SF0149 Oil and gas-royalty and tax rates. | Wyoming Bill

Oil and gas-royalty and tax rates.

AN ACT relating to oil and gas; establishing an exemption for the reduction of certain oil and gas severance taxes based on royalty rates; specifying procedures for the tax exemption; requiring rulemaking; and providing for effective dates.

Energy Land Taxes

Plain English Breakdown

The bill did not pass, but details about its potential effects remain speculative due to lack of specific data on federal royalty rates and company impacts.

Oil and Gas Tax Exemption Act

This bill proposes to reduce certain oil and gas severance taxes in Wyoming if the federal government raises its royalty rate for crude oil or natural gas.

What This Bill Does

Reduces the state's severance tax on crude oil, lease condensate, and natural gas if the federal energy royalty rate increases.

Specifies that the governor must certify an increase in the federal royalty rate before the state can reduce its taxes.

Sets out how much the state’s tax will be reduced based on the amount of the federal royalty rate increase.

Requires the Wyoming oil and gas conservation commission and the department of revenue to create rules for implementing these changes.

Who It Names or Affects

Oil and gas companies that produce crude oil, lease condensate, or natural gas in Wyoming.

The state government of Wyoming, specifically the governor's office and tax departments.

Terms To Know

Severance Tax

A tax on the removal or extraction of minerals from a property.

Royalty Rate

The percentage of revenue that must be paid to the owner of mineral rights for extracting and selling their resources.

Limits and Unknowns

This bill did not pass in its current session.

It is unclear how many oil and gas companies would benefit from this tax reduction.

The exact impact on state revenue cannot be determined without knowing the federal royalty rate changes.

Bill History

2021-03-22 Senate

S COW:Failed 13-17-0-0-0

2021-03-09 Senate

S Placed on General File

2021-03-09 Senate

S09 - Minerals:Recommend Do Pass 5-0-0-0-0

2021-03-04 Senate

S Introduced and Referred to S09 - Minerals

2021-03-04 Senate

S Received for Introduction

2021-03-01 LSO

Bill Number Assigned

Current Bill Text

Read the full stored bill text

21LSO-0602
2021
STATE OF WYOMING
21LSO-0602
Introduced
2.0

SENATE FILE NO. SF0149

Oil and gas-royalty and tax rates.

Sponsored by: Senator(s) Boner, Biteman, Cooper, Landen and Perkins and Representative(s) Harshman

A BILL

for

AN ACT relating to oil and gas; establishing an exemption for the reduction of certain oil and gas severance taxes based on royalty rates; specifying procedures for the tax exemption; requiring rulemaking; and providing for effective dates.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 39
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14
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205 by creating a new subsection (p) is amended to read:

39
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14
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205.

Exemptions.

(p)

The severance taxes imposed under W.S. 39
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14
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204(a)(ii), (iii) and (iv) on crude oil, lease condensate or natural gas that is owned or leased by the United States or any federal agency and that is removed, extracted, severed or produced by any taxpayer shall be reduced upon an increase in the federal energy royalty rates charged or imposed on crude oil or natural gas that is extracted, developed or produced in Wyoming. The tax exemption available under this subsection shall only become effective upon certification of the governor to the department that the federal energy royalty rate has been increased pursuant to federal law. The reduction in severance taxes under this subsection shall be as follows:

(i)

The tax imposed under W.S. 39
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14
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204(a)(ii) shall be reduced to zero percent (0%) if the federal energy royalty rate for crude oil and natural gas is increased by an additional one percent (1%);

(ii)

If the tax imposed under W.S. 39
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14
‑
204(a)(ii) is reduced to zero percent (0%), then the tax imposed under W.S. 39
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14
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204(a)(iii) shall be reduced
by one
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half percent (0.5%) for each additional one percent (1%) increase in the federal energy royalty rate for crude oil and natural gas;

(iii)

If the taxes imposed under W.S. 39
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14
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204(a)(ii) and (iii) are both reduced to zero percent (0%), then the tax imposed under W.S. 39
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14
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204(a)(iv) shall be reduced by one
‑
half percent (0.5%) for each additional one percent (1%) increase in the federal energy royalty rate for crude oil and natural gas, subject to any exemption available under subsection (n) of this section.

Section 2.

The Wyoming oil and gas conservation commission and the department of revenue shall promulgate all rules necessary to implement the provisions of this act.

Section 3.

(a)

Except as provided in subsection (b) of this section, this act is effective
immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(b) Section 1 of this act is effective July 1, 2021.

(END)

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SF0149