American Oil and Gas Reporter - April 2018 - 165

ConventionCoverage: Illinois Oil & Gas Association

IOGA Makes Presence Felt
On State, Federal Issues
By Bill Campbell
EVANSVILLE, IN.-Making sure that
conventional well operators aren't asked
to pay a severance tax enacted on highvolume hydraulically-fractured (HVHF)
wells and stopping anti-development legislation are the key goals leaders of the
Illinois Oil & Gas Association laid out at
the association's 2018 annual convention,
Feb. 28-March 1 at the Old National
Events Plaza in Evansville.
At the federal level, meanwhile, IOGA
is offering input to the Trump administration on rewriting the Environmental
Protection Agency's New Source Performance Standards for oil field emissions
of methane and volatile organic compounds under Subpart OOOOa. And closer
to home, association leaders revealed,
IOGA intervened with county assessors
to resolve an issue regarding ad valorem
tax valuations.
Speaking during IOGA's annual mem-

The Illinois Hydraulic Fracturing Tax Act
was drafted on a sales tax model, which
means all operators owe it unless they
can prove they are exempt, Legal and
Legislative Chairman Matthew McArthy
advises Illinois Oil & Gas Association
members during their annual meeting,
Feb. 28-March 1 at the Old National Events
Plaza in Evansville, In.

bership meeting on the convention's opening day, IOGA lobbyist Dan Reitz reported
on a couple direct assaults on oil and gas
development in the form of companion
bills, SB 3005 and HB 5119, introduced
respectively by Senator Kwaue Rauol,
D-Chicago, and Representative Steven
A. Anderson, R-Geneva.
The bills, Reitz explained, potentially
give anyone, anywhere, standing to protest
a permit issued by an Illinois state agency
by changing references to "parties" to
"persons" in the definition of an administrative decision in the Illinois Administrative Review Law of the Code of Civil
Procedure. The legislation also provides
that a person "adversely affected or aggrieved by an administrative decision is
entitled to a judicial review" of that decision, he added.
SB 3005 was amended in committee
to limit it to five state agencies, although
it still includes the Illinois Department
of Natural Resources and Pollution Control
Board, Reitz advised. He described it as
largely political posturing.
"It came out of committee because
Senator Rauol is running for attorney
general and one of his primary opponents
is former Governor Pat Quinn, who has
the environmental groups in his camp,"
he said, adding, "All the business groups
are adamantly opposed to this. I think
we will be able to kill it somewhere in
the process and I know (current) Governor
Bruce Rauner would veto it."
Another attorney general candidate,
Representative Scott Drury, D-Highwood,
has introduced HB 5743, which essentially
would ban all hydraulic fracturing in the
state, Reitz went on. And in a slightly
more subtle approach, he noted, Representative Will Guzzardi, D-Chicago, has
introduced HB 5716, which would require
permit applications for all drilling or fracturing operations include the written consent of every affected mineral-interest
and surface owner.
IOGA Initiatives
On a more positive note, Reitz said,
Representative Natalie Phelps-Finnie, DElizabethtown, is carrying HB 4724,

which would clarify that conventional
well operators are not required to submit
exemption certificates to the first purchaser
under the Illinois Hydraulic Fracturing
Tax Act, which was passed in 2013 in
conjunction with the state's HVHF statute.
During his committee's session the
following day, IOGA Legal & Legislative
Chairman Matthew McArthy explained
that the Hydraulic Fracturing Tax Act
was drafted on a sales tax model, "which
means you owe it unless you prove you
are exempt."
He said first purchasers were responsible for collecting the tax, but rather
than accept a simple exemption certificate,
the Illinois Department of Revenue was
demanding biannual, individual well production records that included such information as well names, IDNR reference
numbers and GPS coordinates.
McArthy said Phelps-Finnie's bill contained language drafted by IOGA that
"basically says, unless you have an HVHF
permit, you don't pay the tax."
The Department of Revenue has accepted IOGA's amendment, and "we
aren't seeing a lot of resistance," McArthy
revealed. "Hopefully, we can push that
through."
But IOGA's other tax initiative-once
again trying to restore a state sales tax exemption for exploration equipment that
was taken away in 2003-likely will depend
on this year's budget negotiations, Reitz
advised. "It still is going to take some type
of tax package or something we can roll
our exemption into," he acknowledged.
Federal Regulations
At the federal level, Charles Venditti,
manager of regulatory compliance for
Countrymark Energy Resources LLC, reported that IOGA was working with other
industry groups to make the EPA's methane
NSPS more palatable for operators. He
recalled that last July, the U.S. Court of
Appeals for the D.C. Circuit overturned
the Trump administration's attempt to
postpone the June 3, 2017, effective date
of the Obama-era regulations (AOGR,
September 2017, pg. 33).
Consequently, he allowed, "We as an
APRIL 2018 165



American Oil and Gas Reporter - April 2018

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