American Oil and Gas Reporter - June 2016 - 102

ConventionCoverage: Kansas Independent Oil & Gas Association

Edward Cross, president of the Kansas Independent Oil & Gas Association, provides a
legislative and regulatory roundup during KIOGA's midyear meeting, held April 20-22 in
Great Bend. Cross reported the association tracked 19 issues in the Kansas Legislature
that had possible impacts on producers during the 2016 session.

Group's latest projection for the remainder
of this year and next projects the state
will be short $140 million for the fiscal
year that ends June 30, and foresees another $151 million shortfall for FY 2017,
he said. To meet the deficit, Cross added,
Brownback has said policymakers may
opt to:
* Delay highway projects and move
$185 million from the Kansas Department
of Transportation's budget to the general
fund;
* Delay the state's $99 million payment to the Kansas Public Employees
Retirement System and continue a $17
million reduction to the state university
system; or
* Ask the legislature to sell $15 million of future annual tobacco company
payouts in exchange for a one-time $158
million payment.
The Kansas Supreme Court's pending
decision on whether the state is meeting
its constitutional mandates regarding
public school funding added to the state's
fiscal uncertainties, Cross indicated.
Cross said he testified on a number of
legislative proposals, including a bill to
change the annual appraisal process for
property taxes to a two-year cycle and
prohibit appraisers from taking matters
under consideration after Jan. 1. He expressed KIOGA's opposition to both provisions, and they were removed from the
bill, he said.

In other statehouse testimony, Cross
said the association opposed a bill that
would limit information used to establish
a fair market value for producing oil and
gas leases.
"I consulted with many of our producers, tax experts and attorneys, and we
offered an amendment that if production
began before Oct. 1, then an operator
could use production information through
April 1 of the year being assessed. If
production began after Oct. 1, he would
use production information through July
1. The bill now is in the veto session," he
reported on April 21.

102 THE AMERICAN OIL & GAS REPORTER

Federal Concerns
Turning to federal issues, Cross called
President Obama's fiscal 2017 budget
proposal disappointing, with its eighth
consecutive call to repeal tax deductions
for percentage depletion and intangible
drilling costs. The president also sought
a consumer energy tax of $10.25 per
barrel of oil that he tried to disguise as
an oil company fee, Cross added.
"That tax would touch all sectors of
the economy and households that rely on
oil products," Cross said. "It really demonstrates how out of touch the president's
budget is with hardworking men and
women who are trying to get ahead. We
need policies that help us grow the economy and create jobs."
The oil tax proposal faces an uphill
battle, he assessed, with Congress already
promising not to consider such a measure.
Other energy bills on Capitol Hill
offer a more positive message for the oil
and gas community, Cross said. The U.S.
House of Representatives passed a broad
energy policy reform package in December, and the Senate approved an energy
package in April that was introduced by
Senators Lisa Murkowski, R-Ak., and
Maria Cantwell, D-Wa.
KIOGA threw its support behind a
bill introduced by Representative Lynn
Jenkins, R-Ks., that proposes to suspend
the net income limitation on percentage
depletion, Cross revealed, noting the provision expired at the end of 2011. "There
are few initiatives I can think of that are
more important than this. KIOGA joined
a letter by the National Stripper Well As-

Members of the Kansas Independent Oil & Gas Association visit the exhibitors at the
trade show that was part of the association's midyear meeting. The trade show was held
at the Great Bend Expo Complex.
American Oil and Gas Reporter - June 2016

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