GILLETTE (WNE) — Two years after the Wyoming Legislature knocked 0.5% off of the severance tax on coal, lawmakers are trying to lower it again.

House Bill 75 proposes lowering the severance tax rate on surface coal production to 6%. It currently is 6.5%, thanks to a bill that passed in 2022 that lowered it from 7%.

If the bill passes, it would bring coal production’s severance tax in line with oil and gas, which has a severance tax of 6%. In 2022, then-rep. Tim Hallinan, R-Campbell County, said that the 1% gap cost the coal industry an extra $250 million over the past 10 years.

“For me it’s just an equity issue,” said Sen. Eric Barlow, one of the cosponsors of the bill, along with local representatives Ken Clouston, Abby Angelos, John Bear and Chris Knapp and Sen. Ogden Driskill, R-Devils Tower. “If we care about our industries, fossil fuels, oil, coal, gas, they ought to be treated, for tax purposes, equitably.”

If the bill passes, it would take effect July 1, 2025, and it would affect severance tax distributions beginning in fiscal year 2026-2027.

It’s estimated that this would be a hit of $3.2 million to the state’s general fund in fiscal year 2026, $2.9 million in FY27 and $2.6 million in FY28, as well as a decrease to the state’s budget reserve account of $6.4 million in FY26, $5.8 million in FY27 and $5.2 million in FY28.

The estimates are based on the severance taxes on surface coal projected in the October 2024 Consensus Revenue Estimating Group forecast.