American Oil and Gas Reporter - May 2015 - 37

CIPA Opposes Bills Affecting DOGGR

SACRAMENTO, CA.-Among the
roughly two dozen bills directly pertinent
to the oil and gas industry in the 2015 California State Assembly, a trio dealing with
underground injection control and the mission of California's Division of Oil, Gas
& Geothermal Resources have drawn particular opposition from the California Independent Petroleum Association.
According to CIPA Director of Government Affairs P. Anthony Thomas, AB
356 by Representative Das Williams, DSanta Barbara, would require DOGGR
to hold a public hearing before proposing
an aquifer exemption for oil and gas
companies to the U.S. Environmental
Protection Agency. CIPA says Williams
claims that 2,500 injection wells are operating in nonexempt aquifers and are
failing to protect groundwater that may
be used for drinking water or other beneficial uses. The legislation also seeks to

establish monitoring requirements for
possible freshwater aquifer degradation,
Thomas says, despite the fact that California already created such a program in
2013. "In our view, AB 356 is worthless,"
he comments. "We see it as an unnecessary
bill that will cause production delays and
create unnecessary bureaucracy."
Nevertheless, Thomas predicted in
early April that the bill would pass out of
committee. "We think it will be headed
to a floor fight," he predicts.
CIPA also opposes SB 248 by Senator
Fran Pavley, D-Los Angeles. According
to Thomas, the legislation purports to reform DOGGR's underground injection
control program. He says CIPA objects
to provisions dealing with well integrity,
comment periods for project approval letters, and geologic and hydraulic characterizations at injection well sites, he says.
"DOGGR already maintains well in-

tegrity requirements," Thomas points out.
"Project approval letters are subject to
public comment. Geologic and hydraulic
characterizations are conducted as well.
We think this bill is an overreach, and
that current law and DOGGR responsibilities make it unnecessary."
He adds that CIPA also is urging lawmakers to defeat SB 545 by Senator Hannah-Beth Jackson, D-Santa Barbara. Although it is characterized as proposing a
new permitting process, Thomas indicates
the bill essentially aims to change DOGGR's mission and reshape it into an environmental agency.
"This is DOGGR's 100th anniversary,
and it always has been responsible for
overseeing the drilling, operation, maintenance, and abandonment of wells," he
reflects. "This is simply another unnecessary bill we have to fight."
Ì
See story page 135

Kansas Legislators Study Tax Options
TOPEKA, KS.-Kansas legislators continue to wrestle with a $400 million state
budget gap, and Edward Cross, president
of the Kansas Independent Oil & Gas
Association, says he thinks they are likely
to increase sales taxes as part of filling
that hole.
Kansas legislators adjourned their regular
session April 2 and returned April 29 for a
veto session that could last as long as 30
days. Cross says the veto session usually
focuses on budget and tax issues. Despite
the restrictions, Cross warns the longer
legislators are in the statehouse, the greater
chances are for new issues to emerge.
Both the Kansas House and Senate
worked on a budget bill, but only the
latter passed one during the regular session.

Cross says budget work was delayed
until the Consensus Estimating Group
released its fiscal projections for fiscal
years 2015, 2016 and 2017.
The group estimates tax receipts in
FY 2016 will be almost $100 million below previous estimates, leading to a total
shortfall for the year of $242 million,
state budget documents say.
"The House and Senate tax committees
heard a number of tax proposals before
the end of the regular session so they
would have several tax options available
to fund spending priorities once a budget
was produced," Cross says.
Sales Taxes
Speaking prior to the start of Kansas'

veto session, Cross suggested Governor
Sam Brownback was likely to favor
raising revenues through consumption
taxes rather than income taxes. The governor has proposed increasing alcohol
and tobacco taxes, which projections say
could raise $200 million.
Another proposal being discussed by
legislators would increase the Kansas
sales tax to 6.3 percent from 6.15 percent,
which Cross says would raise about $70
million. Other legislators have called for
jumping the sales tax to 6.5 or 6.7 percent,
he says.
Another available revenue option is
modifying Brownback's small business
tax cut of 2012, Cross says. Income from
small businesses is exempt if it is reported

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American Oil and Gas Reporter - May 2015

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