Cera Plan Would Assist Communities Impacted By Oil And Gas Drilling
Lawmaker says portion of severance tax should go to community infrastructure, emergency services
May 09, 2016
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State Rep. Jack Cera (D-Bellaire) last week introduced House Bill (HB) 540, legislation to assist local communities impacted by oil and gas drilling. The Bellaire lawmaker’s proposal would direct a portion of state severance tax revenue to affected communities in order to help them rebuild crumbling roadways and provide fire and emergency services. 

“Eastern Ohio’s roads and bridges are deteriorating under the weight of the increased truck traffic brought by the oil and gas industry. It is only fair that a portion of the severance tax is used to restore our communities’ infrastructure,” said Cera. “This proposal takes surplus dollars over and beyond what is needed by ODNR and sends them back to eastern Ohio.” 

In fiscal year (FY) 2015, Ohio collected $24 million in severance tax revenue but appropriated only $14 million to the Ohio Department of Natural Resource’s (ODNR) Division of Oil and Gas. The severance tax is on pace to generate more than $30 million in the current fiscal year, while the Division’s appropriation remains the same. 

Under HB 540, the Division of Oil and Gas would keep the first $20 million in severance tax revenue each year for its regulatory program and to plug idled and orphaned wells, but any additional revenue would be distributed to Ohio communities bearing the brunt of oil and gas drilling activity.  

House Bill 540 would redirect excess severance tax revenue as follows: 

-70 percent to the Shale Region General Local Government Fund to help local governments repair impacted roads and provide essential safety services. 

-10 percent to the Shale Region Township Road Maintenance Fund to help townships repair dilapidated roads.

-10 percent to the Shale Region Firefighting /EMS Equipment Fund to allow the state fire marshal to provide grants to fire departments in shale counties for the purchase of firefighting and EMT vehicles and equipment. 

-10 percent to communities with injection wells for oil and gas waste. 

In addition, Cera’s proposal would establish a well-plugging program under ODNR’s Oil and Gas Resources Management Guidance to require an inventory of all known and suspected idle and orphaned wells. An annual report would be required to be submitted to the Ohio General Assembly.

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