Frac sand mining tax bill gets cold reception in committee

Legislation to impose new taxes on silica sand mining in Minnesota got a rough reception Tuesday in a House committee hearing.

Rep. Rick Hansen, DFL-South St. Paul, is proposing to tax the extraction of frac sand at $1 per ton. An additional tax, based on market value, would be imposed on the washing and processing of the sand. Some of the revenue would pay for the state's environmental oversight of the industry.

Michael Wallenius , vice president of operations for Unimin Corporation, told members of the House Tax Committee that his company mines sand in seven states, and only two impose special taxes. He said the proposal would make it hard to remain competitive in Minnesota.

"Taxes at these levels would cause us to move production and would deter future investment in operations in Minnesota by Unimin and others looking to enter into the frac industry in Minnesota and will drive frac sand development jobs to other states," Wallenius said.

The committee did not vote on the bill. It was laid over for possible inclusion in a larger tax bill.