American Oil and Gas Reporter - July 2015 - 37

the effective tax rate on oil production
and a 500 percent jump in the effective
tax on natural gas output.
* A severance tax will not provide a
sizeable or dependable revenue source
for Ohio's general fund because those
taxes rise and fall with changes in output
and price.

* The proposed severance taxes are
discriminatory since they target one industry instead of imposing a general tax
increase, and constitute a double tax.
Ohio's producers already pay sales taxes,
gross receipts taxes, local property taxes
and permit fees, while working interest
and royalty owners who live in Ohio pay

state income taxes.
Bernard Weinsten, the study's lead
author, predicts that imposing higher tax
burdens on Ohio producers most likely
will lead them to shift production and
future investments to surrounding states.
r

Illinois Legislators Pass Industry Bills
MT. VERNON, IL.-The Illinois General Assembly ended its 99th session on
May 31 after passing bills that will help
the state's oil and gas operators, assesses
Brad Richards, executive vice president
of the Illinois Oil & Gas Association.
IOGA supported several pieces of legislation, which Richards described as designed to improve the permitting and
regulatory environment in the state.
SB 1378, sponsored by Senator Gary
Forby, D-Benton, authorizes the Illinois
Department of Natural Resources to adopt
rules and hold hearings to determine if
oil or gas leases are operative on the
basis that prior leases covering the property
have terminated because of nondevelopment, the bill language states. Both houses
approved the bill on May 31.
Among its provisions, SB 1378 also:
* Lays out the requirements needed
to gain a reasonable presumption of the
termination of previous oil and gas leases;
* Requires that any request for a determination include paying a nonrefundable fee of $1,000 by the applicant; and
* Provides that if the permittee fails to
properly plug all nonplugged and nontransferred wells within 30 days after the determination is issued, the wells will be deemed
abandoned and included in the state's well
site plugging and restoration program.

House by Representative Brandon Phelps,
D-Harrisburg, and by Forby in the Senate.
The bill increases the threshold for the

aggregate of as much as 12 months' accumulation of proceeds from $25 to $100.
The bill has been sent to the governor.

False Information
Forby also sponsored SB 1377, which
imposes a penalty of as much as $5,000
for anyone submitting false information
on any application, permit, required record
or other document submitted to IDNR.
Richards says IOGA supported the bill
as part of an agreement with the department
to pursue rule changes that will eliminate
requirements that oil or gas leases be provided with the application for a permit to
drill. He says IDNR now will rely solely
on the applicant's certification that it has
the right to drill the well.
The Illinois Senate approved the measure June 19 and sent it to Governor Bruce
Rauner for his signature.
Legislators also updated the trigger
for payments remitted to payees annually
in HB 313, which was sponsored in the
JULY 2015 37

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American Oil and Gas Reporter - July 2015

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