HB 375 SubBill Amendments

Supported by CCAO, OML and OTA

Not in bill as introduced:

  • Protection of lost LGF revenues due to income tax credits & CAT tax exemptions
  • ANY allocation of severance tax to impacted political subdivisions

Appreciate:

  • LGF hold harmless provision
  • Allocation of 10% of the severance tax to local governments

GOOD START:

But not nearly enough to support the economic development envisioned by the legislature for the shale play counties. Representative Brian Hill in his “Concept Plan” presented to Representative Huffman identified over $ 5 BILLION of current infrastructure needs

DISTRIBUTION PLAN to local governments in Sub Bill - for reference:

  • Ten percent of the total severance tax revenue will be distributed to local governments in the following manner:
  • Hold the Local Government and the Public Library Funds harmless.
  • Of the remainder:
  • Fifty percent will be proportionally allocated to counties where active oil and gas development is occurring. The county budget commissions will decide how to appropriate the money to mitigate or minimize the short-term impacts of development. All projects are required to have a direct link to capital needs directly attributable to oil and gas development.
  • Fifty percent will be allocated to the 9 member Ohio Shale Gas Regional Commission, created by this bill. Half of this will go to a trust fund that cannot be expended until 2025, with the other half leveraging other funds to maximize investment in infrastructure programs.

Based upon DISTRIBUTION PLAN in Sub Bill-seek following amendments:

- LGF hold harmless to come off the top ahead of $21 million to DNR

- Increase percent of allocation to local governments from 10% to 25%

- Within the allocation to local governments:

  • Impacted counties limited to those within either the Marcella or Utica Shale Plays (we understand that the language currently in the bill allows ANY county where a well – vertical or horizontal – to qualify to receive money)
  • 20% to counties
  • Money coming to county is placed in special fund in county treasury (in bill now) and distributed to the political subdivisions based upon the county’s undivided local government fund distribution formula – this removes any need for a distribution authority (and removes the role of the county budget commission from the sub bill) or new process
  • Remove the direct tie to capital needs as impractical under the new distribution formula
  • 5% to a County Township Road Maintenance Fund
  • Special fund is created in the county treasurer
  • Each board of township trustees in the county will appoint a member to a committee to distribute the money
  • Committee will be required to consider well locations and drilling activity, road miles in the townships, and funds received from the “county distribution”in distributing the money from the Fund
  • Funds to be used for road maintenance and construction and the purchase of township road maintenance equipment
  • 75% to Ohio Shale Gas Infrastructure Development fund
  • Ohio Shale Gas Regional Committee (OSGRC) awards funds
  • Commission composition – 11 members - all appointments by governor:
  • 3 commissioners, 3 municipal elected officials and 3 township elected officials – from recommendations received from the 3 associations
  • An economic development professional
  • An oil and gas industry representative
  • Committee considers the following factors in reviewing “infrastructure projects:”
  • Infrastructure needs of the shale region
  • Importance of the project to the health and safety of the citizens
  • Availability of other local, state, or federal funding
  • Adequacy of the planning for the project and the readiness to proceed with the project
  • Extent the capital improvement would support shale activity
  • Extent shale activity has had an impact on the intended improvement
  • Any other factor relevant to a particular project
  • Ohio Public Works Commission manages the grant application and evaluation process and administers the distributions from the Ohio Shale Gas Infrastructure Development fund with OPWC expenses recovered from fund based upon the current cost allocation formula it utilizes for the OPW and Clean Ohio programs
  • “Infrastructure projects” include those projects that provide for
  • roads and bridges and appurtenances to roads and bridges
  • waste water treatment systems
  • water supply systems
  • solid waste disposal facilities
  • storm water and sanitary collection, storage, and treatment facilities
  • transportation infrastructure including airport, port, and rail improvements
  • Costs eligible for funding include planning; engineering; site acquisition and preparation; equipping; and construction, reconstruction, expansion, or improvement of an infrastructure project
  • Reduce percentage going to “legacy fund” expended after 2025 to 15% of allocation to OSGRC (or 11.25% of total funds allocated to local governments)