Simmons: HB2247 an investment-killing tax on Oklahoma’s defining industry
By Brook A. Simmons
Only one day into the 2023 legislative session and Oklahoma’s oil and natural gas industry is already engaged in defeating its first ill-conceived legislative proposal.
House Bill 2247, if approved, would give Oklahoma counties the option to enact a $10-per-acre tax on mineral owners where the minerals have been severed from ownership of the surface rights whether those minerals are being produced or not.
The legislation has been assigned to the House Appropriation and Budget Subcommittee on General Government and could be added to the committee agenda at any time. Approval at the committee level would send to the bill to the House floor for further consideration.
It is a no-brainer for The Petroleum Alliance and its thousands of members and mineral owner allies to oppose this legislation merely on the fact that it is a new, job-killing, investment-killing tax on the state’s defining industry, but the impact of the legislation might be far greater than the dollars it would immediately remove from the oil and gas economy.
The proposed legislation would hit mineral owners, oil and natural gas producers who own the minerals they produce, trusts, university endowments, charitable foundations, and any other “lawfully recognized business or legal entity.” The bill would also set a precedent for county-level taxes and regulations on the oil and natural gas industry and any other industry.
Oklahoma’s existing businesses and out-of-state businesses looking to Oklahoma for expansion or a new home could potentially face a patchwork of different taxes and regulations from county to county if HB 2247 were enacted.
In its “Priority Evaluation: Business Tax Modernization” released earlier this year, the Legislative Office of Fiscal Transparency noted that state leaders have worked for three decades to make Oklahoma’s tax burden competitive. HB 2247 is one poorly conceived piece of legislation that could unwind 30 years of incomplete work.
— Brook A. Simmons is president of The Petroleum Alliance of Oklahoma