Vote Smart's Synopsis:

Vote to pass a bill that restructures the tax on oil and gas drilling operations.

Highlights:

• Amends the oil severance tax as follows, beginning October 1, 2014 (Sec. 1):
• Existing Law
• $0.10 per barrel of oil; and
• $0.025 per thousand cubic feet of natural gas.
• New Law
• $0.10 per barrel of oil severed from a well that is not a horizontal well; 
• $0.015 per thousand cubic feet of gas severed from a well that is not a horizontal well; and
• 2.5 percent of the gross receipts from the first sale of that oil and gas from a horizontal well. 

• Exempts the first $10 million of wellhead gross receipts after deduction for certain payments to “holders of a royalty interest” from the 2.5 percent severance tax (Sec. 1).

• Appropriates the following amounts from the Oil and Gas Severance Fund by June 25 of each calendar year (Sec. 1):
• $15 million to the Oil and Gas Well Fund;
• $3 million to the Well Plugging Fund; and
• $3 million to the Geological Mapping Fund; and
• The lesser of the following amount to the Local Government Reimbursement Fund:
• The amount remaining in the fund; or 
• 17.5 percent of the balance before transfers to the Local Government Reimbursement Fund; and
• Any remaining funds to the Income Tax Reduction Fund.

• Establishes the “Idle and Orphaned Well Program” in the Division of Oil and Gas Resources Management to perform certain tasks that include, but are not limited to, the following tasks (Sec. 1):
• To maintain an inventory of known and suspected idle wells; and 
• To prioritize the plugging of such wells based on the well’s relative risk to public health and safety.

Full Bill Text