Counties lobby to pass severance tax bill in '06

VERNAL — Utah's governor has told Duchesne and Uintah county commissioners he supports their bid for legislation that would return millions of dollars in severance taxes to the Uinta Basin and other oil and gas producing counties.

In less than a year, commissioners should know for certain if Gov. Jon Huntsman Jr. means what he says.

On the heels of last month's failed bid to move a severance tax bill through the Utah Senate, county commissioners from the Basin aren't wasting time in moving forward with plans to put another measure in front of lawmakers in 2006.

"We are going again. We have begun the process now. We have built a coalition of counties, industry and legislators to run the bill again in the next (2006) session," said Duchesne County Commission chairman Larry Ross. "We believe the bill will be identified as very helpful to rural counties and citizens."

"We met with Gov. Huntsman and he indicated he was very supportive of what we are trying to do," said Uintah County Commissioner Mike McKee. "He said it went right along with his plans for rural Utah."

SB63, sponsored by Sen. Beverly Evans, R-Altamont, was "very straight forward," according to McKee. The 2005 legislation sought the return of 25 percent of severance tax revenue collected by the state to counties where the oil or gas was produced. The remainder of the revenue would continue to go into the state's general fund.

With the price of crude rising to all-time highs and the production of natural gas booming, an agreement to return 25 percent of severance taxes to the area of impact would mean millions annually to Uintah and Duchesne counties.

"Last year there was $42 million of severance tax that went into the state general budget. The figures we have show that $19 million plus came out of Uintah County and $8 million came out of Duchesne County," said McKee. "Do the math on it and 25 percent is a substantial boost, and that would go to our local infrastructure."

The catch, of course, is that it's also a great deal of money that would no longer be headed into state coffers.

Language in any measure seeking the return of the severance tax would mandate that a large portion of the revenue would go to aid the oil and gas industry, in part through upgrading roads that crisscross the oil patch.

"We think this is a very good bill, particularly with the area of impact on the infrastructure with all that is going on out here, it lets us meet some needs," Ross said. "The state needs to see that we need some help out here."

"We had some strong support from many of our industry leaders in the Basin," said McKee, adding that IPAMS (Independent Petroleum Association of Mountain States) has climbed aboard the bandwagon. "These people all came forth and said, 'We support you in what you are trying to do to bring this money back to the Basin.' We have had numerous industry leaders tell us they are 100 percent behind this thing."

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