In 1991, the Legislature enacted a severance tax break which exempted uranium production from all severance taxes as long as the price (figured by averaging three international indexes) remains below $17 a pound.

This tax break was modified in 1995 (HB 118B) to a "sliding scale" exemption. Taxation begins when the spot market price of a pound of uranium stays at $14 for at least six consecutive months.

At that point, a 4% tax is phased in at a rate of 1% for every $2 increment in price - e.g., from $14.00 to $15.99, a 1% tax is imposed; from $16.00 to $17.99, a 2% tax - until at $20.00 or more, the full 4% is applied.

HB 46 extended the sliding scale exemption until March 31, 2003.

The Department of Revenue reported that in 1996, the State of Wyoming lost approximately $500,000 in severance tax on uranium and projected to lose approximately the same amount in 1997.

Proponents stated that continuing the break is necessary to maintain Wyoming's two uranium producers in operation and encourage the opening of new mines. The graduated tax structure, they said, reaps the benefits of an expanding industry while helping it remain competitive at marginal levels.

Opponents noted that production decisions in the uranium industry, like the petroleum industry, are guided by international market forces rather than Wyoming taxes, and pointed to the complete lack of data substantiating the industry’s claims.

A House amendment to shorten the tax break extension from 2003 to 2001 failed on a voice vote.

HB 46 passed the House 42-14 (3 excused, 1 absent) and the Senate, 27-3.