HB 375 Summary

• Restructures Ohio's oil and gas severance tax effective October 1, 2014, changing from a per-unit basis to a 2.5% tax on wellhead gross receipts from horizontal wells, while maintaining per-unit taxes on vertical wells and other natural resources.

• Creates the Ohio Shale Gas Regional Commission composed of 11 members appointed by the governor, House speaker, and Senate president to oversee distribution of severance tax revenues to eligible counties and subdivisions.

• Establishes two new funds: the Ohio Shale Gas Infrastructure Development Fund (for permanent improvements in eligible subdivisions) and the Severance Tax Legacy Fund (available for grants starting in fiscal year 2025).

• Authorizes a nonrefundable income tax credit for royalty interest holders equal to 12.5% of oil and gas severance tax paid by the severer, preventing double taxation.

• Excludes receipts from first sale of oil and gas severed after October 1, 2014 from the commercial activity tax base for taxpayers subject to the severance tax or their pass-through entity owners.