SALEM, Ohio — Two Ohio lawmakers have introduced a bipartisan bill intended to keep more shale money in the communities where it originates.
Reps. Brian Hill, R-Zanesville, and Jack Cera, D-Bellaire, co-sponsored H.B. 105, which is being heard in the Ohio House Ways and Means Committee.
The bill would limit the amount of tax revenue credited to the Oil and Gas Well Fund, used by the state for oil and gas regulatory and well plugging activities, to no more than $18 million.
Revenue in excess of that amount would go toward: capital improvements in the shale region; township road repair and construction; firefighting and EMT equipment; capital improvements in counties and municipalities where injection wells are located; and local grants to help local government and school districts to convert vehicles to natural gas.
The bill was introduced March 2, and sponsors presented proponent testimony March 22.
Rep. Hill, during House testimony, said the bill includes a “responsible and responsive distribution of the severance tax that encourages development and returns a larger share of revenue to the shale area.”
The bill does not seek to raise the severance tax on the drilling industry. Instead, it would likely redistribute some of the funds currently going to the state.
According to a fiscal analysis of the bill, provided by Ohio Legislative Service Commission, nearly $41 million was credited to the Oil and Gas Well Fund in 2016. About $14.4 million was appropriated for oil and gas regulation and administration, and well plugging activities.
Under the bill, about 70 percent of excess Oil and Gas Well Fund revenue would be distributed to, or otherwise benefit, local governments located in the shale region.
The bill defines “shale region” as being located in a county where one or more wells are producing oil or gas in the Utica or Marcellus formations.
“The shale area of our state has been ignored long enough,” said Cera, in a released statement. “It’s time for Columbus to wake up and do the right thing by investing in the eastern Ohio communities most impacted by oil and natural gas activity.”
Cera said the bill helps create a positive environment for the industry to grow, while at the same time assists local governments and communities with repairs to roadways and bridges.
He said that eastern Ohio is in “dire need” of infrastructure repairs, and that the bill would help those communities make infrastructure improvements without imposing new taxes on oil and gas.
The bill would also create a new well plugging program within the Ohio Department of Natural Resources, to catalog and prioritize the plugging of idle and orphaned wells. It would also require the DNR to investigate and determine whether oil and gas wells are idle or orphaned, if production reports are not filed.
Steve Irwin, spokesperson for ODNR, said the state agency is reviewing the bill “and will monitor it as it moves through the General Assembly.”
Other sponsors include Reps. John Rogers, D-Mentor on The Lake; Michael O’Brien, D-Warren; Nickie Antonio, D-Lakewood; Teresa Fedor, D-Toledo; Andrew Brenner, R-Powell; Kent Smith, D-Euclid; Michael Sheehy, D-Toledo; Michele Lepore-Hagan, D-Youngstown; Hearcel Craig, D-Columbus; and Adam Miller, D-Columbus.