CONTACT:
Jennifer Monies, Press Secretary
Oklahoma House of Representatives
Office of House Speaker Chris Benge
405-962-7679
jenniferm@okhouse.gov

OKLAHOMA CITY (Feb. 23, 2010) — House Speaker Chris Benge outlined a plan to create a state energy stabilization fund today, which aims to reduce the impact energy price volatility has on state revenue collections.

He was joined at a press conference today by Sens. Patrick Anderson and John Sparks, who have been leading the effort in the Senate.

The plan calls for an automatic collection of any gross production taxes above a simple three-year average for deposit into the fund. In years when gross production taxes collected fall below the three-year average, the fund will automatically deposit the difference into the state’s general revenue fund to help mitigate budget shortfalls.

The automatic deposits and collections will help minimize the impact of the constant fluctuations in energy prices, which often heavily influence revenue collections and the state budget.

"Wild swings in natural gas prices, and the economic ramifications of price instability, are one of the main causes of our state’s current budget shortfall," said Benge, R-Tulsa. "This fund could be a way to take volatility and uncertainty out of the equation."

The plan additionally would set aside the interest collected off the principal of the fund for enhanced energy recovery research. Recent technology, including enhanced oil recovery using carbon dioxide and hydraulic fracturing for natural gas, has helped to expand America’s domestic energy supply.

The goal would be that this investment would help Oklahoma extend its energy production for generations to come.

It is predicted Oklahoma may be sitting on untapped energy reserves because the technology to get those resources out of the ground does not yet exist. The fund would not only serve as a way to stabilize energy tax collections, but also help expand research that over time could give a boost to Oklahoma’s economy.

Many other states, including Alaska, New Mexico and Wyoming, have similar funds.

"This is a recognized solution to a source of state revenue that historically is very volatile," said Sen. Anderson, R-Enid. "We have to do a better job of getting the resources we have out of the ground, all while ensuring energy price swings do not drastically impact our budget from year to year."

According to House fiscal staff, if this fund had already been in existence it would have automatically deposited over $576 million into the state’s general revenue fund for use to help mitigate Oklahoma’s current budget shortfall.

"I think we can all agree that our state could have definitely used those funds to help us weather this economic downturn," said Sen. Sparks, D-Norman. "Passage of this legislation will help prevent depressed natural gas prices from having such a dramatic impact on Oklahoma’s budget."

The details of the plan will be considered in House Bill 3032, by Speaker Benge, in the House Appropriations and Budget Committee Wednesday. The legislation is still a work in progress, and the Speaker said he welcomes additional ideas to help stabilize energy tax collections over time.

NOTE: For accompanying video, go to http://www.okhouse.tv/ViewVideo.aspx?VideoID=234