Today, the Governor unveiled his plan for taxing and regulating the oil and gas industry. The changes were introduced as part of his “mid-biennial budget review” bill, now known as HB 472. The cornerstone of these changes is an increase in the severance tax from 2% of a producers’ gross receipts to 2.75%. 20% of the new revenue generated by the tax would be earmarked for local governments in the shale play area. Other miscellaneous changes were included in the proposal.
While the bill has been referred to the House Ways and Means Committee, there is wide speculation that elements of this proposal could be incorporated in HB 375, the bill that currently deals with the severance tax issue. However, the situation remains fluid and the timing of any changes uncertain as we rush into the primary election season.