A pair of bills recently passed the Ohio State legislature and have gone to Gov. John Kasich’s desk for his signature. Both bills affect companies in the oil and gas space, in particular those drilling in the Utica Shale. One bill, House Bill (HB) 430, tightens up the tax code, what is and what is not allowed as deductions for drilling companies. Ohio state auditors have taken advantage of unclear language to aggressively go after oil and gas companies over legitimate tax breaks they receive under Ohio law (to not pay taxes on equipment used directly in producing oil and gas). Lawmakers want to end the tax witch hunts by clearing up language. They did so back in 2016, but Kasich and Democrats successfully spun the issue as a “tax break” under which up to $264 million would have to be refunded to Big Oil. Total lie. But Kasich vetoed that bill and it died (see OH Gov Kasich Vetoed Misnamed ‘Tax Relief’ for Utica Drillers). The bill is back, in a different form, and sent to Kasich for a signature. Will he sign it this time? The second bill, House Bill (HB) 225, addresses the issue of plugging some of the estimated 600 orphan wells in the Buckeye State. HB 225 triples the amount of money set aside to cap orphan wells (money which comes from Ohio’s severance tax, paid for by oil and gas producers). The bill also “creates a more streamlined and efficient process for identifying and plugging” orphan wells. The amazing thing about HB 225 is that both Big Green groups and the drilling industry support it! We predict a quick signature on this one…
