American Oil and Gas Reporter - May 2018 - 36

State Legislative Reports

Successful Bills Unusual In Wyoming
CASPER, WY.-In the pages of a Petroleum Association of Wyoming weekly
legislative report, red type signifies a bill
is dead for the session. This year, reports
about legislation pertinent to Wyoming's
oil and gas industry were typified by a
dominant color, observes PAW President
Bruce Hinchey.
"There is a lot of red on those sheets,"
he observes.
Although the defeats include a couple
bills the association supported, Hinchey
acknowledges, it also accounts for a number of initiatives for which PAW will
shed no tears. The hasty death of a handful
of tax bills shortly before the session's
outset was instructive, he suggests.
Those proposals, crafted during the
summer by the Joint Interim Revenue
Committee, hiked taxes on hospitality
and leisure activities, and included increases to Wyoming's sales and property
taxes. The bills were proffered to achieve
higher education spending, which is favored by Wyoming House Speaker Steve
Harshman, R-Casper, Hinchey relates.
"The Joint Interim Revenue Committee
worked all summer on tax scenarios," he
recounts. "It held a meeting on those
bills in January prior to the session-
which I have never seen-and nobody
would vote for them. Knowing the Senate
was going to kill the bills, committee
members did not want to go on record as
voting for tax increases, so none of them
showed up during the session. That put
out the fire for any new taxes and set the
stage for the rest of the session."
That mostly was fine with PAW,
Hinchey suggests, pointing to a gross receipts tax proposal that also surfaced.
"Only a handful of states have anything
like it. I did not even know what that was
until I learned about it in a committee
hearing," he recalls. "Since it taxes a
product every time it changes hands, it
becomes a tax on top of a tax and would
be a nightmare for our industry-and any
industry that buys and sells products. We
fought that pretty hard and it went
nowhere."
While the tax increases failed, the same
was true of tax relief bills. Hinchey mentions
the example of SF 98, which sought to
cut Wyoming's severance tax from 6 to 3
percent. The bill's initial language would
have done so for a well's first 24 months,
but the iteration that passed the state Senate
moved that window to a well's 25th through
48th months. However, he reports, the
36 THE AMERICAN OIL & GAS REPORTER

legislation fell short of clearing the House
Revenue Committee.
"That was by Senator Drew Perkins,
R-Casper," Hinchey relates. "We talked
about it last summer, but we did not
know he was going to propose the bill
until it showed up. I told him I wished
we would have known about it, because
we would have helped him with the bill
before the session."
ACLU Opposition
Another piece of legislation that PAW
supported, but which fell short of enactment, was SF 74, which dealt with crimes
against critical infrastructure. Hinchey
suggests the legislation seemed worthwhile
in a geographically large state with a relatively small population and many remote
areas that contain infrastructure such as
compressor stations and pipelines.
"We could be ripe for people to deliberately damage facilities and disrupt the
supply of natural gas and oil," he considers.
"Some people made it out as if it was
PAW's bill, but it was not. We simply
jumped on board what we considered a
good idea."
SF 74 was patterned after an Oklahoma
law, Hinchey explains, and dealt with
people who deliberately damaged infrastructure, including bridges, power plants,
gas transmission lines, oil pipelines, refineries, or even communications equipment. According to PAW, the legislation
would have created the crimes of trespassing
on and impeding critical infrastructure, as
well as specified the pertinent elements
and definitions, and provided penalties.
SF 74 drew support from the telecommunications industry as well as the state's
stock growers, agriculture and mining
groups, and sailed through the Senate,
Hinchey reveals. However, even though
it eventually passed the House, he says,
it encountered opposition that largely
originated from claims by the American
Civil Liberties Union that the legislation
suppressed citizens' rights, including free
speech. "I never knew destroying property
was free speech," Hinchey quips.
Nevertheless, the opposition made it
necessary to amend the legislation in a
number of ways, which apparently contributed to Governor Matt Mead's decision
to veto it, Hinchey suggests. "The governor
said it needed more work and should go
back to interim," he says. "The Senate
voted to override the veto, but it needed
five more votes in the House."

Workers' Comp
Not all legislation proposed in 2018
failed. Bills supported by PAW that
became law include HB 10, dealing with
extraterritorial reciprocity on the matter
of workers' compensation. Hinchey says
the legislation originated with the fact
that Colorado has not recognized
Wyoming's workers' comp system.
"Trucks moving products across the border
from the refinery in Cheyenne, Wy., to
Colorado had to buy a second set of
workers' comp insurance," he relates.
"This should correct that."
Hinchey says PAW also is pleased
that HB 72, an ad valorem tax collection
bill, has been signed into law. A PAW
summary indicates that under HB 72, a
county may deduct extraordinary costs-
including court costs and legal fees-to
collect taxes prior to distributing the tax,
provided a county shall not be liable for
the uncollected amounts from a nonpaying
taxpayer. A county unable to collect some
or all of the tax due because of a taxpayer
bankruptcy or otherwise is not liable to
any other governmental entity for any
amount of the uncollected tax.
"Although it does not really affect us-
it has happened more with coal mines-I
think it is a smart idea," Hinchey assesses.
"Some school districts had sued, wanting
the full amount of the tax, and yet the
county fought to get the money on unpaid
taxes. This says it should be possible to
subtract that and calculate everyone's
percentage. It was a pretty good bill and
passed easily."
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International Western
Acquires Texas Leases
IRVING, TX.-International Western
Petroleum Inc. has acquired oil and gas
producing properties in the Texas counties
of Jack and Palo Pinto. The company
says it has paid $1.6 million for 11 leases
totaling 18 wells, with a combined span
of 2,790 acres.
"With these wells ranging from 4,000
to 5,000 feet in depth, the company's
studies show a strong reserve of both oil
and gas," International Western Petroleum
says. "The current production rate is very
positive; in addition, there is great upside
potential after performing completion
methods in the formations, and also other
hydrocarbon formations that have not yet
been produced."
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American Oil and Gas Reporter - May 2018

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