Governor Mike Beebe says that a special legislative session to consider altering the state’s severance tax is still a possibility.  Characterizing recent talks with natural gas company executives as having “moved a whole lot,” Beebe contends that a call for a session before the end of March could happen.

Lawmakers suggested yesterday that time is running out.  Senate President Jack Critcher and House Speaker Benny Petrus see chances as slim for a special session. 

According to this report from Rob Moritz with our content partner, the Arkansas News Bureau, Beebe also said he would be willing to provide exemptions to natural gas companies drilling in north-central Arkansas' Fayetteville Shale play, similar to exemptions in surrounding states for a type of drilling known as “horizontal drilling.”

Two observations:  First, beyond the severance tax, expect to see more dialogue that may include these other tax considerations, such as tax credits, exemptions and corporate tax relief.  There has been an effort for some time to include other state’s tax structures in this severance tax debate.

Secondly, there is nothing to prohibit a special session being called after the May primary elections or subsequent run-offs.  This notion that one must be called by the end of March or all bets are off doesn’t ring true.

We’ve reported on important background in this debate about the evolution of the severance tax and more details of how other states apply the severance tax and subsequent tax breaks.  Here’s a link if you want a refresher.