ODNR outlines biennial budget requests, fee changes and orphan-well, H2Ohio priorities in House hearing

Mary Mertz, director of the Ohio Department of Natural Resources, testified to the House Natural Resources Committee on the agency’s operating budget request and a range of policy and fee changes during a first hearing on House Bill 96.

Director Mertz told the committee ODNR’s total biennial budget request includes large non‑GRF revenue streams and a smaller General Revenue Fund (GRF) ask: she said the agency’s GRF request is roughly $156 million for fiscal year 2026 and $175.9 million for fiscal year 2027 and characterized the overall biennial request as largely flat compared with the current biennium. She said most ODNR operations are supported by non‑GRF revenue.

Mertz outlined division-level requests and statutory or fee changes. For Parks and Watercraft she asked for authority to access one-time bonus payments from oil-and-gas leasing held in an account (about $40 million in the account, she said) and requested access to $20 million in each year of the biennium to cover capital work, law-enforcement equipment, payroll increases tied to bargaining agreements, fleet replacement and higher operating costs; she said using those bonus funds would not increase the GRF bottom line.

On watercraft registration Mertz proposed indexing fees to the Consumer Price Index starting in 2027, saying the current fee had not changed since 1994 and Ohio has about 650,000 registered watercraft. For the Division of Wildlife she requested appropriation authority for roughly $3 million from bonus funds tied to oil-and-gas activity on wildlife areas and proposed raising nonresident permit and license fees to align with neighboring states: the testimony listed example increases for nonresident fishing licenses from $49 to $74 (annual), a three‑day license from $24 to $50 and a one‑day license from $13 to $26; nonresident deer permits were listed to rise from $74 to $210.

Mertz requested a $750,000 GRF increase for the Division of Water Resources Management to hire engineers and buy monitoring equipment to expand groundwater and surface-water analysis; she also told the committee ODNR would propose a modest new fee for registration of major water withdrawals (threshold: withdrawals above 100,000 gallons per day) to help cover program costs and said the fee revenue would be modest (under $500,000 by her estimate).

On forestry, Mertz highlighted reestablishing the Buckeye State Tree Nursery in Zanesville and said the division expects eventual production of “a couple million seedlings a year.” For oil and gas resources management she described the division as non‑GRF funded and said the department had increased appropriation by about 3.4% to support permitting, inspections and an expanded orphan‑well plugging program. She said ODNR’s documented inventory filed with the federal government listed about 20,000 orphan wells but that the number could be higher; the department’s current annual plugging goal she set at 500 wells.

Mertz said the department proposes to increase the geological survey share of oil‑and‑gas severance revenues from 10% to 16% (not a change to the severance tax rate itself) to stabilize the geologic survey’s funding. She said the current balance in the severance tax fund is roughly $239 million and that ODNR does not expect the modest reallocation to impede orphan‑well plugging or oil-and-gas operations in the near term.

Committee members pressed Mertz on the source and security of federal grant funding for methane‐reduction and orphan‑well programs. Mertz said some federal grant awards are undergoing administrative review at the U.S. Environmental Protection Agency and that the department was awaiting final decisions; she described the grants as important but subject to federal review timelines. On inquiries about contracting for plugging work, Chief Eric Bridal (chief, Division of Oil and Gas Resources Management) said contractors are qualified under state contracting rules and that ODNR had 46 plugging contractors registered and had seen roughly 42 rigs working in recent months; Bridal said the department follows state contracting procedures.

Representative questions also covered H2Ohio (the governor’s water-quality initiative). Mertz described H2Ohio funding as allocated across three agencies: Ohio Department of Agriculture (largest share, agricultural best management practices), ODNR (wetlands, rivers and natural infrastructure) and Ohio EPA (infrastructure such as lead service-line work). She said ODNR’s request for H2Ohio was focused on wetlands and rivers work and that the agency sought flat funding to continue existing efforts (more than 200 wetland projects and thousands of acres restored, she said).

Committee members asked about several additional details, including (1) how lowering the senior license age on HB64 would affect federal matching dollars (ODNR estimated $250,000–$300,000 annual impact); (2) whether some grant funding might be at risk because of federal administrative reviews (Mertz said reviews are ongoing and timing is uncertain); and (3) how royalty and bonus payments from state land leases would be handled (Mertz said only one well on state land has been drilled and is not yet producing; royalties would flow into a designated fund and require legislative appropriation for spending).

No votes or final actions were taken on House Bill 96 at the hearing; the session consisted of department testimony and committee questions.