American Oil and Gas Reporter - February 2017 - 78

ConventionSection: Texas Independent Producers & Royalty Owners
that could retire tomorrow."
"That is a real challenge for us," Craddick
is quoted. "As the industry begins to tick
up, (operators) will want their permits on
time, and we need to continue doing our
inspections and protecting the environment.
Additional dollars are important."
Budgetary Challenges
According to Gilmer, the 85th Texas
Legislature may run long and include
plenty of drama. "If this session shapes
up like the rumors have it, the end will
be extended once or twice," he suggests.
"Fortunately, the politicians will be busy
working on other issues and not trying to
strangle the oil and gas business."
He credits TIPRO staff for anticipating
problems in the Capitol and identifying
issues before a situation turns critical. "They
let the Board of Directors know what is
coming," Gilmer praises. "I believe we have
the best government affairs team in Austin."
As the session got under way in January, he indicated TIPRO detected no bills
that caused immediate heartburn. "Of
course, the devil is in the details," he acknowledged.
With Republicans controlling twothirds majorities in both chambers, some
media reports claim significant differences
of opinion about priorities among legislative
leadership. However, even as press accounts
dwell on hot-button issues, lawmakers
still must perform the more fundamental
task of passing a budget. On the eve of
the session, State Comptroller Glenn Hegar
released a forecast that cut 2.7 percent
from the amount of revenue with which
legislators have to work.
According to Hegar, Texans can expect
the state's economy to expand at a slowto-moderate rate during the next biennium,
but lawmakers will have fewer dollars
than the 2015 Legislature estimated. The
next two-year budget must be capped at
$104.8 billion, down from a forecast of
$107.7 billion in 2015.
The revenue estimate does not account
for the state's entire budget, Hegar notes.
It does, however, limit the general fund
monies available for legislative appropriations and makes up about half the
total. When combined with federal funds
and other revenue streams, the comptroller
projects the state's total budget will be
$224.8 billion for the 2018-19 biennium,
which begins in September. He adds that
the state's Rainy Day Fund, which is derived primarily from oil and gas production
taxes, will stand at $11.9 billion after the
78 THE AMERICAN OIL & GAS REPORTER

next biennium, if the legislature does not
tap into it.
According to a policy think tank in
Austin, costs of existing programs and
services will exceed the session's spending
plan by $4 billion. Press accounts cite
Representative Drew Darby, R-San Angelo, as saying some belt-tightening is
inevitable. "There obviously are going
to be cuts to the budget," Darby is quoted.
"We are just going to have to figure out
where those cuts are going to come."

TIPRO Annual Meeting
Austin, Tx.
Monday, Feb. 27
1 p.m. Welcome Address, Sheraton Austin
Hotel at the Capitol
TIPRO Chairman Allen Gilmer,
1:30 p.m. Texas Railroad Commissioner
Wayne Christian
2:15 p.m. Energy Market Update, Vika
Swivedi, Macquarie Capital (USA)
3 p.m. Break
3:15 p.m. Executive Panel: "Strategies &
Opportunities for Texas' Top Shale
Plays," Eagle Ford Shale-T.M. "Mitch"
Little, Marathon Oil; Permian Basin-
Thomas Meneley, Plantation Petroleum;
Barnet Shale/Austin Chalk/Anadarko-
Jud Walker, EnerVest Operating Co.
5 p.m. TIPRO Legislative Reception

Tuesday, Feb. 28
8 a.m. Registration Opens, Sheraton Austin
Hotel at the Capitol
8 a.m. TIPRO Membership Breakfast
Speaker: Texas Railroad Commission
Executive Director Kimberly Corley
9 a.m. Oil and Gas Regulatory Update,
Suzanne Murray, Haynes & Boone
LLP
10 a.m. Texas Political Outlook Panel:
Harvey Kronberg, Quorum Report;
Scott Braddock, Quorum Report
10:45 a.m. Break
11 a.m. Information Session on TIPRO
Capitol Call-Up Meetings
Noon BBQ Luncheon, Saengerrunde Hall,
Austin
2 p.m. TIPRO Capitol Call-Up Meetings
6 p.m. Chairman's Reception and Dinner
Presentation: "Tip of the Hat!" Award
Presentation to former Texas Railroad
Commissioner David Porter

Wednesday, March 1
9 a.m. Audit Committee Meeting
10 a.m. Board of Directors Meeting

Local Authority
With its biennial schedule and large
population, Texas sees an average of
6,000 bills filed during a legislative
session, TIPRO notes. One published report indicated that between the early
filing date in mid-November and the session's first week in January, 1,300 bills
were dropped into the hopper.
TIPRO Director of Government and
Regulatory Affairs Lindsey Miller observes
that the association must sift through
those for proposals that can impact the
oil and gas industry. "We track more than
300 bills in most sessions," she reports.
"Of those, we prioritize the ones that
need action and follow them closely."
Gilmer says he does not expect many
bills targeting the oil and gas industry,
but expresses concern about possible
threats to some of the industry's progress
in the past two sessions at restricting
local control initiatives. "Passage of HB
40 in the last session was a big win for
industry and mineral owners," he assesses.
"We have to defend mineral owners'
property rights and prevent these unilateral
takings by municipalities."
Known as a "ban on bans," HB 40
passed in 2015 after Denton, Tx., enacted
a ban on hydraulic fracturing. The new
law prohibits such local bans as well as
other oil and gas restrictions deemed
commercially unreasonable (AOGR, June
2015, pg. 30).
Denton repealed its fracturing ban after
HB 40 became law. Media statements
made by the city's mayor cited a desire to
avoid lengthy and expensive legal fights.
Reasons For Hope
TIPRO leaders are expressing optimism
that the new administration of President
Donald Trump will provide relief for
what they consider operators' ever-increasing federal regulatory burden. "These
(methane) information requests the Environmental Protection Agency is sending
operators are a good example," Gilmer
cites. "The amount of time it takes to fill
out information that the EPA has ready
access to is ridiculous."
According to Longanecker, many in
the industry expressed relief and satisfaction as Trump named his cabinet nominees in the weeks following the November
2016 election. "Our industry has been
inundated with regulatory burdens for
the last eight years," Longanecker describes. "Trump's picks for the Department
of Interior and EPA show he understands

American Oil and Gas Reporter - February 2017

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