OKLAHOMA CITY – New drilling incentives approved today by the Oklahoma Legislature will protect Oklahoma’s economy, according to state Rep. Mike Sanders.
House Bill 2562 was approved by a vote of 61-34 in the state House and 30-14 in the state Senate. It will now proceed to the governor’s desk.
“The oil and gas industry is critical to Western Oklahoma and doing away with the incentives would have crippled our economy,” said Sanders, R-Kingfisher. “This legislation is a compromise proposed by oil and gas industry leaders to ensure essential services will receive more funding, but without hurting our economy. Any action that hurts our competitiveness for oil and gas jobs will ultimately lead to less funding when we lose those revenue sources to North Dakota and other parts of the country.”
HB 2562 establishes a reduced 2 percent gross production tax rate on production from a new well spudded on or after July 1, 2015, for 36 months of production. Thereafter, the standard 7 percent rate takes effect. Half of the gross production taxes collected at the 2 percent rate will be distributed to the General Revenue Fund, a quarter will go to the County Highway Fund and a quarter will go to schools.
The legislation also extends other drilling incentives that were set to expire.
Oklahoma has 192 active rigs that generate $831 million in revenue to the state, counties and education. The industry employs nearly 350,000 Oklahomans. For this reason, Democrats and Republicans have both supported horizontal and vertical drilling incentives for more than a decade, Sanders said.
Do you like this post?