The Ohio Oil and Gas Association commends members from the Ohio House of Representatives and the Ohio Senate for passing House Bill 225 and House Bill 430, moving the bills on to await final approval from the Governor.
“On behalf of the members of the OOGA, we thank the leadership of the Ohio House and Senate for bringing these vital bills to the floor for consideration and the bipartisan support from members in both chambers in passing these important pieces of legislation,” said Matt Hammond, executive vice president of the Ohio Oil and Gas Association. “The vision and fortitude of Representative Tim Schaffer and his sponsorship of House Bill 430, and Representative Andy Thompson for being a tireless advocate of House Bill 225, both of which are greatly valued by the membership of the Ohio Oil and Gas Association.”
House Bill 225 requires the Ohio Department of Natural Resources to spend 30% of the Oil and Gas Well Fund on plugging orphan wells and requires annual reporting from the ODNR to the Ohio General Assembly. With support from environmental organizations, those in the oil and gas industry have long advocated for a more robust oil and gas plugging program even as Ohio operates one of the best in the nation. This legislation will clean up legacy issues dating back to the early 1900s and ensures that revenue coming from the severance tax and fees are used to support the oil and gas regulatory program. H.B. 225 passed both the House and Senate Floors unanimously.
House Bill 430 reaffirms the traditional sales tax standing that oil and gas operators have received since 1960. Every business needs clear and consistent system of taxation, this legislation will provide Ohio’s oil and gas industry tax certainty. This bill simply reaffirms what has been conducted for decades and does not expand the scope of exemptions, but rather clarifies it. H.B. 430 passed the House by a vote of 85-12 and the Senate 32-1. It is also important to note that the Ohio Department of Taxation initially testified in opposition to H.B. 430., later withdrawing its opposition the day the Senate passed the bill out of the Senate Ways and Means Committee.
The past few months have been full of twists and turns, uncertainty and political obstacles. Pending approval from Governor Kasich, signing these pieces of legislation into law will benefit Ohio’s oil and gas industry by bolstering the state’s orphan well plugging program and clarifying oil and gas sales tax treatment.