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Committee trims proposed energy severance tax in HB 326 to 2% for new contracts; amendment passes, bill later fails 8-13 and is tabled
Summary
House Bill 326's amendment changing a proposed energy severance tax rate from 10% to 2% for new contracts passed the committee 12-9. The bill itself failed on final roll call 8-13 and the committee then voted to table the measure (21-0). Debate centered on which energy sources would be taxed and economic impacts on renewables and coal markets.
The House Taxation Committee considered executive action on House Bill 326 and approved an amendment that reduced the proposed energy severance tax rate from 10% to 2% for new contracts; that amendment passed on a roll-call vote of 12 ayes to 9 nays. On a subsequent roll-call vote the bill as amended failed 8 to 13, and a motion to table the amended bill passed by voice/proxy vote 21-0.
Megan Moore, committee staff, summarized the amendment: it revises the tax rate for a new energy severance tax from 10% to 2% and makes the tax applicable to the sale of energy under new contracts entered after the bill's effective date. Moore also noted the amendment retains a separate coal severance tax in statute and that an exemption for electricity generation from coal-fired steam turbines remains in the bill's text.
Representative Thain said the exemption carved out for coal-fired steam turbines and the distinction between coal severance (a tax on extracting coal) and a generation tax informed his opposition to parts of the measure. Representative Konauer and others argued the change could affect the competitiveness of renewable energy projects and alter markets for coal, with implications for jobs and local revenue. Representative Zelenikoff said the amendment made the bill better but expressed reluctance because the tax also could apply to hydro and natural gas and would eventually apply when contracts are renewed.
Roll-call and procedural actions: the amendment (reducing the proposed rate to 2% and limiting applicability to new contracts) passed 12-9; the bill as amended failed on final passage 8-13; members then approved a motion to table the bill by voice/proxy 21-0.
