American Oil and Gas Reporter - September 2015 - 130

ConventionSection: Arkansas Independent Producers & Royalty Owners

Arkansas Legislature Shifts
Toward Conservative
By Corinne Westeman

LITTLE ROCK, AR.-The Arkansas
Legislature is becoming more business
friendly, Arkansas Independent Producers
& Royalty Owners Association leaders
state.
According to AIPRO Executive Vice
President J. Kelly Robbins, both the state
House and Senate had Republican majorities during this year's session. He
notes that much of the legislation passed
in 2015 was noticeably more conservative,
pro-business, and pro-private property
rights, which association members will
discuss at AIPRO's annual convention,
Oct. 6-7 at Little Rock's Embassy Suites
Hotel.
"This is the first time in living memory
that the Arkansas House and Senate both
had Republican majorities," Robbins observes. "Arkansas was the last Southern
state to change from a one-party Democratic state to a one-party Republican
state. Although it was a relatively quick
transition, it didn't happen overnight.
And if it ever goes the other way, it
won't happen overnight either."
Now that Arkansas has amended its
term limits policy to allow individuals to
serve longer in the legislature, the association does not anticipate this will change
in the near future, Robbins adds.
"The general consensus is there will
not be a change in the political makeup
(of the state legislature)," he says. "The
seven constitutional offices will not be
on the ballot in 2016, because those are
four-year terms. But all 100 House seats
and 17 of the 35 Senate seats will be on
the ballot. And of course, it is a presidential
election year, which means there will be
a large turnout."
However, Robbins says political forecasters anticipate Arkansas Speaker of
the House Jeremy Gillam, R-Judsonia,
and President Pro Tempore Jonathan Dismang, R-Searcy, will retain those offices
for the 2017 session because of the change
in term limits and majorities. This could
be historic, he comments, as both offices
almost always change with each biennial
term.

Incidentally, he adds, both Gillam and
Dismang represent areas in the heart of
the Fayetteville Shale play.

Monitoring Legislation
Robbins says he believes that this
year's legislative session proved to be a
success for Arkansas' oil and natural gas
community. "Our industry and association
has a credible reputation at the Capitol,
and this wasn't created by accident or
happenstance," he continues. "This occurred through the efforts and outreach
of our members and others who work on
behalf of our community."
AIPRO President Andy Miller, senior
director of government and community
relations for Southwestern Energy in
Little Rock, remarks that the association
has worked to develop a relationship with
elected officials and agency personnel
on behalf of its members and the oil and
natural gas community. "We are especially
pleased with the opportunity to work
with more than 25 legislators who voluntarily serve on the Oil and Natural Gas
Caucus," he says.
AIPRO monitored more than 30 bills
during the 90th General Assembly. Robbins notes there were 2,105 bills and resolutions filed in the 2015 session, which
was the lowest number since the 1997
General Assembly session, which had
2,064, and was a nearly 17 percent reduction from the last biennial regular
session. Arkansas holds a fiscal session
in even-numbered years. "Because of the
historic election results last November,
there were a lot of new faces among the
legislators," Robbins describes.
Among the bills AIPRO monitored,
Robbins notes SB 801 and SB 802. Both
were supported by the association, and
eventually passed and were signed into
law.
According to Robbins, SB 801, or
Act 1125, was introduced by Senator
Jason Rapert, R-Conway, and exempts
sand and other proppants used directly
in certain manufacturing processes from
the state sales and use tax. SB 802, now
Act 1126, also was introduced by Rapert
and exempts waste water hauling services

130 THE AMERICAN OIL & GAS REPORTER

from the sales and use tax.
"Over the summer, the state refunded
about $30 million of sales tax to those
who used sand and proppants for hydraulic
fracturing," he points out.
Robbins also mentions HB 1870, introduced by Representative Warwick
Sabin, D-Little Rock, which purported
to protect the property rights of citizens
and prevent the abuse of eminent domain
by private pipeline companies. AIPRO
opposed this measure.
HB 1870 was presented in committee
and originally aimed at all pipelines, but
was amended to impact only oil pipelines.
Even so, it still did not receive enough
votes for committee approval, Robbins
notes. "HB 1870 was an overreach," Robbins says. "The regulatory entities' directors
thought it was going to require too much
unnecessary and repetitive work.
"With the more conservative legislature, we saw nine bills on private property
rights and eminent domain," Robbins
continues. "As an association representing
the industry, we see eminent domain for
gathering systems and pipelines as a necessary tool, although it is used rarely in
Arkansas. But it is a valuable tool, so we
are always cautious and concerned about
attempts to change that."
Additionally, Robbins reports, AIPRO
supported HB 1308 or Act 1057, introduced by Representative Stephen Meeks,
R-Greenbrier, which dealt with personal
property taxes. Under the new law, he
says, personal property taxes do not become delinquent and bear interest or
penalties until 30 days after final disposition of any tax appeal. Robbins says a
property owner involved in an appeal
must pay the undisputed amount of tax
to the county and the disputed amount
into an escrow account established by
the court.
Another bill supported by AIPRO,
Robbins continues, is HB 1872, which
changes the state's processing and disposition of unclaimed properties, including
abandoned and unclaimed minerals. "In
the past, producers had to hold onto unclaimed royalty payments for five years
and make annual reports; after that, they

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