American Oil and Gas Reporter - July 2019 - 39

opment while flooding the Oklahoma
court system with a series of unnecessary litigation. The operator of a well is
the only party legally able to ensure its
wellbore is secure, Lee notes, but HB
1379 would have placed all responsibility on the active producer and none on
the well operator.
· HB 1404 would have allowed for a
county-by-county aggregate tax.

· HB 1992 and SB 471 sought to
allow municipalities to create public
safety districts and raise ad valorem taxes
to fund them.
· HB 2100 would have been duplicative with Oklahoma Corporation Commission rules, but also would have
amended incident reporting related to
regulated gas pipelines to include incidents with estimated property damage of

$5,000 or more.
· SB 517 sought to require written
consent and compensation in the use of
temporary pipelines.
· SB 826 would have created a onetime tax credit for investments in qualified 100% electric and plug-in hybrid
vehicles.
❒
(See Related Story, Page 106)

Anti-Industry Proposals Fail In Illinois
MT. VERNON, IL.- Despite an aggressive push by anti-development groups,
the Illinois Legislature closed its 2019
session on June 2 with a minimal impact
on the state's oil and gas industry, assesses
Dan Reitz, lobbyist for the Illinois Oil &
Gas Association.
"Not many anti-industry bills passed
the legislature this year, so we are happy
for that," says Reitz. "We were able to
keep most of those bills from advancing.
A lot of the bills those groups introduced
this year had been introduced in previous
sessions, so I will expect they will be
back in 2020. They probably will be a
little more aggressive next year."
Before leaving the statehouse on June
2, lawmakers approved a bipartisan
$77.0 billion budget that will start to
close a $3.2 billion gap in state finances,
Reitz says. He reports legislators are
relying on legalized marijuana sales and
sports betting, as well as a new assessment on Medicaid providers, for additional revenues.
The Illinois Legislature also passed a
six-year, $41.5 billion state construction
program for the state's transportation infrastructure, schools and other public
works, he says, with road and bridge
projects slated to receive $33.2 billion.
The state will be assessing several new
taxes as well as increased levies on gasoline, vehicle registration fees, electric vehicles and cigarettes, Reitz points out.
Changes to the state's manufacturer
purchase credit will benefit oil and gas
producers, Reitz says. Before the revisions,
manufacturers had to pay state sales taxes
on consumable goods used in their facilities; the new law exempts them from
paying local sales taxes as well on items
such as fuels, coolants, oil, adhesives,
and fire and safety equipment.
During the session, proposed legislation
that would have hurt oil or gas operations
in the state either failed to advance in
committee or was voted down, Reitz
says. Defeated bills included measures
to require all landowners and mineral

rights owners provide written consent
before a permit was issued, and another
that would require county boards to approve all new well sitings. Legislators
also rejected bills that would have:
· Completely banned high-volume
hydraulic fracturing;
· Repealed both the High-Volume
Fracturing Act and the Oil Resource Management Fund; and
· Prohibited horizontal wells or wells
using directional drilling from being classified as confidential.
IOGA supported one measure, HB
1633, which would have created the Critical Infrastructure Law to help control
protests at pipeline and other infrastructure
projects, Reitz notes, adding IOGA and
other supporters will work to pass this
initiative next session.
Coming In 2020
Next year, Illinois residents will be
voting on a constitutional amendment to
change the state's tax system from a flattax basis to a progressive tax that increases
tax rates as a taxpayer's income increases,
Reitz says. Governor J.B. Pritzker sought
the amendment, predicting the fiscal impacts would only hit the 3% of Illinois
taxpayers making more than $250,000 a
year. The governor has pledged that everyone else will stay at the same rate or see
a decrease.
Reitz says state financial officials predict the new tax rates will generate $3.5
billion in additional revenues. He adds
in addition to the graduated tax rates for
individuals, the measure increases the
corporate tax rate from 7.0% to 7.99%.
Following legislative approval of Pritzker's proposal, the amendment will be on
the ballot in the 2020 general election,
where it must be approved by 60% of
voters to pass.
Before the state's voters have the
chance to revise their tax system in November 2020, Illinois legislators are likely
to see many of the anti-oil-and-gas proposals that failed to advance out of this

year's session, predicts Sam Barbee,
IOGA's executive vice president.
"They definitely will be back next
year and the year after that, and probably
much more aggressive than they were
this year," he says. "Every year, it becomes
ever more apparent that the established
anti-fossil fuel groups are simply philosophically opposed to developing oil and
natural gas, because more and more reputable, scientific studies are factually disproving the hazardous air pollutant health
accusations these groups insinuate."
Luckily for the oil and gas sector,
Barbee says the associated is blessed
with exceptional representation quarterbacked by Reitz and state legislators willing to listen to industry arguments against
those proposals. There continue to be
new legislators voted into office, and
many, especially on the Democratic side,
are from northern Illinois, far from the
oil- and coal-producing counties along
the state's southern border. IOGA continues its mission of educating those lawmakers on the importance of oil production
to the southern Illinois economy, he notes.
"People do not realize that 90% of
the oil and natural gas production in the
United States comes from independent
producers," Barbee notes. "In Illinois,
100% of the production comes from independents, and they produce nearly 9
million barrels of oil annually, and the
nearly 14,000 industry workers generate
almost $700 million in taxes."
Assessing the 2019 legislative session,
Barbee says, "There really was no damage
to the oil and gas industry during the session, and in today's legislative environment,
we have to consider that a big win." ❒

Coming In August
Optimizing wellbore spacing and
mitigating parent/child well interactions in horizontal resource plays.
JULY 2019 39

American Oil and Gas Reporter - July 2019

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