Governor Fallin Signs Gross Production Compromise

New tax rate for first three years provides certainty and standardization for the industry

Oklahoma City (May 28, 2014) – The State Chamber of Oklahoma would like to thank Governor Mary Fallin for signing House Bill 2562 today, helping ensure Oklahoma’s economic future.  The bill, which sets a permanent, across-the-board gross production tax rate starting in July of 2015, provides certainty for one of the state’s leading job producing industries.

“Coming into this legislative session, the industry made it clear that decisions about next year’s drilling are being made this summer, so the issue needed to be addressed now,” said Fred Morgan, president and CEO of the State Chamber. “This compromise language shows how an engaged business community can lead to policies that will benefit the entire state.”

The push to address the rate this year started with a report commissioned by the State Chamber Research Foundation that shows how important the industry is to the state. It found that the industry is already the single largest contributor to state revenues at over two-billion dollars.

“Add to that the billions in royalty payments and purchases from Oklahoma companies made by the industry here and the effect on rural Oklahoma is staggering,” said Morgan. “We’d like to thank Governor Fallin, Lieutenant Governor Todd Lamb, Speaker Jeff Hickman, President Pro Tem Brian Bingman and Senator Rob Johnson for all their work getting this bill through the legislative process.”