American Oil and Gas Reporter - August 2017 - 99

ConventionSection: Kansas Independent Oil & Gas Association
committees met with KIOGA, and we
went over the issue with the cooperatives,"
Cross relates. "The two legislators said
the association had to continue to work
with the cooperatives to avoid any legislation in the 2018 session that neither
party was likely to like. Those proposals
still are before the electric cooperatives,
and KIOGA still is waiting to hear back."

If the cooperatives fail to respond,
Cross says the association's next step
likely will be asking legislators to get involved in the negotiations. He adds that
KIOGA is very interested in avoiding
too much legislative involvement.
The ongoing conversations with the
electric cooperatives come amid some
indications of renewed activity, Cross

points out.
"I have talked with several people who
are drilling wells in Kansas who had not
drilled in a couple years," he notes. "It is a
good sign that there is some industry
activity going on, even if it is modest at
best. There is not a lot of unconventional
production in Kansas, like you see in other
parts of the country."
r

Kansas Tax Picture Remains Uncertain
MISSION, KS.-No one likes uncertainty,
especially those in the oil and gas industry.
Yet, Kansas operators remain unsure what
their tax obligations will turn out to be
once state legislators learn whether the
budget they crafted satisfies a court mandate
to adequately fund public education.
Nick Powell, chairman of the Kansas
Independent Oil & Gas Association, says
the state may need to find additional revenue sources if the Kansas Supreme Court
rules a proposed school funding plan is
unconstitutional.
According to media reports, the court
will accept the state's school-funding
plan, which provides an additional $293
million over two years, while it continues
to deliberate a 2010 lawsuit that alleges
education funding is inadequate. Governor
Sam Brownback signed legislation that
supplements the state's $4 billion school
budget on June 15.
"The court may make legislators start
looking for more money," assesses Powell,
president of Colt Energy in Mission. "I
guess the silver lining with low oil prices
is that state legislators know the oil and
gas industry-like agriculture-is hurting
and is not a good place to try to pull

more money from."
Oil and gas companies that operate as
limited-liability corporations or as sole
proprietors were impacted by the income
tax increase approved by the Kansas Legislature, notes KIOGA President Edward
Cross, who adds "While oil and gas operators were not necessarily happy that
the tax increase was the only option legislators considered-and not spending
cuts-at least the industry was not specifically targeted."
Looking ahead to the 2018 statehouse
session, Cross says because it is an election
year, legislators are unlikely to have any
interest in further tax increases. He points
out that was one reason they made the
2017 tax provisions retroactive to Jan. 1,
instead of implementing them next January. "Some people are saying the 2017
tax increase is hard to run against, so we
could see the House and Senate become
more conservative again," he predicts.
"It is way early to be making predictions,
but we will see if that has an impact on
the 2018 elections."
Cross adds KIOGA will be watching
regulatory developments closely, particularly those involving abandoned wells.

WESTERN KANSAS
SOUTHERN NEBRASKA

Drilling Company, Inc.
WICHITA, KANSAS

EASTERN COLORADO
OKLAHOMA PANHANDLE

12 Drilling Rigs
to depth of 8,500 ft.

For contract information contact:

Blaine Miller
Drilling Manager

316-858-8607 (Direct)
316-267-3241 (Main)
250 N. Water, Ste 300
Wichita, KS 67202

Surface Rights
KIOGA continues to monitor legislative
attempts to redefine the rights of surface
owners, Powell says. He notes that HB
2189, which was introduced in the 2017
session by Representative John Wilson,
D-Lawrence, mirrors property rights bills
authored by Senator Tom Holland, DBaldwin City, the three previous years.
HB 2189 would have prohibited drilling
within 500 feet of certain structures and
required the Kansas Corporation Com-

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Working Together
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AUGUST 2017 99



Table of Contents for the Digital Edition of American Oil and Gas Reporter - August 2017

Contents
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