As Introduced 1
122nd General Assembly 4
Regular Session S. B. No. 46 5
1997-1998 6
SENATORS CARNES-DIX 8
10
A B I L L
To enact sections 1509.50 to 1509.54 of the Revised 12
Code to create the Ohio Oil and Natural Gas 13
Resources Agency to conduct specified activities 14
regarding the oil and natural gas industry and to 15
levy an assessment on oil and natural gas
production to pay for those activities, and to 16
terminate the provisions of this act on December 17
31, 2000, by repealing sections 1509.50, 1509.51, 18
1509.52, 1509.53, and 1509.54 of the Revised Code
on that date. 19
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 21
Section 1. That sections 1509.50, 1509.51, 1509.52, 23
1509.53, and 1509.54 of the Revised Code be enacted to read as 24
follows:
Sec. 1509.50. AS USED IN SECTIONS 1509.50 TO 1509.54 OF 26
THE REVISED CODE: 28
(A) "FIRST PURCHASER" MEANS: 31
(1) WITH REGARD TO CRUDE OIL, THE PERSON TO WHOM TITLE 33
FIRST IS TRANSFERRED BEYOND THE GATHERING TANK OR TANKS, BEYOND 34
THE FACILITY FROM WHICH THE CRUDE OIL WAS FIRST PRODUCED, OR 35
BOTH; 36
(2) WITH REGARD TO NATURAL GAS, THE PERSON TO WHOM TITLE 38
FIRST IS TRANSFERRED BEYOND THE INLET SIDE OF THE MEASUREMENT 39
STATION FROM WHICH THE NATURAL GAS WAS FIRST PRODUCED. 40
(B) "INDEPENDENT PRODUCER" MEANS A PERSON WHO COMPLIES 43
WITH BOTH OF THE FOLLOWING:
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(1) THE PERSON PRODUCES OIL OR NATURAL GAS AND IS NOT 45
ENGAGED IN REFINING EITHER PRODUCT.
(2) THE PERSON DERIVES A MAJORITY OF THE PERSON'S INCOME 47
FROM OWNERSHIP IN PROPERTIES PRODUCING OIL OR NATURAL GAS. 48
(C) "QUALIFIED INDEPENDENT PRODUCER ASSOCIATION" MEANS AN 51
ASSOCIATION THAT COMPLIES WITH ALL OF THE FOLLOWING: 52
(1) IT IS IN EXISTENCE ON THE EFFECTIVE DATE OF THIS 54
SECTION. 55
(2) IT IS ORGANIZED AND OPERATING WITHIN THIS STATE. 58
(3) A MAJORITY OF THE MEMBERS OF ITS GOVERNING BODY ARE 60
INDEPENDENT PRODUCERS. 61
Sec. 1509.51. THERE IS HEREBY CREATED THE OHIO OIL AND 65
NATURAL GAS RESOURCES AGENCY CONSISTING OF SEVEN MEMBERS. SIX OF 66
THE MEMBERS SHALL BE INDEPENDENT PRODUCERS. OF THOSE MEMBERS, 67
TWO SHALL BE APPOINTED BY THE GOVERNOR, TWO SHALL BE APPOINTED BY 68
THE PRESIDENT OF THE SENATE, AND TWO SHALL BE APPOINTED BY THE 69
SPEAKER OF THE HOUSE OF REPRESENTATIVES. THE APPOINTING 70
AUTHORITIES SHALL SELECT THEIR APPOINTEES FROM LISTS OF NAMES 71
SUBMITTED BY QUALIFIED INDEPENDENT PRODUCER ASSOCIATIONS. EACH 72
MEMBER WHO IS AN INDEPENDENT PRODUCER SHALL BE AT LEAST 73
TWENTY-FIVE YEARS OLD, BE A RESIDENT OF THIS STATE, AND HAVE AT 74
LEAST FIVE YEARS OF ACTIVE EXPERIENCE IN THE OIL AND NATURAL GAS 75
INDUSTRY.
THE SEVENTH MEMBER SHALL BE A MEMBER OF THE OHIO FARM 78
BUREAU FEDERATION AND SHALL BE APPOINTED BY THE GOVERNOR. THE 79
GOVERNOR SHALL SELECT THAT MEMBER FROM A LIST SUBMITTED BY THE 80
FEDERATION.
THE APPOINTING AUTHORITIES SHALL MAKE THEIR INITIAL 82
APPOINTMENTS NOT LATER THAN NINETY DAYS AFTER THE EFFECTIVE DATE 83
OF THIS SECTION. OF THOSE APPOINTMENTS, THE GOVERNOR SHALL 84
APPOINT ONE MEMBER FOR A TERM OF ONE YEAR, ONE MEMBER FOR A TERM 85
OF TWO YEARS, AND ONE MEMBER FOR A TERM OF THREE YEARS; THE 86
PRESIDENT OF THE SENATE SHALL APPOINT ONE MEMBER FOR A TERM OF 87
TWO YEARS AND ONE MEMBER FOR A TERM OF THREE YEARS; AND THE 88
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SPEAKER OF THE HOUSE OF REPRESENTATIVES SHALL APPOINT ONE MEMBER 89
FOR A TERM OF ONE YEAR AND ONE MEMBER FOR A TERM OF THREE YEARS. 90
THEREAFTER, TERMS OF OFFICE SHALL BE FOR THREE YEARS WITH EACH 91
TERM ENDING ON THE SAME DAY OF THE SAME MONTH AS DID THE TERM 92
THAT IT SUCCEEDS. 93
EACH MEMBER SHALL HOLD OFFICE FROM THE DATE OF THE MEMBER'S 96
APPOINTMENT UNTIL THE END OF THE TERM FOR WHICH THE MEMBER WAS 97
APPOINTED. MEMBERS MAY BE REAPPOINTED. VACANCIES SHALL BE 98
FILLED IN THE MANNER PROVIDED FOR ORIGINAL APPOINTMENTS. ANY
MEMBER APPOINTED TO FILL A VACANCY OCCURRING PRIOR TO THE 99
EXPIRATION OF THE TERM FOR WHICH THE MEMBER'S PREDECESSOR WAS 100
APPOINTED SHALL HOLD OFFICE FOR THE REMAINDER OF THAT TERM. A 101
MEMBER SHALL CONTINUE IN OFFICE SUBSEQUENT TO THE EXPIRATION OF 102
THE MEMBER'S TERM UNTIL THE MEMBER'S SUCCESSOR TAKES OFFICE OR 103
UNTIL A PERIOD OF SIXTY DAYS HAS ELAPSED, WHICHEVER OCCURS FIRST. 104
AN APPOINTING AUTHORITY MAY REMOVE A MEMBER APPOINTED BY THAT 105
APPOINTING AUTHORITY FOR MISFEASANCE, NONFEASANCE, OR MALFEASANCE 107
IN OFFICE.
THE GOVERNOR SHALL CALL THE INITIAL MEETING OF THE AGENCY. 109
THEREAFTER, THE AGENCY SHALL HOLD REGULAR QUARTERLY MEETINGS EACH 111
YEAR. SPECIAL MEETINGS MAY BE HELD AT THE REQUEST OF THE 112
CHAIRPERSON OR A MAJORITY OF THE MEMBERS. THE CHAIRPERSON, AND 113
OTHER OFFICERS CONSIDERED NECESSARY, SHALL BE SELECTED ANNUALLY 114
BY MEMBERS OF THE AGENCY DURING THE FIRST MEETING OF THE CALENDAR 115
YEAR. A MAJORITY OF THE MEMBERS CONSTITUTE A QUORUM. 116
MEMBERS SHALL RECEIVE NO COMPENSATION, BUT MAY BE 118
REIMBURSED FOR THEIR ACTUAL AND NECESSARY EXPENSES INCURRED IN 119
THE PERFORMANCE OF THEIR DUTIES AS MEMBERS OF THE AGENCY. 120
Sec. 1509.52. (A) THE PURPOSES OF THE OHIO OIL AND 123
NATURAL GAS RESOURCES AGENCY ARE TO COORDINATE A PROGRAM THAT 124
DEMONSTRATES TO THE GENERAL PUBLIC THE IMPORTANCE AND ECONOMIC 125
SIGNIFICANCE OF THE OIL AND NATURAL GAS INDUSTRY IN THIS STATE, 126
TO ENCOURAGE THE WISE AND EFFICIENT USE OF ENERGY, TO PROMOTE 127
ENVIRONMENTALLY SOUND PRODUCTION METHODS AND TECHNOLOGIES IN THE 128
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INDUSTRY, AND TO SUPPORT RESEARCH AND EDUCATIONAL ACTIVITIES 129
CONCERNING THE INDUSTRY. 130
(B) IN ORDER TO ACCOMPLISH ITS PURPOSES, THE AGENCY SHALL 133
DO ALL OF THE FOLLOWING: 134
(1) ADMINISTER AND ENFORCE SECTIONS 1509.50 TO 1509.54 OF 136
THE REVISED CODE; 137
(2) ADOPT RULES IN ACCORDANCE WITH CHAPTER 119. OF THE 140
REVISED CODE NECESSARY TO ADMINISTER AND ENFORCE THOSE SECTIONS; 141
(3) MAINTAIN AN OFFICE AT A LOCATION THAT IT DESIGNATES IN 144
THE STATE;
(4) EMPLOY AND FIX THE COMPENSATION OF A DIRECTOR AND 146
OTHER EMPLOYEES NECESSARY TO ACCOMPLISH THE PURPOSES OF THE 147
AGENCY AND PRESCRIBE THEIR DUTIES; 148
(5) ADMINISTER THE OIL AND NATURAL GAS RESOURCES FUND 150
CREATED IN SECTION 1509.53 OF THE REVISED CODE, INCLUDING, 152
WITHOUT LIMITATION, APPROVING OR DISAPPROVING THE INVESTMENT OF 153
MONEYS IN THE FUND IN ACCORDANCE WITH THAT SECTION; 154
(6) APPROVE OR DISAPPROVE THE BUDGET OF THE AGENCY; 157
(7) KEEP ACCURATE RECORDS OF ALL FINANCIAL TRANSACTIONS 159
CONDUCTED UNDER SECTIONS 1509.50 TO 1509.54 OF THE REVISED CODE, 161
INCLUDING, WITHOUT LIMITATION, THE COLLECTION OF ASSESSMENTS 162
UNDER SECTION 1509.54 OF THE REVISED CODE. 163
(C) IN ORDER TO ACCOMPLISH ITS PURPOSES, THE AGENCY MAY DO 166
ANY OR ALL OF THE FOLLOWING: 167
(1) ENTER INTO CONTRACTS AND AGREEMENTS FOR STUDIES, 169
RESEARCH PROJECTS, EXPERIMENTAL WORK, SUPPLIES, AND OTHER 170
SERVICES AND INCUR NECESSARY EXPENSES. THE DIRECTOR OF THE 171
AGENCY SHALL DEVELOP AND SUBMIT TO THE AGENCY A PLAN OR PROPOSAL, 173
TOGETHER WITH A BUDGET OR BUDGETS SHOWING ESTIMATED COSTS TO BE 174
INCURRED FOR THE PLAN OR PROPOSAL, FOR EACH CONTRACT OR 175
AGREEMENT. ANY PERSON ENTERING INTO A CONTRACT OR AGREEMENT WITH 176
THE AGENCY SHALL KEEP ACCURATE RECORDS OF ITS TRANSACTIONS,
ACCOUNT FOR MONEYS RECEIVED FROM THE AGENCY AND EXPENDED, AND 177
MAKE PERIODIC REPORTS TO THE AGENCY OF ACTIVITIES CONDUCTED UNDER 179
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THE CONTRACT OR AGREEMENT AND OTHER REPORTS REQUIRED BY THE 180
AGENCY.
(2) COOPERATE WITH ANY PRIVATE, LOCAL, STATE, OR NATIONAL 182
COMMISSION, ORGANIZATION, OFFICE, OR OTHER GROUP AND ENTER INTO 183
CONTRACTS AND AGREEMENTS FOR JOINT PROGRAMS BENEFICIAL TO THE OIL 185
AND NATURAL GAS INDUSTRY;
(3) ACCEPT DONATIONS, GRANTS, CONTRIBUTIONS, AND GIFTS 187
FROM ANY PUBLIC OR PRIVATE SOURCE AND DEPOSIT THEM IN THE OIL AND 189
NATURAL GAS RESOURCES FUND.
(D) NOTHING IN SECTIONS 1509.50 TO 1509.54 OF THE REVISED 192
CODE SHALL BE CONSTRUED TO PREEMPT OR SUPERSEDE ANY OTHER PROGRAM 193
RELATING TO OIL AND NATURAL GAS PROMOTION OR MARKETING THAT IS 194
ORGANIZED AND OPERATED UNDER THE LAWS OF THIS STATE OR UNDER 195
FEDERAL LAWS. 196
Sec. 1509.53. (A) THERE IS HEREBY CREATED THE OIL AND 199
NATURAL GAS RESOURCES FUND, WHICH SHALL BE IN THE CUSTODY OF THE 200
TREASURER OF STATE, BUT SHALL NOT BE PART OF THE STATE TREASURY. 201
THE FUND SHALL CONSIST OF MONEYS COLLECTED FROM THE ASSESSMENT 202
LEVIED UNDER SECTION 1509.54 OF THE REVISED CODE, ALL DONATIONS, 203
GRANTS, CONTRIBUTIONS, AND GIFTS RECEIVED BY THE OHIO OIL AND 204
NATURAL GAS RESOURCES AGENCY UNDER DIVISION (C)(3) OF SECTION 205
1509.52 OF THE REVISED CODE, AND ALL INVESTMENT EARNINGS OF THE 206
FUND PURSUANT TO DIVISION (B) OF THIS SECTION. 207
(B) THE AGENCY MAY INVEST MONEYS IN THE FUND ONLY IN ANY 209
OF THE FOLLOWING: 210
(1) BONDS OR OTHER INTEREST-BEARING OBLIGATIONS OF OR 212
GUARANTEED BY THE UNITED STATES OR FOR WHICH THE CREDIT OF THE 214
UNITED STATES IS PLEDGED FOR THE PAYMENT OF PRINCIPAL AND 215
INTEREST;
(2) BONDS OR OTHER INTEREST-BEARING OBLIGATIONS ISSUED BY 217
ANY FEDERAL OFFICE ESTABLISHED BY AN ACT OF THE UNITED STATES 220
CONGRESS;
(3) GENERAL OBLIGATIONS OF ANY STATE, PROVIDED THAT 222
OBLIGATIONS OF ANOTHER STATE, AT THE TIME OF INVESTMENT, ARE 223
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RATED IN ONE OF THE FOUR HIGHEST GRADES AS SHOWN BY THE MOST 224
RECENT CURRENT PUBLICATION OF A NATIONALLY RECOGNIZED INVESTMENT 225
RATING SERVICE; 226
(4) SAVINGS ACCOUNTS OR CERTIFICATES OF DEPOSIT OF A 228
NATIONAL BANK, STATE BANK, OR SAVINGS AND LOAN ASSOCIATION, 229
PROVIDED THAT THE ACCOUNTS OR CERTIFICATES ARE INSURED BY ANY OF 230
THE AGENCIES OR INSTRUMENTALITIES CREATED UNDER THE "FEDERAL 232
DEPOSIT INSURANCE ACT," 64 STAT. 873 (1950), 12 U.S.C.A. 1811, AS 234
AMENDED, AND REGULATIONS ADOPTED UNDER IT, INCLUDING, WITHOUT 235
LIMITATION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, BANK 236
INSURANCE FUND, AND SAVINGS ASSOCIATION INSURANCE FUND. 237
(C) THE AGENCY SHALL EXPEND MONEYS IN THE FUND SOLELY FOR 240
THE PURPOSES OF SECTIONS 1509.50 TO 1509.54 OF THE REVISED CODE. 241
THE TREASURER OF STATE SHALL DISBURSE MONEYS FROM THE FUND ON 242
ORDER OF THE AGENCY.
Sec. 1509.54. (A) THERE IS HEREBY LEVIED AN ASSESSMENT OF 245
ONE CENT PER EACH GROSS BARREL OF OIL AND ONE-TENTH OF ONE CENT 246
PER THOUSAND CUBIC FEET OF NATURAL GAS PRODUCED IN THIS STATE. 247
THE FIRST PURCHASER OF THE GROSS PRODUCTION OF OIL OR NATURAL 248
GAS, AS APPROPRIATE, SHALL DEDUCT THE AMOUNT OF THE ASSESSMENT 249
FROM THE PROCEEDS OF THE GROSS PRODUCTION WHEN COMPENSATING THE 250
PRODUCER OR ROYALTY OWNER. 251
THE FIRST PURCHASER SHALL REMIT THE ASSESSMENT TO THE OHIO 254
OIL AND NATURAL GAS RESOURCES AGENCY FOR DEPOSIT IN THE OIL AND 255
NATURAL GAS RESOURCES FUND CREATED IN SECTION 1509.53 OF THE 257
REVISED CODE. THE FIRST PURCHASER SHALL REMIT THE ASSESSMENT IN 258
ACCORDANCE WITH THE REQUIREMENTS ESTABLISHED, AND USING FORMS 259
PRESCRIBED, IN RULES ADOPTED UNDER DIVISION (B)(2) OF SECTION 260
1509.52 OF THE REVISED CODE. THE ASSESSMENT SHALL BE REMITTED 262
NOT LATER THAN FORTY-FIVE DAYS AFTER THE END OF EACH CALENDAR 263
QUARTER, WITH THE QUARTERS ENDING ON THE THIRTY-FIRST DAY OF 264
MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER, 265
AND THE THIRTY-FIRST DAY OF DECEMBER. HOWEVER, CUMULATIVE 266
AMOUNTS OF NOT MORE THAN TWENTY-FIVE DOLLARS MAY BE REMITTED 267
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ANNUALLY, NOT LATER THAN FORTY-FIVE DAYS AFTER THE THIRTY-FIRST
DAY OF DECEMBER. 268
THE AGENCY MAY TAKE APPROPRIATE LEGAL ACTIONS TO COLLECT AN 271
ASSESSMENT THAT HAS NOT BEEN PAID OR THAT HAS NOT BEEN PAID IN 272
ACCORDANCE WITH THE REQUIREMENTS ESTABLISHED IN RULES ADOPTED
UNDER DIVISION (B)(2) OF SECTION 1509.52 OF THE REVISED CODE, 274
INCLUDING, WITHOUT LIMITATION, RECOVERY OF THE AMOUNT ASSESSED,
TOGETHER WITH INTEREST, BY SUIT BEFORE A COURT OF COMPETENT 275
JURISDICTION.
(B) A PERSON WHO IS SUBJECT TO THE ASSESSMENT LEVIED UNDER 278
DIVISION (A) OF THIS SECTION MAY REQUEST A REFUND OF THE AMOUNT 280
OF THE ASSESSMENT PAID BY THAT PERSON ON THE PRODUCTION OF OIL OR 281
NATURAL GAS DURING THE PRECEDING CALENDAR YEAR. THE PERSON HAS 282
THE BURDEN OF PROVING THAT THE PERSON IS ENTITLED TO A REFUND. 283
THE AGENCY SHALL REFUND TO THE PERSON THE AMOUNT OF THE 285
ASSESSMENT PAID DURING THE PRECEDING CALENDAR YEAR IF THE PERSON 286
REQUESTING THE REFUND COMPLIES WITH THE PROCEDURES AND 287
REQUIREMENTS GOVERNING REFUNDS THAT ARE ESTABLISHED IN RULES 288
ADOPTED UNDER DIVISION (B)(2) OF SECTION 1509.52 OF THE REVISED 290
CODE AND PROVES THAT THE PERSON IS ENTITLED TO A REFUND. 291
A PERSON WHO REQUESTS A REFUND UNDER THIS DIVISION IS NOT 293
ELIGIBLE TO SERVE OR TO HAVE A REPRESENTATIVE SERVE AS A MEMBER 294
OF THE AGENCY. 295
(C) IF A NATIONAL PROGRAM FOR AN ASSESSMENT ON OIL AND 298
NATURAL GAS PRODUCTION IS ESTABLISHED, THE AGENCY, BY A MAJORITY 299
VOTE, MAY DESIGNATE NOT MORE THAN FIFTY PER CENT OF THE MONEYS 300
COLLECTED UNDER DIVISION (A) OF THIS SECTION FOR PAYMENT TO THAT 302
NATIONAL PROGRAM IN LIEU OF ANY ASSESSMENT THAT IS REQUIRED BY 303
THAT PROGRAM.
Section 2. Sections 1509.50, 1509.51, 1509.52, 1509.53, 305
and 1509.54 of the Revised Code are hereby repealed, effective 306
December 31, 2000. 307