Senate advances bill to set aside oil-and-gas severance revenue into trust fund with delayed effective date

Sen. Hilliard (sponsor) and Sen. Stevenson led debate on Senate Bill 202, a statutory plan to put a share of oil-and-gas severance-tax receipts into a trust fund rather than spending all receipts annually.

Sponsor explained the bill uses a three-year rolling average ($28 million, as described on the floor) as a baseline; revenues above that base would be directed into a statutory trust similar in design to a tobacco settlement trust. "The essence of the bill is that we took a 3 year rolling average...and said that that should be our base," the sponsor said, describing the way interest from the fund would flow to the general fund while principal is preserved. He said the statute would not take effect until after a pending constitutional amendment providing authority to place additional funds in the trust is adopted; the sponsor offered three floor amendments (two effective-date changes and one corrected cross-reference) that were adopted from the floor.

Sponsor framed the approach as a trial statutory mechanism to allow fine-tuning before considering constitutional placement. After debate the Senate recorded 24 yes, 1 nay and 4 absent; the bill was set to be read for the third time.