Support SB374, which would provide infrastructure support for Montana communities impacted by oil and gas drilling

Montana’s oil and gas tax holiday, instituted by the legislature in the 1999, provides a huge and unnecessary tax break to oil and gas companies. They pay a tax of only 0.5 percent of the production value for the first 12 months of production on all wells and 18 months on oil and gas from horizontally drilled wells. After the grace period ends, the rate goes up to 9 percent.

We have often looked at the damaging impact of the oil and gas tax holiday on infrastructure, with a particular focus on Sidney, a bedroom community for the Bakken, which is struggling with a need to improve roads, water treatment facilites, schools, and jails while oil companies profit.

Central Avenue in Sidney is inundated with truck traffic.
Central Avenue in Sidney is inundated with truck traffic.

For legislators looking to even out the boom and bust impact of the oil and gas industry, it makes some sense to argue that a holiday is justified when oil prices bust, as they have recently. But when oil is booming along at $100 a barrel, it’s ridiculous to deny the state revenues necessary for infrastructure rebuilding while the oil companies are making huge profits.

SB 374, introduced into the Senate Taxation Committee in this session, by Senator  Christine Kauffman of Helena, would impose a “trigger” on the current tax holiday that would require oil and gas companies to pay the full 9% tax when the price of gas rises above $52.59 a barrel. This is a fair trigger — it protects company profits when prices are low, and requires them to pay when prices and profits are high.

The bill would also increase funding for cities and towns impacted by oil development by requiring that half resulting revenue would go to oil and gas producing counties, with the other half of revenue going to the state general fund.

The bill could be heard in Committee as early as Wednesday, so your action is needed to help get this bill out of Committee on onto the Senate floor.

UPDATE 3/17/2015. Op-ed by Senator Kauffman on SB374.

Courtesy of Northern Plains Resource Council, here’s what you can do to help:

Leave a phone message for the committee members. 
Call the Capitol at (406) 444-4800 during business hours: 7:30 a.m. to 5 p.m. Leave a message for the members of the Senate Taxation Committee asking them to vote YES on SB 374.

Taxation Members, 2015

Democratic members (5) Republican members (7)
Dick Barrett, Minority Vice Chair Bruce Tutvedt, Chair
Jill Cohenour Fred Thomas, Vice Chair
Christine Kaufmann Mark Blasdel
Sue Malek Taylor Brown
JP Pomnichowski Brian Hoven
Janna Taylor
Duane Ankney

You also can email the Committee. Use this online form. About halfway down it will ask you to choose which committee.

Don’t wait — this bill will protect Montana communities. Yours could be next.

About davidjkatz

The Moses family has lived on the Stillwater River since 1974, when George and Lucile Moses retired and moved to the Beehive from the Twin Cities. They’re gone now, but their four daughters (pictured at left, on the Beehive) and their families continue to spend time there, and have grown to love the area. This blog started as an email chain to keep the family informed about the threat of increased fracking activity in the area, but the desire to inform and get involved led to the creation of this blog.
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2 Responses to Support SB374, which would provide infrastructure support for Montana communities impacted by oil and gas drilling

  1. Pingback: From Washington to Helena, we subsidize the most profitable oil companies with billions of dollars of unnecessary tax breaks and direct subsidies | Preserve the Beartooth Front

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