American Oil and Gas Reporter - April 2015 - 39

Hinchey says. HB 238, offered by Representative Samuel Krone, R-Cody, specified that vented or flared natural gas
was exempt from taxation for a specified
time. It failed to pass the House Resources
Committee.
"HB 238 was proposed late in the
session. I know the Wyoming Oil & Gas
Commission will be looking at something
like this," Hinchey says. "The commission
has full authority over flaring. The association would like the commission to
keep that, rather than imposing any statutes
about flaring, and whether (flared gas)
will be taxed. The governor sits on the
commission, and so it certainly has full
authority to allow flaring."

State Budget
The commodity price drop is impacting
Wyoming's tax revenues, Hinchey says.
According to state estimates, he says,
every $5 drop in oil prices drains $30
million in taxes from the state treasury.
So far, Wyoming has seen a $300 million
hit to its budget, he says.
Fortunately, he adds, the state's emergency funds have a healthy balance, with
lawmakers tucking away more than $1
billion for such situations.
One bill that legislators did approve
in 2015 was SF 423, sponsored by the
Joint Revenue Interim Committee, which
establishes a mineral taxes task force.
According to the legislative website, the
task force will consist of four legislative
members and six appointed members.

The group is tasked with recommending
a fair, viable and simplified system for
valuing and taxing minerals, and to consider whether proposed changes can be
revenue neutral to state and local governments as well as industry.
Hinchey says the tax force will include
members from the minerals industry, such
as coal and oil and gas representatives.
"Wyoming has severance and ad valorem taxes, and is considering combining
the two. Doing that will reduce the number
of audits and lawsuits because there will
be fewer questions on why things do not
match," he says. "It will help the counties
because they will be collecting ad valorem
taxes immediately instead of a year later,
which will make a lot of difference to
their budgets."
The proposal also will study whether
the state should collect all tax revenues
and distribute the funds to the counties.
Hinchey says PAW supports the task force
initiative, as long as it remains true to its
objective of simplifying the state tax system.
As of late March, there were 29 rigs
working in Wyoming, Hinchey says,
adding that was close to the low-water
mark of 23, which was set during World
War II. "The state is approaching the
point where rig activity is extremely low.
That impacts jobs, and certainly tax revenues," Hinchey says. "It will impact
cities, towns and counties, with lower
sales tax revenues than normal. But prices
can change overnight and make a big
difference."
Ì

Illinois Association Supports
State Regulators' Proposals
SPRINGFIELD, IL.-According to the
Illinois Oil & Gas Association, the 2015
Illinois General Assembly has introduced
several industry-related bills this session,
of which IOGA supports six, opposes
two, and is neutral on one.
IOGA General Counsel Craig R. Hedin
of Gesell's Pump Sales & Service Inc.,
comments that the association is supporting
several measures in conjunction with the
Illinois Department of Natural Resources:
* HB 313 seeks to raise the ceiling
for remitting annual royalty payments to
$100.
* HB 3540 and SB 1562 are companion bills that will authorize IDNR to

Coming In May
KIOGA Coverage

determine whether leases are operative
on the basis that previous leases have
terminated because of nondevelopment
or nonproduction.
* HB 3215 and SB 1378 seek to
amend the hearing process for abandoned
or leaking wells.
* HB 3430 clarifies the use of deficiency letters when issuing permits.
Hedin adds that IOGA opposes HB
3096 and SB 1202, an initiative of the
Illinois Environmental Council that would
prohibit new permits for surface extraction
activities on IDNR or federally owned
lands.
He goes on to say the association is
neutral on an IDNR-proposed initiative
to create stricter penalties for falsifying
or misstating information on any official
IDNR document.
Ì
See story page 168

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American Oil and Gas Reporter - April 2015

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