Gross production tax bill advances

Journal Record, The (Oklahoma City), Apr 4, 2002

OKLAHOMA CITY (JR) -- The state House Revenue and Taxation Committee passed a bill on Wednesday that would establish a tiered system for the gross production tax on natural gas, similar to that set up on crude oil several years ago.

Under Senate Bill 947, by Sen. Johnnie Crutchfield, D-Ardmore, and Rep. Larry Rice, D-Pryor, the tax would range from 7 percent when gas sells at or above $2.50 per million BTU, to 1 percent when it falls to less than $2 per million BTU. The tiered system would terminate July 1, 2007.

The bill also raises from $3 to $5 per million BTU the price cap above which a series of gross production tax exemptions do not apply to natural gas production. In addition, it would establish a tiered exemption for economically at-risk oil and natural gas leases.

Rice said that a House fiscal staff analysis pegs the bill's cost to state tax coffers at $126 million, but he expressed some reservations about that figure.