To enact sections 1509.50 to 1509.54 of the Revised Code to create the Ohio Oil and Natural Gas Resources Agency to conduct specified activities regarding the oil and natural gas industry and to levy an assessment on oil and natural gas production to pay for those activities, and to terminate the provisions of this act on December 31, 2000, by repealing sections 1509.50, 1509.51, 1509.52, 1509.53, and 1509.54 of the Revised Code on that date.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Sec. 1509.50. AS USED IN SECTIONS 1509.50 TO 1509.54 OF THE REVISED CODE:

(A) "FIRST PURCHASER" MEANS:

(1) WITH REGARD TO CRUDE OIL, THE PERSON TO WHOM TITLE FIRST IS TRANSFERRED BEYOND THE GATHERING TANK OR TANKS, BEYOND THE FACILITY FROM WHICH THE CRUDE OIL WAS FIRST PRODUCED, OR BOTH;

(2) WITH REGARD TO NATURAL GAS, THE PERSON TO WHOM TITLE FIRST IS TRANSFERRED BEYOND THE INLET SIDE OF THE MEASUREMENT STATION FROM WHICH THE NATURAL GAS WAS FIRST PRODUCED.

(B) "INDEPENDENT PRODUCER" MEANS A PERSON WHO COMPLIES WITH BOTH OF THE FOLLOWING:

(1) THE PERSON PRODUCES OIL OR NATURAL GAS AND IS NOT ENGAGED IN REFINING EITHER PRODUCT.

(2) THE PERSON DERIVES A MAJORITY OF THE PERSON'S INCOME FROM OWNERSHIP IN PROPERTIES PRODUCING OIL OR NATURAL GAS.

(C) "QUALIFIED INDEPENDENT PRODUCER ASSOCIATION" MEANS AN ASSOCIATION THAT COMPLIES WITH ALL OF THE FOLLOWING:

(1) IT IS IN EXISTENCE ON THE EFFECTIVE DATE OF THIS SECTION.

(2) IT IS ORGANIZED AND OPERATING WITHIN THIS STATE.

(3) A MAJORITY OF THE MEMBERS OF ITS GOVERNING BODY ARE INDEPENDENT PRODUCERS.

Sec. 1509.51. THERE IS HEREBY CREATED THE OHIO OIL AND NATURAL GAS RESOURCES AGENCY CONSISTING OF SEVEN MEMBERS. SIX OF THE MEMBERS SHALL BE INDEPENDENT PRODUCERS. OF THOSE MEMBERS, TWO SHALL BE APPOINTED BY THE GOVERNOR, TWO SHALL BE APPOINTED BY THE PRESIDENT OF THE SENATE, AND TWO SHALL BE APPOINTED BY THE SPEAKER OF THE HOUSE OF REPRESENTATIVES. THE APPOINTING AUTHORITIES SHALL SELECT THEIR APPOINTEES FROM LISTS OF NAMES SUBMITTED BY QUALIFIED INDEPENDENT PRODUCER ASSOCIATIONS. EACH MEMBER WHO IS AN INDEPENDENT PRODUCER SHALL BE AT LEAST TWENTY-FIVE YEARS OLD, BE A RESIDENT OF THIS STATE, AND HAVE AT LEAST FIVE YEARS OF ACTIVE EXPERIENCE IN THE OIL AND NATURAL GAS INDUSTRY.

THE SEVENTH MEMBER SHALL BE A MEMBER OF THE OHIO FARM BUREAU FEDERATION AND SHALL BE APPOINTED BY THE GOVERNOR. THE GOVERNOR SHALL SELECT THAT MEMBER FROM A LIST SUBMITTED BY THE FEDERATION.

THE APPOINTING AUTHORITIES SHALL MAKE THEIR INITIAL APPOINTMENTS NOT LATER THAN NINETY DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION. OF THOSE APPOINTMENTS, THE GOVERNOR SHALL APPOINT ONE MEMBER FOR A TERM OF ONE YEAR, ONE MEMBER FOR A TERM OF TWO YEARS, AND ONE MEMBER FOR A TERM OF THREE YEARS; THE PRESIDENT OF THE SENATE SHALL APPOINT ONE MEMBER FOR A TERM OF TWO YEARS AND ONE MEMBER FOR A TERM OF THREE YEARS; AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES SHALL APPOINT ONE MEMBER FOR A TERM OF ONE YEAR AND ONE MEMBER FOR A TERM OF THREE YEARS. THEREAFTER, TERMS OF OFFICE SHALL BE FOR THREE YEARS WITH EACH TERM ENDING ON THE SAME DAY OF THE SAME MONTH AS DID THE TERM THAT IT SUCCEEDS.

EACH MEMBER SHALL HOLD OFFICE FROM THE DATE OF THE MEMBER'S APPOINTMENT UNTIL THE END OF THE TERM FOR WHICH THE MEMBER WAS APPOINTED. MEMBERS MAY BE REAPPOINTED. VACANCIES SHALL BE FILLED IN THE MANNER PROVIDED FOR ORIGINAL APPOINTMENTS. ANY MEMBER APPOINTED TO FILL A VACANCY OCCURRING PRIOR TO THE EXPIRATION OF THE TERM FOR WHICH THE MEMBER'S PREDECESSOR WAS APPOINTED SHALL HOLD OFFICE FOR THE REMAINDER OF THAT TERM. A MEMBER SHALL CONTINUE IN OFFICE SUBSEQUENT TO THE EXPIRATION OF THE MEMBER'S TERM UNTIL THE MEMBER'S SUCCESSOR TAKES OFFICE OR UNTIL A PERIOD OF SIXTY DAYS HAS ELAPSED, WHICHEVER OCCURS FIRST. AN APPOINTING AUTHORITY MAY REMOVE A MEMBER APPOINTED BY THAT APPOINTING AUTHORITY FOR MISFEASANCE, NONFEASANCE, OR MALFEASANCE IN OFFICE.

THE GOVERNOR SHALL CALL THE INITIAL MEETING OF THE AGENCY. THEREAFTER, THE AGENCY SHALL HOLD REGULAR QUARTERLY MEETINGS EACH YEAR. SPECIAL MEETINGS MAY BE HELD AT THE REQUEST OF THE CHAIRPERSON OR A MAJORITY OF THE MEMBERS. THE CHAIRPERSON, AND OTHER OFFICERS CONSIDERED NECESSARY, SHALL BE SELECTED ANNUALLY BY MEMBERS OF THE AGENCY DURING THE FIRST MEETING OF THE CALENDAR YEAR. A MAJORITY OF THE MEMBERS CONSTITUTE A QUORUM.

MEMBERS SHALL RECEIVE NO COMPENSATION, BUT MAY BE REIMBURSED FOR THEIR ACTUAL AND NECESSARY EXPENSES INCURRED IN THE PERFORMANCE OF THEIR DUTIES AS MEMBERS OF THE AGENCY.

Sec. 1509.52. (A) THE PURPOSES OF THE OHIO OIL AND NATURAL GAS RESOURCES AGENCY ARE TO COORDINATE A PROGRAM THAT DEMONSTRATES TO THE GENERAL PUBLIC THE IMPORTANCE AND ECONOMIC SIGNIFICANCE OF THE OIL AND NATURAL GAS INDUSTRY IN THIS STATE, TO ENCOURAGE THE WISE AND EFFICIENT USE OF ENERGY, TO PROMOTE ENVIRONMENTALLY SOUND PRODUCTION METHODS AND TECHNOLOGIES IN THE INDUSTRY, AND TO SUPPORT RESEARCH AND EDUCATIONAL ACTIVITIES CONCERNING THE INDUSTRY.

(B) IN ORDER TO ACCOMPLISH ITS PURPOSES, THE AGENCY SHALL DO ALL OF THE FOLLOWING:

(1) ADMINISTER AND ENFORCE SECTIONS 1509.50 TO 1509.54 OF THE REVISED CODE;

(2) ADOPT RULES IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE NECESSARY TO ADMINISTER AND ENFORCE THOSE SECTIONS;

(3) MAINTAIN AN OFFICE AT A LOCATION THAT IT DESIGNATES IN THE STATE;

(4) EMPLOY AND FIX THE COMPENSATION OF A DIRECTOR AND OTHER EMPLOYEES NECESSARY TO ACCOMPLISH THE PURPOSES OF THE AGENCY AND PRESCRIBE THEIR DUTIES;

(5) ADMINISTER THE OIL AND NATURAL GAS RESOURCES FUND CREATED IN SECTION 1509.53 OF THE REVISED CODE, INCLUDING, WITHOUT LIMITATION, APPROVING OR DISAPPROVING THE INVESTMENT OF MONEYS IN THE FUND IN ACCORDANCE WITH THAT SECTION;

(6) APPROVE OR DISAPPROVE THE BUDGET OF THE AGENCY;

(7) KEEP ACCURATE RECORDS OF ALL FINANCIAL TRANSACTIONS CONDUCTED UNDER SECTIONS 1509.50 TO 1509.54 OF THE REVISED CODE, INCLUDING, WITHOUT LIMITATION, THE COLLECTION OF ASSESSMENTS UNDER SECTION 1509.54 OF THE REVISED CODE.

(C) IN ORDER TO ACCOMPLISH ITS PURPOSES, THE AGENCY MAY DO ANY OR ALL OF THE FOLLOWING:

(1) ENTER INTO CONTRACTS AND AGREEMENTS FOR STUDIES, RESEARCH PROJECTS, EXPERIMENTAL WORK, SUPPLIES, AND OTHER SERVICES AND INCUR NECESSARY EXPENSES. THE DIRECTOR OF THE AGENCY SHALL DEVELOP AND SUBMIT TO THE AGENCY A PLAN OR PROPOSAL, TOGETHER WITH A BUDGET OR BUDGETS SHOWING ESTIMATED COSTS TO BE INCURRED FOR THE PLAN OR PROPOSAL, FOR EACH CONTRACT OR AGREEMENT. ANY PERSON ENTERING INTO A CONTRACT OR AGREEMENT WITH THE AGENCY SHALL KEEP ACCURATE RECORDS OF ITS TRANSACTIONS, ACCOUNT FOR MONEYS RECEIVED FROM THE AGENCY AND EXPENDED, AND MAKE PERIODIC REPORTS TO THE AGENCY OF ACTIVITIES CONDUCTED UNDER THE CONTRACT OR AGREEMENT AND OTHER REPORTS REQUIRED BY THE AGENCY.

(2) COOPERATE WITH ANY PRIVATE, LOCAL, STATE, OR NATIONAL COMMISSION, ORGANIZATION, OFFICE, OR OTHER GROUP AND ENTER INTO CONTRACTS AND AGREEMENTS FOR JOINT PROGRAMS BENEFICIAL TO THE OIL AND NATURAL GAS INDUSTRY;

(3) ACCEPT DONATIONS, GRANTS, CONTRIBUTIONS, AND GIFTS FROM ANY PUBLIC OR PRIVATE SOURCE AND DEPOSIT THEM IN THE OIL AND NATURAL GAS RESOURCES FUND.

(D) NOTHING IN SECTIONS 1509.50 TO 1509.54 OF THE REVISED CODE SHALL BE CONSTRUED TO PREEMPT OR SUPERSEDE ANY OTHER PROGRAM RELATING TO OIL AND NATURAL GAS PROMOTION OR MARKETING THAT IS ORGANIZED AND OPERATED UNDER THE LAWS OF THIS STATE OR UNDER FEDERAL LAWS.

Sec. 1509.53. (A) THERE IS HEREBY CREATED THE OIL AND NATURAL GAS RESOURCES FUND, WHICH SHALL BE IN THE CUSTODY OF THE TREASURER OF STATE, BUT SHALL NOT BE PART OF THE STATE TREASURY. THE FUND SHALL CONSIST OF MONEYS COLLECTED FROM THE ASSESSMENT LEVIED UNDER SECTION 1509.54 OF THE REVISED CODE, ALL DONATIONS, GRANTS, CONTRIBUTIONS, AND GIFTS RECEIVED BY THE OHIO OIL AND NATURAL GAS RESOURCES AGENCY UNDER DIVISION (C)(3) OF SECTION 1509.52 OF THE REVISED CODE, AND ALL INVESTMENT EARNINGS OF THE FUND PURSUANT TO DIVISION (B) OF THIS SECTION.

(B) THE AGENCY MAY INVEST MONEYS IN THE FUND ONLY IN ANY OF THE FOLLOWING:

(1) BONDS OR OTHER INTEREST-BEARING OBLIGATIONS OF OR GUARANTEED BY THE UNITED STATES OR FOR WHICH THE CREDIT OF THE UNITED STATES IS PLEDGED FOR THE PAYMENT OF PRINCIPAL AND INTEREST;

(2) BONDS OR OTHER INTEREST-BEARING OBLIGATIONS ISSUED BY ANY FEDERAL OFFICE ESTABLISHED BY AN ACT OF THE UNITED STATES CONGRESS;

(3) GENERAL OBLIGATIONS OF ANY STATE, PROVIDED THAT OBLIGATIONS OF ANOTHER STATE, AT THE TIME OF INVESTMENT, ARE RATED IN ONE OF THE FOUR HIGHEST GRADES AS SHOWN BY THE MOST RECENT CURRENT PUBLICATION OF A NATIONALLY RECOGNIZED INVESTMENT RATING SERVICE;

(4) SAVINGS ACCOUNTS OR CERTIFICATES OF DEPOSIT OF A NATIONAL BANK, STATE BANK, OR SAVINGS AND LOAN ASSOCIATION, PROVIDED THAT THE ACCOUNTS OR CERTIFICATES ARE INSURED BY ANY OF THE AGENCIES OR INSTRUMENTALITIES CREATED UNDER THE "FEDERAL DEPOSIT INSURANCE ACT," 64 STAT. 873 (1950), 12 U.S.C.A. 1811, AS AMENDED, AND REGULATIONS ADOPTED UNDER IT, INCLUDING, WITHOUT LIMITATION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND, AND SAVINGS ASSOCIATION INSURANCE FUND.

(C) THE AGENCY SHALL EXPEND MONEYS IN THE FUND SOLELY FOR THE PURPOSES OF SECTIONS 1509.50 TO 1509.54 OF THE REVISED CODE. THE TREASURER OF STATE SHALL DISBURSE MONEYS FROM THE FUND ON ORDER OF THE AGENCY.

Sec. 1509.54. (A) THERE IS HEREBY LEVIED AN ASSESSMENT OF ONE CENT PER EACH GROSS BARREL OF OIL AND ONE-TENTH OF ONE CENT PER THOUSAND CUBIC FEET OF NATURAL GAS PRODUCED IN THIS STATE. THE FIRST PURCHASER OF THE GROSS PRODUCTION OF OIL OR NATURAL GAS, AS APPROPRIATE, SHALL DEDUCT THE AMOUNT OF THE ASSESSMENT FROM THE PROCEEDS OF THE GROSS PRODUCTION WHEN COMPENSATING THE PRODUCER OR ROYALTY OWNER.

THE FIRST PURCHASER SHALL REMIT THE ASSESSMENT TO THE OHIO OIL AND NATURAL GAS RESOURCES AGENCY FOR DEPOSIT IN THE OIL AND NATURAL GAS RESOURCES FUND CREATED IN SECTION 1509.53 OF THE REVISED CODE. THE FIRST PURCHASER SHALL REMIT THE ASSESSMENT IN ACCORDANCE WITH THE REQUIREMENTS ESTABLISHED, AND USING FORMS PRESCRIBED, IN RULES ADOPTED UNDER DIVISION (B)(2) OF SECTION 1509.52 OF THE REVISED CODE. THE ASSESSMENT SHALL BE REMITTED NOT LATER THAN FORTY-FIVE DAYS AFTER THE END OF EACH CALENDAR QUARTER, WITH THE QUARTERS ENDING ON THE THIRTY-FIRST DAY OF MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER, AND THE THIRTY-FIRST DAY OF DECEMBER. HOWEVER, CUMULATIVE AMOUNTS OF NOT MORE THAN TWENTY-FIVE DOLLARS MAY BE REMITTED ANNUALLY, NOT LATER THAN FORTY-FIVE DAYS AFTER THE THIRTY-FIRST DAY OF DECEMBER.

THE AGENCY MAY TAKE APPROPRIATE LEGAL ACTIONS TO COLLECT AN ASSESSMENT THAT HAS NOT BEEN PAID OR THAT HAS NOT BEEN PAID IN ACCORDANCE WITH THE REQUIREMENTS ESTABLISHED IN RULES ADOPTED UNDER DIVISION (B)(2) OF SECTION 1509.52 OF THE REVISED CODE, INCLUDING, WITHOUT LIMITATION, RECOVERY OF THE AMOUNT ASSESSED, TOGETHER WITH INTEREST, BY SUIT BEFORE A COURT OF COMPETENT JURISDICTION.

(B) A PERSON WHO IS SUBJECT TO THE ASSESSMENT LEVIED UNDER DIVISION (A) OF THIS SECTION MAY REQUEST A REFUND OF THE AMOUNT OF THE ASSESSMENT PAID BY THAT PERSON ON THE PRODUCTION OF OIL OR NATURAL GAS DURING THE PRECEDING CALENDAR YEAR. THE PERSON HAS THE BURDEN OF PROVING THAT THE PERSON IS ENTITLED TO A REFUND.

THE AGENCY SHALL REFUND TO THE PERSON THE AMOUNT OF THE ASSESSMENT PAID DURING THE PRECEDING CALENDAR YEAR IF THE PERSON REQUESTING THE REFUND COMPLIES WITH THE PROCEDURES AND REQUIREMENTS GOVERNING REFUNDS THAT ARE ESTABLISHED IN RULES ADOPTED UNDER DIVISION (B)(2) OF SECTION 1509.52 OF THE REVISED CODE AND PROVES THAT THE PERSON IS ENTITLED TO A REFUND.

A PERSON WHO REQUESTS A REFUND UNDER THIS DIVISION IS NOT ELIGIBLE TO SERVE OR TO HAVE A REPRESENTATIVE SERVE AS A MEMBER OF THE AGENCY.

(C) IF A NATIONAL PROGRAM FOR AN ASSESSMENT ON OIL AND NATURAL GAS PRODUCTION IS ESTABLISHED, THE AGENCY, BY A MAJORITY VOTE, MAY DESIGNATE NOT MORE THAN FIFTY PER CENT OF THE MONEYS COLLECTED UNDER DIVISION (A) OF THIS SECTION FOR PAYMENT TO THAT NATIONAL PROGRAM IN LIEU OF ANY ASSESSMENT THAT IS REQUIRED BY THAT PROGRAM.