Montana hearing on HB 326 would tax electricity sales from in-state generation; opponents warn of lost projects

Representative Gary Perry introduced House Bill 3 26, the State Energy Resource Severance Act, proposing a tax on sales of electricity produced in Montana and a new energy severance trust aimed at creating legacy revenue for the state.

Perry, who represents House District 35, told the House Taxation Committee the bill would put Montana ‘‘first’’ by capturing value from energy produced in the state and directing legacy dollars to a permanent fund and to a proposed state energy authority. ‘‘I want Montana to be the energy hub for the Northwest for many generations to come, but I want there to be commensurate legacy dollars for Montanans,’’ Perry said during his opening remarks.

The sponsor described the measure as intended to produce funds for infrastructure needs — water and sewer repairs, roads and other local projects — and said the bill would exclude coal-fired generation from new taxation initially because coal already pays a 15% severance tax (he later proposes reducing that coal rate to 10% in the bill). Perry said the permanent fund in the bill would cap deposits at $250,000,000 and that other sections outline allocations to an energy authority and to project funding.

Nearly three dozen witnesses opposed the bill in a hearing that drew representatives from utilities, renewable developers, rural electric cooperatives, state agencies and local chambers. Opponents consistently argued the bill, as…