Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Energy Policy topic
No spam. Unsubscribe anytime.
House approves 10-year tax exemptions to encourage oil‑shale and tar‑sands research
Summary
First substitute Senate Bill 241 passed the House after debate over fiscal impacts and long-term incentives; sponsors described a 10-year severance-tax exemption and limited R&D sales exemptions to spur industry development, with supporters citing large recoverable resource estimates.
The House approved first substitute Senate Bill 241, a Natural Resources and Development measure that would exempt oil shale, tar sands and coal-to-liquids technologies from severance tax for 10 years and exempt certain sales of property used in research and development. Representative Mathis said the change is designed to kick-start research and private investment in Utah’s energy resources.
Mathis cited a Department of Energy estimate of roughly 1.25 trillion barrels of recoverable oil in northeastern Utah and surrounding areas and argued the exemption would encourage experimental R&D. He told colleagues the exemption would be reviewed after 10 years and framed the bill as an investment in future industry development.
During floor questions, members pressed the sponsor on fiscal implications and long-term viability. Representative Mascaro and Representative Farrin noted the original fiscal note and asked whether potential income-tax offsets from future economic activity were being considered. Mathis said the original fiscal note was $2 million but that the first-substitute reduced that figure to $40,000 based on current assumptions and BLM lease activity.
Supporters argued the bill is a fair incentive to encourage research in a field that currently generates no severance-tax revenue for the state; opponents' concerns on economics and timing were raised but did not prevent final passage. First substitute SB 241 passed the House with 70 yes votes and will be signed by the Speaker and returned to the Senate for the president’s signature.
