales price used to calculate severance taxes.
The Signal Peak Energy operation in the Bull Mountains near Roundup drew several proponents. Charles Denow, testifying for Signal Peak Energy, described the company’s longwall underground mining process and the wash used to remove rock and other impurities. "The coal washing process adds value to the coal and results in a higher contract sales price," Denow said. "That's good for the state because it maximizes the tax revenue that we get from that coal."
Local officials and business groups also supported the bill. Sandra Jones, mayor of Roundup, said Signal Peak Energy "has contributed millions" in severance tax revenue to the state and is the largest tax contributor in Musselshell County, supplying about "one third of the tax base for the county." Dan Brooks of the Billings Chamber of Commerce and Shelby Demars of the Montana Association of Oil, Gas and Coal Counties likewise asked the committee for a do‑pass recommendation.
No witnesses registered opposition during the hearing, and the sponsor closed by repeating his request for a "do pass." The committee later returned to the bill and moved it forward on a voice vote.
Votes at the committee recorded on the hearing record show SB 333 advanced out of committee by voice vote; committee minutes list the motion to pass moved during the later floor of the hearing.
Why it matters: The bill preserves a tax treatment that proponents say encourages production of a higher‑quality, premium product that sells at higher contract prices and therefore increases severance tax receipts. Supporters tied the measure to jobs and county revenues in areas hosting the Signal Peak operation.
What’s next: SB 333 will go to the full Senate for further consideration.
