Oklahoma City attorney threatening lawsuit over gross production tax bill

Oklahoma City attorney Jerry Fent says the process for a new oil and gas bill violates Oklahoma’s constitutional procedures.
by Rick Green Modified: May 27, 2014 at 9:18 pm •  Published: May 28, 2014
Advertisement
;

An Oklahoma City attorney who has successfully sued the state in the past is threatening another lawsuit if Gov. Mary Fallin signs into law a bill setting a revised tax rate for oil and natural gas wells.

Jerry Fent delivered a letter to the governor’s office Tuesday saying the bill fails to meet requirements in the Oklahoma Constitution for revenue measures. Specifically, he said House Bill 2562 violated requirements that revenue bills be approved by three-fourths of the membership of the House and Senate and that such bills should not be passed in the last five days of a session.

“Based upon your signing an oath to support, obey and defend the Oklahoma Constitution, I respectfully request you not approve HB 2562,” Fent said in the letter. “If you approve HB 2562, I will consider filing an action in the Oklahoma Supreme Court to stop this bill.”

The bill was passed Thursday, one day before the Legislature ended its session. It was approved 61-34 in the House and 30-14 in the Senate.

The bill sets the state’s gross production tax rate for oil and natural gas wells at 2 percent for the first 36 months of production, and 7 percent thereafter.

The state historically has assessed a 7 percent tax. In 1994, the Legislature created an incentive for horizontal drilling. The incentive initially lowered the tax rate to 1 percent for the first two years or until costs were recovered. In 2002, the incentive was extended up to four years. The incentive program is set to expire next year, which would return the tax rate to 7 percent.

Fallin spokesman Alex Weintz said Fent’s opinion of the bill won’t determine whether it is signed into law.

Continue reading this story on the...

by Rick Green
Capitol Bureau Chief
Rick Green is the Capitol Bureau Chief of The Oklahoman. A graduate of Humboldt State University in Arcata, Calif., he worked as news editor for The Associated Press in Oklahoma City before joining The Oklahoman.
+ show more


Trending Now


AROUND THE WEB

  1. 1
    Thunder No. 7 in ESPN's 'Ultimate Team Rankings'
  2. 2
    This Might Explain Why Diet Soda Drinkers Are Often Overweight
  3. 3
    PHOTO: Kevin Durant is ready for the Washington Nationals' playoff run
  4. 4
    Former Rangers manager Ron Washington: 'Not true to my wife'
  5. 5
    ‘Grey's Anatomy’ Cast Gets Prison Mean for ‘Orange Is the New Black’ Parody Photo
+ show more