The House Natural Resources Committee held debate on U.S. Representative Cynthia Lummis' (R-Wyo) H.R. 1192, Soda Ash Royalty Extension, Job Creation and Export Enhancement Act of 2011. Introduced in March of 2011, Congressman Lummis' legislation extends the 2% royalty rate paid by Wyoming's natural soda ash producers into the fall of 2016.
The federal royalty of 2% was set by Congress in 2006 as a response to the growing synthetic soda ash industry in China, and the Chinese Value Added Tax rebate for soda ash that artificially depresses the price of the Chinese product. That legislation expired in October 2011, and the Department of Interior chose to substantially increase the costs to operate in Wyoming. The increased royalty rate will add approximately $25 million dollars in new costs annually, while at the same time the Chinese government's subsidies amount to approximately $30 million dollars annually.
"During the five years of the 2% royalty rate, U.S. manufacturers increased employment, increased production and exports, and increased the royalties paid to the federal and state coffers as compared to the previous five years when the royalty was higher," Rep. Lummis said. "So by any measure this was a success."
"As the Representative of the state with significant resource extraction from federal lands, I do not believe that any industry should be able to extract resources on our public lands without paying the American people for the privilege," Rep. Lummis said. "These resources belong to the American people. But the U.S. government has to be smart when developing and setting these rates because as we know it is a global market place."
The soda ash industry employees 3,000 people in southwest Wyoming and are responsible for hundreds of longshoreman jobs at the Port of Portland, Oregon and Port Arthur, Texas where Wyoming's soda ash is shipped around the world.
Accounting for nearly one billion dollars to the balance of trade for the U.S., the extension of this royalty rate is important to maintaining the American soda ash industry's competitive edge in the global market. This naturally made mineral, derived from the hard rock called Trona, can be found in everyday items such as household cleaners and glassware to car windshields and laundry detergent.
At the forefront of the industry is Sweetwater County, Wyoming, accounting for 90% of the soda ash produced in the United States. This industry has a sizeable impact on employment and our state's economy, and is crucial to Sweetwater County.
Despite Wyoming's superior natural product, unfair trade practices, like Chinese subsidies, have eroded the American product's global market share. It is for these reasons the legislation is supported by the United Steelworkers Union in Wyoming, and the Longshoremen at the Port of Portland.
Watch Congressman Lummis' testimony here: http://youtu.be/zCAx54GstlA
For more information on H.R.1192 please visit: http://thomas.loc.gov/cgi-bin/bdquery/z?d112:h.r.01192: