Newspaper article THE JOURNAL RECORD

House Oks Energy Industry Incentives

Newspaper article THE JOURNAL RECORD

House Oks Energy Industry Incentives

Article excerpt

A controversial package of tax breaks and other incentives for the state's oil and gas industry on Wednesday passed the Okl ahoma House of Representatives on a vote of 63-33.

House Bill 1985 by Rep. Bill Brewster, D-Marietta, originally offered only a three-year tax break for increased production from enhanced recovery projects.

But a conference committee rewrote it to include several remedies suggested by oil and gas lobbyists at a meeting called last month by House Speaker Jim Barker, D-Muskogee.

Rep. E.C. "Sandy" Sanders, D-Oklahoma City, protested the bill's provision to slash the fees that cities can charge for drilling permits.

"This is going to cost the City of Oklahoma City $739,000," Sanders said.

If it becomes law, House Bill 1985 will limit municipal drilling permits to $500 each.

Oklahoma City now charges $3,500 for a drilling permit, Sanders said.

A two-hour debate was touched off over the bill's provision to repeal a 1985 law to make oil companies and pipelines jointly liable with well operators for royalty payments.

That 1985 law, known as Senate Bill 160, also was passed as an attempt to ensure that royalty owners receive their additional one-sixteenth interest payments.

Senate Bill 160 is the subject of an appeal by pipeline companies pending before the Oklahoma Supreme Court.

Rep. Kevin Easley, D-Tulsa, an accountant for an oil firm, said Senate Bill 160 had created bookkeeping problems for oil companies.

"It's an accounting nightmare for oil companies," Easley said. "Most of the royalty owners aren't getting paid, under this new law."

But Rep. Jim Hamilton, D-Poteau, said oil companies like Brewster's bill because they don't want to make the additional royalty payments required by Senate Bill 160.

"If they wanted to abide by the law, they'd start writing the checks," Hamilton said. "But they don't want to write the checks because it's going to cost them hundreds of millions of dollars. …

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