The bill establishes a new taxation framework for hydrogen production in Wyoming, specifically addressing the severance tax applicable to hydrogen extracted from water. It defines key terms such as "hydrogen" and "hydrogen production," and mandates that the Department of Revenue assess the fair market value of hydrogen production annually. The bill outlines that a severance tax will be levied on the gross product from 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 and compliance procedures.

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, the bill aims to create a structured approach to taxing hydrogen production while ensuring that it aligns with current tax regulations for natural gas.