by Julie Anderson
The Texas Legislature meets in a regular session every two years, convening on the second Tuesday in January of every odd-numbered year. These biennial sessions are limited to 140 days. The governor can also call additional special sessions as necessary, which cannot exceed 30 days. The 85th Texas Legislature is set to meet January 10 through May 29, 2017. Texas legislators began pre-filing bills on Nov. 14, 2016, cataloging some 350 bills on the first day alone.
With the Texas House and Senate meeting only six months every two years, thousands of bills are drafted and brought to a vote every legislative session in a very short amount of time.
The Permian Basin Petroleum Association (PBPA) keeps its membership informed and protected by tracking the hundreds of bills that could adversely affect the petroleum industry, according to PBPA President Ben Shepperd.
“Our staff frequently testifies before multiple House and Senate committees, giving a much-needed voice to our members’ interests, and in doing so keeps our state lawmakers informed on the effects their legislation would have on our industry,” Shepperd said. “Members of the Legislature appreciate hearing from industry experts on proposed legislation.”
State Sen. Kel Seliger, R-Amarillo, echoed Shepperd, saying that the oil and gas sector is rarely surprised by legislation Seliger introduces because of open and productive lines of communication.
“I ask for their input,” Seliger said of oil and gas industry representatives. “We need to know what the problems are, but what really helps are potential solutions offered by experts in the field.”
First Things First: Reauthorization of the RRC
Seliger and State Rep. Tom Craddick, R-Midland, pointed to the Sunset Review and funding of the Railroad Commission of Texas (RRC) as critical issues leading up to the 85th Session.
Throughout the year, the mission and performance of the RRC have been under review by the Legislature as required under the Texas Sunset Act. The Act provides that the Sunset Commission, comprised of legislators and public members, periodically evaluate a state agency to determine if the agency is still needed and to explore ways to ensure that the agency’s funds are well spent. Based on the recommendations of the Sunset Commission, the Texas Legislature ultimately decides whether an agency continues to operate into the future.
The Sunset review involves three steps, which have already been completed. First, Sunset Commission staff evaluated the RRC and issued a report in April 2016 recommending solutions to problems found. A month or so later, the Sunset Commission met to hear public testimony on the agency and the recommendations of the Sunset staff. Based on the public input and the Sunset staff report, the Sunset Commission adopted recommendations for the full Legislature to consider when it convenes in January 2017.
The PBPA has been monitoring the full process, and Shepperd has reviewed the reports on behalf of the PBPA.
“We support the recommendations they have made to this point,” Shepperd indicated, “including continuing the agency for another 12 years and keep the name of the agency intact.”
Once the legislative session begins, the conversation will turn to fiscal support of the RRC, Craddick stated.
“In the policy arena, the conversation will be about funding the agency,” Craddick said. “With oil and gas prices down, production down, and revenues to the state down, it will be a tight budget year overall. Funding the RRC will be a major discussion because their main source of funding is fee-based, which is inhibiting their ability to carry out their mission.”
Certainly, the oil and gas economy, being in this extended down cycle, has had a tremendous impact on state revenues, Shepperd observed.
“The cloud hanging over the entire session will be the state budget, and how do we fund all of the priorities the state needs to fund—health care, education, and all of the state agencies. The RRC’s budget is down, too,” Shepperd continued.
A couple of sessions ago, Texas lawmakers altered the funding stream of the RRC and made it more self-sufficient, relying on fees and fines and other income rather than flat, general fees. However, drilling permits are down, which means drilling permit fees are also down.
“Things of that nature have caused revenues that fund the agency to go down, and it will be a challenge,” Shepperd observed. “We strongly support a fully funded, robust Railroad Commission. We ask them to regulate this industry, and we need to make sure they have all of the tools they need to do it.”
Along with the RRC, other industry-related issues will likely include eminent domain.
“We certainly support reasonable eminent domain,” Shepperd maintained. “If there are improvements that can be made to the laws, we certainly support those.”
The Permian Basin is one of the most prolific oil- and gas-producing regions in the country, Shepperd said, “and we need to make sure we have the pipelines and infrastructure to get our products to market.
“Every time there is a debate on eminent domain, it is an interesting, challenging debate,” he added.
Allocation wells will be on the table again, Shepperd said. During the 84th Session of the Texas Legislature, the PBPA led the charge to pass an allocation well statute; ultimately, no legislation was passed. Generally speaking, the term “allocation well” refers to a horizontal well that runs beneath two or more un-pooled tracts, according to the RRC, where no production sharing agreement is in place to govern the participation of each tract in the well’s production, or there is a production sharing agreement, but the operator has not successfully signed up 65 percent of the royalty interest.
“In today’s horizontal development world, we’re eager to make sure that the law is clear with respect to horizontal drilling,” Shepperd emphasized. “We’re hopeful that we can find some common ground on that issue.”
Finally, another unitization bill has been filed by Sen. Van Taylor, R-Plano, Senate Bill 177.
“That is always a lively discussion,” Shepperd noted. The bill would allow the RRC to designate areas for drilling in which the holders of a majority of mineral rights in the area could extract oil and gas, even if a minority of the holders did not want to. The designation would be made at the request of property owners or companies that hold the leases to the mineral rights. During the 84th Session, the bill was left pending in committee.
How You Can Help
The PBPA leadership “will make every effort to keep our membership and board up to date on issues that are ongoing at the Capitol,” Shepperd affirmed.
Along with reading PBPA communications, members are invited and encouraged to participate in organized visits to Austin, including Midland/Odessa Day in February and PBPA Day in March; Shepperd said these dates are currently being set. In addition, as specific bills are filed and testimony is scheduled, the PBPA will ask members to come testify in Austin.
Those who are unable to make the trip to the Capitol can still play a valuable role in the legislative process.
“For me, the best way to have constituents contact me about their concerns is via phone or email,” Craddick suggested. “Constituents in House District 82 should contact my Austin office, where my staff keeps track of all calls on issues and makes me aware of who has called in and about what topic.
“Form letters and form emails are an easy way for constituents to communicate and promote an agenda, but not effective,” Craddick said. “I am more invested in constituents’ concerns who take the time to write me and use their own words to express their concerns about a legislative issue.”
For those who do travel to Austin to formally testify on an issue, Craddick offered the following advice:
- Everyone testifying before a committee should have visited the committee members’ offices prior to the meeting and briefed them on their position.
- Be truthful, brief, succinct, and to the point.
“After office visits, it is fair to assume everyone on the committee is informed and will know what you are testifying about,” Craddick said, “therefore a quick summary is successful, and your position is on the official record.”
Preparing to Testify Before the Legislative Committees
The Texas Association of School Boards has developed a guide to help witnesses prepare for testimony and feel comfortable in front of legislative committees, https://www.tasb.org/Legislative/Legislative-Information/documents/witness_guide.aspx. The Legislature works through a committee process to pass legislation. Committee members are selected by the presiding officer of each chamber—the House Speaker, for House matters, or the Lieutenant Governor, for the Senate.
Once a legislator files a bill, it is sent to the appropriate committee for a hearing. The committee assignment is determined by the subject matter of the bill. Each committee holds hearings on its assigned bills. Under the Open Meetings Act, legislative committees must post the issues and/or proposed bills they intend to discuss at least five days prior to a hearing. During a special session, committees must post hearing notices at least 24 hours prior to a hearing. When hearings are called from the floor of either the House or Senate, a committee must give notice at least two hours before a hearing.
Once the committee hearing has been scheduled, the legislators on the committee may request that certain witnesses testify on a bill or an issue under consideration. Additionally, the committee allocates time during the hearing for the public to provide testimony. Since legislative committee meetings and state agency hearings are open meetings, all proceedings and testimony are public record and are documented. Additionally, committee hearings are generally broadcast via the Internet.
What Happens During a Committee Hearing?
Once you arrive at a committee hearing to testify, you will be required to sign a witness affirmation form stating:
- your name;
- the organization you are representing;
- your contact information;
- the bill or issue on which you are testifying; and,
- whether you support, oppose, or wish to remain neutral on that bill or issue.
When the hearing begins, the committee chair will announce the bill number being considered and will then begin calling witnesses who have signed up to testify on the bill. When you are called up to testify, it is important to keep three things in mind:
- Begin your comments by thanking the committee.
- Limit your comments to between three to five minutes or the time limit imposed by the chair.
- Be ready to answer questions.
Finally, bring several copies of your testimony, as it is customary to provide hard copies of your testimony for each member of the committee.
Once testimony has been heard on a bill, the committee may vote on the bill, amend it, delay it for further discussion, or ask for more information. Bills delayed for discussion or voted down may reappear as another bill or an amendment to another bill, so it is advisable to monitor communications for updates on legislative and regulatory activities.
Tips for Preparing Testimony
As you develop your testimony, keep these important points in mind:
- Develop a concise message.
- Focus on three or four message points you want to emphasize. Prioritize those points and deliver the most important ones first in case there is not enough time to deliver all of them.
- Focus on local impact. Illustrate your message points with data, statistics, or a brief anecdote about how the proposed bill/issue will affect you. The point of your testimony is to tell your specific story.
- Get the facts straight. Be as accurate as possible and give credit to the source of information to increase your credibility and protect yourself if the details turn out to be incorrect.
Tips for Testifying
As you prepare to testify, keep these tips in mind:
- Build rapport.
- Acknowledge the committee members and thank them for allowing you to testify.
- Try to keep good eye contact with and address your comments directly to the members.
- Summarize points. Avoid reading written testimony. Simply summarize the key points verbally and provide copies of written testimony to all members of the committee, staff, news media, and other observers.
- Avoid repetition. Legislators often hear much boring, repetitious testimony, so make yours memorable.
- Be sincere. Be yourself. Don’t become too emotional or dramatic.
- Waive the opportunity to speak if several others have already said what you wanted to say, but remember to distribute written copies of your testimony.
- Be honest and helpful. Often, the committee members will ask questions of people who testify. Answer questions as honestly as you can. If you don’t know the answer, say so or defer to another expert.
- Avoid confrontation. If a member of the committee asks a hostile question, diffuse the hostility by remaining poised. Even if the committee seems opposed to your perspective, your testimony may earn their respect, educate those attending the hearing, and/or at least prove that opposition exists.
- Dress conservatively. You do not want to distract legislators from listening to your message. Business attire is appropriate.
At any state office building, security guards may require you to show picture identification and the contents of your belongings (i.e., your purse or briefcase) upon entering the building. Be prepared for increased security measures during the legislative session or after any national security alert.
For more information including getting around the Capitol, parking, eating, and sleeping accommodations and other important details, go to https://www.tasb.org/Legislative/Legislative-Information/documents/witness_guide.aspx.
Julie Anderson, based in Odessa, is editor of County Progress Magazine, and is well known to many readers of PBOilAndGas as the former editor of this magazine.
In a departure from past years’ coverage of the Legislature, we will publish all subsequent Legislative-session reports on our website at pboilandgasmagazine.com, rather than carrying the coverage here in the print edition(s) of the magazine. Our longer lead times necessary for getting the print editions produced and distributed mean that we can’t be as up-to-the-minute as we would wish. But with our online coverage, we can post our content immediately. So watch that site for reports in the first week of February, March, April, May, and June for Texas Legislature updates, and February and March for New Mexico updates.
Railroad Commission of Texas Sunset Review
The following is an excerpt from the Commission Decisions Report released in November 2016, and lists only those recommendations that were adopted. To view the full document, go to https://www.sunset.texas.gov/reviews-and-reports/agencies/railroad-commission-texas-rrc. The recommendations that are marked “Change in Statute” must be adopted the Texas Legislature.
Issue 1: Continue the Railroad Commission of Texas for 12 Years With a Name That Reflects the Agency’s Important Functions.
Change in Statute
Rec. 1.1, Modified Continue the Railroad Commission of Texas for 12 years, but do not change its name.
Issue 3: Oil and Gas Monitoring and Enforcement Need Improvements to Effectively Ensure Public Safety and Environmental Protection.
Change in Statute
Rec. 3.1, Adopted Require the Railroad Commission to develop a strategic plan for the Oil and Gas Division that tracks and measures the effectiveness of monitoring and enforcement.
Rec. 3.3, Adopted Direct the Railroad Commission to accurately track and report the number of oil and gas violations annually.
Rec. 3.4, Adopted Direct the Railroad Commission to systematically track major violations.
Rec. 3.5, Adopted Direct the Railroad Commission to develop a definition of repeat violations in rule and report the number of repeat violations on its website.
Rec. 3.6, Adopted Direct the Railroad Commission to audit a sample of oil and natural gas production reports and transportation reports.
Rec. 3.7, Modified Direct the Railroad Commission to develop a policy to require production reports to be filed electronically, and also direct the agency to provide oil and gas production information on its website in a format that is easier for royalty owners to use and understand.
Rec. 3.8, Adopted Direct the Railroad Commission to expand its risk matrix for oil and gas inspections.
Issue 5 Improved Oversight of Texas’ Pipeline Infrastructure Would Help Further Ensure Public Safety.
Change in Statute
Rec. 5.1, Adopted Authorize the Railroad Commission to enforce damage prevention requirements for interstate pipelines.
Rec. 5.2, Adopted Authorize the Railroad Commission to create a pipeline permit fee.
Change in Appropriations
Rec. 5.3, Adopted Modify language in the General Appropriations Act to further ensure that the Railroad Commission collects, and is appropriated back, fee amounts to offset the costs of administering its Pipeline Safety program, including administration costs.
Issue 6 The Railroad Commission’s Contracting Procedures Are Improving, but Continued Attention Is Needed.
Rec. 6.1, Adopted Direct the Railroad Commission to centralize all contract administration functions by September 1, 2016.
Rec. 6.2, Adopted Direct the Railroad Commission to implement and keep updated contracting best practices as outlined by recent legislation and the comptroller.
Rec. 6.3, Adopted Direct the Railroad Commission’s executive director to report quarterly to the commissioners at their open meetings regarding the status of contracting improvements.
Issue 7 The Railroad Commission’s Statute Does Not Reflect Standard Elements of Sunset Reviews.
Change in Statute
Rec. 7.1, Adopted Apply the Sunset across-the-board recommendation regarding alternative dispute resolution to the Railroad Commission.
Rec. 7.2, Adopted Allow the Oil and Gas Regulation and Cleanup Fund Advisory Committee to expire.
Rec. 7.3, Adopted Continue requiring the Railroad Commission to submit its report on the Oil and Gas Regulation and Cleanup Fund to the Legislature.
Adopted New Issues
Seismicity Data in Railroad Commission Rules
Direct the Railroad Commission to incorporate findings from the TexNet Seismic Monitoring Program at UT’s Bureau of Economic Geology as they become available into its oil and gas disposal well rules or guidance, as applicable. The rules should seek to prevent any induced seismicity caused by disposal wells. (Management action—non-statutory)
What are the key deadlines for the 85th Regular Session? Official deadlines will be set when the House and Senate adopt their rules, but until then, the Texas Legislative Council Drafting Manual provides the following general calendar According to the Manual:
Bill pre-filing began: Nov. 14, 2016
1st day of session: Jan. 10, 2017
60-day bill filing deadline: March 10, 2017
Adjournment sine die: May 29, 2017
Post-session 20-day deadline for governor to sign or veto: June 18, 2017
Effective date (91st day after adjournment): Aug. 28, 2017