Lawmakers Pass Tax Break for Coal Mines

Source: Associated Press (5/2/11)

"Senate Bill 266 reduces the coal gross-proceeds tax rate from 5%–2.5%."

Associated Press

A measure that gives an estimated $2.8M annual tax break to a Roundup, Montana coal mine passed on the last day of the legislative session, after some heavy lobbying.

Gov. Brian Schweitzer's amendment to Senate Bill 266 reduces the coal gross-proceeds tax rate from 5%–2.5% for the first 10 years of a new or expanding underground coal mine.

Sen. Alan Olson, R-Roundup, said he had some reservations about the changes to his original bill but said it will help Signal Peak expand the mine.

"It'll increase the bottom line enough to attract additional investment dollars," Olson said.

Some Democrats criticized the tax cut as a "bailout" for the coal mine at a time when the state struggled to fund education and programs that benefit the poor, children and elderly.

Olson's original bill sought to change a law that allows counties to give coal mines a 50% tax reduction; his proposal would've let counties consider a reduction of less than 50%.

The Senate initially approved the change, but lobbying efforts led to a tie vote Thursday, temporarily killing the bill.

Olson got the Senate to reconsider the bill and later vote to suspend the rules to allow another final vote Thursday. The Senate agreed to the suspension. Later Thursday, the House approved.

Sen. Christine Kauffman, D-Helena, said Schweitzer's staff put pressure on Democrats to change their votes during a Senate recess, noting the governor sent notes to people in the Democratic caucus and that Dan Villa, Schweitzer's education adviser, actively campaigned for the bill.

"The blame has to be laid right where it belongs and that's the governor," she said. "I think it was underhanded. . .some Democrats will do anything he says and I think it's shameful."

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