MT bills alive and deadWhat’s ahead going into the second half of Montana’s 64th legislative session Mike Ellerd Petroleum News Bakken
The transmittal deadline for all general bills in the 64th Montana legislative session was Feb. 27 and a clearer picture emerged of the oil and gas industry-related bills making it into the second half of the session. Clearer yet is the picture of those bills that didn’t make it through the first half of the session.
Unlike North Dakota where all bills get an up or down vote in the chamber in which they were introduced regardless of committee action, in Montana, bills can get “tabled” in committee, which essentially kills the legislation - at that point they can only be revived by a motion to reconsider, which rarely happens.
Petroleum News Bakken took a look at some of the more important industry-related bills that are still alive in the session as well as some of those that are more than likely dead.
Infrastructure spending House Bill 5, Gov. Bullock’s “Build Montana” bill, called for $391 million in infrastructure spending, $45 million of which was earmarked for oil-impacted communities in eastern Montana. The money would come from a combination of cash and bonds, and also contained appropriations that in previous legislative sessions had been covered in separate bills. Republicans objected to the bonding component of the bill as well as the multiple appropriations and split the various infrastructure appropriations into six separate bills. Because they deal with appropriations, the six bills did not have to meet the transmittal deadline and are still alive.
At the same time, House Speaker Austin Knudsen introduced his own bill providing relief to oil-impacted communities. That bill, HB 402, calls for $55 million in grants to local governments in oil-impacted areas of eastern counties with the money to come directly from the general fund. The bill passed the House with minor revisions and moves on to the Senate.
Sage grouse management In an effort to avoid the federal government listing the greater sage grouse as a threatened or endangered species, legislation has been introduced that would implement a sage grouse management program within the Department of Fish, Wildlife and Parks. The management program in Senate Bill 261 is modeled after a similar program that Wyoming has already implemented. However, while SB 261 details the program, it does not contain any funding provisions - funding for the programs is included in HB 2, the state’s general appropriations bill. SB 261 passed the Senate with some amendments and moves to the House. HB 2 is still in the House Appropriations Committee.
Taxation SB 374 would eliminate a drilling incentive trigger that lowers tax rates on wells drilled after Dec. 31, 2015, when the average price of West Texas Intermediate falls below $52.92 for a calendar quarter or the average Henry Hub natural gas price falls below $5 per million British thermal units. Because it is a revenue bill, it did not have to meet the transmittal deadline and the bill remains in the Senate Taxation Committee.
Two bills would increase production taxes, and since both are revenue bills, neither had to meet the transmittal deadline. HB 420 calls for an increase in the drilling incentive production tax rate and directs a portion of the generated revenue to oil-impacted communities. HB 591 would change the timing of the periods when reduced tax rates apply. Both bills are being heard in the House Taxation Committee.
Water quality Provisions in SB 325 prevent the state’s board of environmental review from implementing water quality standards that are more stringent than natural background conditions for non-anthropogenic sources except in certain cases. The bill passed the Senate and moves to the House.
Under SB 368, the Department of Environmental Quality would be required to compile and maintain a current publicly available database on all pipelines of 8-inch diameter or greater that cross navigable waters in the state. The bill, which comes on the heels of the Bridger Pipeline release under the Yellowstone River near Glendive in January, was passed by the Senate on a 48-2 vote and now goes to the House.
Waste management HB 136 defines “remediation waste” in regard to cleanup of hazardous waste sites and limits hazardous waste generator fees to $25,000. An amended version of the bill passed the Senate on a unanimous vote.
Oil and gas trust fund HB 310 calls for a constitutional amendment to be put to the voters that would establish a permanent oil and gas trust fund that would be funded from oil and gas production taxes. Beginning in 2018, 5 percent of the state and county production taxes would be diverted into the fund. For each of the next five years, the contribution would increase 5 percent reaching a maximum of 30 percent in 2023. From 2023 on, the fund would receive 30 percent of the production tax into perpetuity. That bill is still alive having passed the House Taxation Committee on a close vote of 11-9. Since the bill calls for a constitutional amendment, it requires a three-quarters majority vote in each house.
Keystone XL Although it has no teeth, and now it’s common knowledge that President Obama vetoed the federal legislation, House Joint Resolution 11 urges prompt congressional and presidential approval of the Keystone XL pipeline project. The resolution passed third reading in the House on Feb. 18 on a 71-28 vote and was transmitted to the Senate. However, that was before the President’s Feb. 24 veto.
Dead bills – probably A number of bills were introduced that would have increased the level of state regulation of oil and gas operations that were tabled in committee.
SB 172 would have established pre-drilling water quality standards; SB 177 called for 1,000-foot setbacks between wells and surface water bodies; HB 243 would have required public disclosure of fracturing fluid compositions as well as 45-day notification of property owners within 3,000 feet of a well to be fractured; and HB 253 called for a prohibition on reserve pits for disposal of drilling fluids and instead would have required the use of closed-loop systems.
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