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Senate advances bill to phase severance-tax revenue into a permanent trust fund
Summary
Senate Bill 38 would establish staged ‘cut points’ to move increasing portions of severance-tax revenue into a constitutional trust fund over several years; sponsors say the change protects future revenues, sponsors and opponents debated fiscal impact and education neutrality.
Senate Bill 38, presented Jan. 29 by Senator Valentine, would modify how severance-tax revenue is directed to a constitutional trust fund by establishing graduated thresholds that shift increasing amounts into a permanent fund over time.
Valentine said the state adopted the constitutional trust principle to preserve revenue from depleting resources such as oil, gas and hard minerals. The bill sets phased cut points so that, by the target date specified in the amendment, larger amounts of severance tax receipts would go to the trust fund instead of the general fund. A fiscal note attached to the bill showed a projected transfer of about $14,500,000 in 2010 under current estimates; the sponsor acknowledged that meeting some caps would be difficult in the current fiscal year and said an amended fiscal note would be prepared to reflect changes adopted in committee.
Senator questions focused on whether the bill reduces or increases amounts available for education and whether the severance-tax tiering for hard minerals should be revisited. Senator Valentine said the measure “increases the amount over each year that goes to the permanent trust fund” and described the change as neutral to the education fund, noting severance revenue is deposited to the general fund rather than directly to education accounts. Senator Bedders asked about price-tiering for hard minerals such as copper; Valentine said that matter was outside the current bill’s scope.
After amendment and floor discussion, the Senate passed the motion to move SB 38 to the third reading calendar for additional action; the official tally and placement were recorded on the floor journal.
