Governor's news conference on severance tax agreement

Click here for more video of the news conference

Here's some unedited video of this morning's news conference. The details of the agreement struck between the governor and representatives of the natural gas industry include a modification of the severance tax as it pertains to natural gas to tax 5% of the market value at the wellhead. The is the same way the statute reads for the Arkansas severance tax as it pertains to oil.

There are some additional terms, including a phasing in of the tax for high-cost wells, wells that do not meet the minimum production threshold, and for other wells. The governor wants to distribute 95% of the revenue to roads (utilizing the 75-15-15% formula). The other 5% would go to general revenue to supplant past revenue brought in from the current severance tax. If the Legislature passed the agreement as is, it would take effect on January 1, 2009 and would bring in about $57 million in revenue in the first year, increasing to the point to where it would reach $100 million annually by 2013. Here's the governor's news release.

The governor will begin roll calls this week and said that a time frame for a special session would be late March if he has the votes. Otherwise, he's willing to go the initiated act route. He described the call for a special session to be "very limited." He did hint that with a consensus, we could take up and fix the minimum age to marry statute.