Oil and gas mining taxes may go to infrastructure

The House Revenue and Taxation Committee unanimously passed a bill last week that would create a trust fund from taxes levied on oil and gas mining in Utah.

A substituted HB58, sponsored by Rep. John Dougall, R-American Fork, is designed to pump money back into Utah to fund various projects from interest earned on a dedicated account in the state's general fund.

Dougall's plan would appropriate $20 million this year to jump-start what would be known as the Infrastructure and Economic Diversification Investment Account.

Each year, 10 percent of the revenue generated from severance taxes, those imposed on oil and gas mining, would also flow into that account. Currently, that's about $9.9 million a year.

Then, 25 percent of the interest earned on that account, between 8 percent and 12 percent, could fund projects in areas where resources are being depleted and elsewhere in the state.

The bill was widely supported by the committee, though some legislators wondered if the bill isn't ambitious enough.

Rep. Roz McGee, D-Salt Lake, said Utah's neighbors have managed to put away hundreds of millions, and in the case of Wyoming and New Mexico, billions of dollars.

She called the first $20 million appropriation a paltry amount.

"I would challenge us all to be better investors in the future on behalf of our children," she said.

Dougall agreed that the number is a slow start to investing, but he said final numbers can be worked out in the last week of the legislative session, when big-ticket bills are debated.

Eventually, Dougall said, he would like 100 percent of severance tax revenues flow into that account.

---

E-mail: jdougherty@desnews.com