The bill establishes a new taxation framework for hydrogen production in Wyoming, specifically targeting the severance tax on hydrogen extracted from water. It defines "hydrogen" and "hydrogen production," and mandates that the Department of Revenue assess the fair market value of hydrogen production annually for taxation purposes. The bill outlines that a severance tax will be levied on the gross product of hydrogen production, with specific tax rates set at three percent for hydrogen produced from by-product water and six percent for all other hydrogen produced from water. Additionally, it incorporates existing provisions related to natural gas taxation, compliance, enforcement, and taxpayer remedies.

The legislation also specifies that the severance tax revenues from hydrogen production will be distributed according to existing laws. The act is set to take effect on July 1, 2025, and will apply to any hydrogen production occurring on or after that date. Overall, this bill aims to create a structured approach to taxing hydrogen production, aligning it with existing tax frameworks while providing clarity on rates and compliance.