Kasich holds firm on severance tax

October 21, 2014 at 12:00a.m.

COLUMBUS

An update on lawmaker action and other activities at the Ohio Statehouse related to horizontal hydraulic fracturing:

• Severance Tax: Gov. John Kasich remains committed to increasing tax rates on oil and gas produced via horizontal hydraulic fracturing.

During an editorial board meeting, he said he would continue to push lawmakers to pass a tax increase and warned of the potential consequences if the Legislature failed to act.

“John Paul Jones I think once said, ‘I have not yet begun to fight,’” the governor said. “Frankly, if we don’t make the progress we want, I think you should expect a ballot initiative. And that initiative will be a lot higher than what I’m proposing.”

• Industry Group: The Ohio Oil and Gas Association continues to oppose the governor’s severance tax proposal, however, backing alternative legislation passed earlier this year by the Ohio House.

But the group’s president, David Hill, and senior vice president, Shawn Bennett, would like to see the tax issue resolved.

“We’d love to get this issue resolved and go on about the businesses of finding oil and gas ...,” he said. “We want to eliminate uncertainty. In the oil and gas industry, we have so many uncertainties it would frighten you. We’ve got geology, we’ve got availability of machinery, we’ve got all of these issues. And, so, the uncertainty of where that tax rate’s going to be is troublesome. We need to get it behind us. ... We’re supporting a severance tax — a reasonable severance tax. The severance tax was designed to fund the regulatory body. ... It was never contemplated to do any more than that.”

Related legislation could be among the bills lawmakers take up during their final voting sessions of the year.

“It’s lame duck,” Bennett said. “There are no bets when it comes to lame duck legislation. Anything can happen.”

• Algae: The chairman of the Ohio House agriculture committee continued to review amendments to legislation that includes increased fines for dumping oilfield waste but did not call the panel back for hearings during September.

Rep. Dave Hall said he still planned additions to HB 490 to deal with algal blooms, following an incident this summer that left Toledo-area residents without water for a couple of days. He said he thought the bill could be positioned for passage shortly after lawmakers return after the general election.

Among other provisions, HB 490 would expand the Ohio Department of Natural Resources’ authority to revoke or suspend drilling and related activities of those who break the state’s environmental regulations. The legislation also would tighten requirements for transporting brine and increase potential prison time and civil penalties for violations.

The bill was offered, in part, in response to a Youngstown-area dumping incident.