Agriculture, Forestry & Economic Development - Senate
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Bills discussed (16)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
HB1680
Act 811
· 6 mentions in agenda, chapter, transcript
Matched: “…THE STATE ACTION POULTRY FLOCK DEPOPULATION GRANT PROGRAM. HB1680 Vaught TO PREVENT A FOREIGN-PARTY-CONTROLLED BUSINESS FROM…”
|
TO PREVENT A FOREIGN-PARTY-CONTROLLED BUSINESS FROM LEASING LAND; AND TO PROHIBIT A PROHIBITED FOREIGN PARTY … | Vaught | Notification that HB1680 is now Act 811 |
|
HB1852
· 5 mentions in chapter, agenda, transcript
Matched: “HB1852 Moore TO ESTABLISH A RIGHT TO REPAIR FOR CERTAIN AGRICULTUR…”
|
TO ESTABLISH A RIGHT TO REPAIR FOR CERTAIN AGRICULTURAL EQUIPMENT. | J. Moore | Died in Senate Committee at Sine Die adjournment. |
|
HB1562
Act 941
· 4 mentions in chapter, agenda, transcript
Matched: “HB1562 Gazaway CONCERNING THE TERMINATION OF AN ORAL LEASE OF FARM…”
|
CONCERNING THE TERMINATION OF AN ORAL LEASE OF FARMLANDS; AND TO AMEND THE LAW CONCERNING … | Gazaway | Notification that HB1562 is now Act 941 |
|
HB1827
Act 817
· 4 mentions in agenda, chapter, transcript
Matched: “…EAL PROPERTY OR AGRICULTURAL LAND IN CERTAIN CIRCUMSTANCES. HB1827 Wardlaw TO AMEND THE ARKANSAS HUNTING HERITAGE PROTECTION A…”
|
TO AMEND THE ARKANSAS HUNTING HERITAGE PROTECTION ACT. | Wardlaw | Notification that HB1827 is now Act 817 |
|
HB1923
Act 838
· 4 mentions in chapter, transcript, agenda
Matched: “HB1923 Maddox TO AMEND THE ARKANSAS TOURISM DEVELOPMENT ACT; AND T…”
|
TO AMEND THE ARKANSAS TOURISM DEVELOPMENT ACT; AND TO AMEND THE LAW CONCERNING NATURAL STATE … | Maddox | Notification that HB1923 is now Act 838 |
|
HB1928
Act 820
· 4 mentions in chapter, transcript, agenda
Matched: “HB1928 M. Brown TO AMEND THE ARKANSAS SOIL NUTRIENT APPLICATION AN…”
|
TO AMEND THE ARKANSAS SOIL NUTRIENT APPLICATION AND POULTRY LITTER UTILIZATION ACT. | M. Brown | Notification that HB1928 is now Act 820 |
|
HB1656
Act 1024
· 2 mentions in agenda, chapter
Matched: “…Jr Sen. Jamie Scott REGULAR AGENDA Number Sponsor Subtitle HB1656 Beck TO AMEND THE LAW REGARDING OIL AND GAS PRODUCTION AND…”
|
TO AMEND THE LAW REGARDING OIL AND GAS PRODUCTION AND CONSERVATION. | Beck | Notification that HB1656 is now Act 1024 |
|
HB1856
· 2 mentions in transcript
Matched: “Are you in the room? Anyone here to run House Bill 1856. none, uh, House Bill 1923 Representative Maddox. none Mr.…”
|
TO AMEND THE LAW CONCERNING THE STATE BOARD OF EMBALMERS, FUNERAL DIRECTORS, CEMETERIES, AND BURIAL … | Ennett | WITHDRAWN BY AUTHOR |
|
HB1149
· 1 mention in agenda
Matched: “…; AND TO PRESERVE TIMBER AT THE PINE TREE RESEARCH STATION. HB1149 Vaught CONCERNING VEGETABLE GARDEN PROTECTION. Notice: Sile…”
|
CONCERNING VEGETABLE GARDEN PROTECTION. | Vaught | Died in Senate Committee at Sine Die adjournment. |
|
HB1855
Act 818
· 1 mention in chapter
Matched: “HB1855 Ennett TO AMEND THE LAWS CONCERNING THE POWERS AND DUTIES O…”
|
TO AMEND THE LAWS CONCERNING THE POWERS AND DUTIES OF THE DEPARTMENT OF AGRICULTURE AND … | Ennett | Notification that HB1855 is now Act 818 |
|
SB281
· 1 mention in agenda
Matched: “…estrictions designating areas as 'Members and Staff Only'. SB281 Gilmore TO AMEND THE LAW REGARDING AGRICULTURE; TO ESTABLIS…”
|
TO AMEND THE LAW REGARDING AGRICULTURE; TO ESTABLISH THE PRODUCER BILL OF RIGHTS FOR COMMODITY … | Gilmore | Died in Senate Committee at Sine Die adjournment. |
|
SB455
· 1 mention in agenda
Matched: “…IRE CERTAIN ACTIONS RELATED TO COMMODITY CHECKOFF PROGRAMS. SB455 J. Bryant TO ALLOW REGULATION OF HEMP PRODUCTS BY ARKANSAS…”
|
TO ALLOW REGULATION OF HEMP PRODUCTS BY ARKANSAS TOBACCO CONTROL; AND TO AMEND THE UNIFORM … | J. Bryant | Died in Senate Committee at Sine Die adjournment. |
|
SB466
· 1 mention in agenda
Matched: “…EMOVE CERTAIN SUBSTANCES THAT ARE DEFINED AS HEMP PRODUCTS. SB466 J. Dismang TO PLACE A MORATORIUM ON CERTAIN HEIGHTS OF WIND…”
|
TO PLACE A MORATORIUM ON CERTAIN HEIGHTS OF WIND POWER DEVICES; TO REQUIRE THE ARKANSAS … | J. Dismang | Died in Senate Committee at Sine Die adjournment. |
|
SB582
· 1 mention in agenda
Matched: “…NDS; AND TO AMEND THE LAW CONCERNING NOTICE OF TERMINATION. SB582 B. King TO ESTABLISH THE STATE ACTION POULTRY FLOCK DEPOPUL…”
|
TO ESTABLISH THE STATE ACTION POULTRY FLOCK DEPOPULATION GRANT PROGRAM. | B. King | Died in Senate Committee at Sine Die adjournment. |
|
SB84
· 1 mention in agenda
Matched: “…ICULTURAL EQUIPMENT. DEFERRED BILLS Number Sponsor Subtitle SB84 B. Johnson TO PROHIBIT A MORATORIUM ON THE ISSUANCE OF PERM…”
|
TO PROHIBIT A MORATORIUM ON THE ISSUANCE OF PERMITS IN WATERSHEDS AND OTHER BODIES OF … | B. Johnson | Sine Die adjournment |
|
SB85
· 1 mention in agenda
Matched: “…SSUANCE OF PERMITS IN WATERSHEDS AND OTHER BODIES OF WATER. SB85 Caldwell TO PRESERVE PUBLIC PROPERTY; AND TO PRESERVE TIMBE…”
|
TO PRESERVE PUBLIC PROPERTY; AND TO PRESERVE TIMBER AT THE PINE TREE RESEARCH STATION. | Caldwell | Died in Senate Committee at Sine Die adjournment. |
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- Well, I just lost my quorum. I'm gonna call this meeting to order. Senate Agri, Forestry and Economic Development,
I did have a quorum and one of them stepped out. I will not do anything
without a quorum. Senator Letting was here and just stepped out.
Okay, Representative Vaughn. We're looking at House Bill 1680.
Members, if you'd take that, please. We're going to go out of order today. We're behind in trying to get bills out for everyone. I'm going to give those who have not
had a bite at the apple the opportunity to come present their bill, and then we'll get to everyone here that's available. So, Representative Vaught, if
Representative DeAnn Vaught
Unverified
0:53
you would, recognize yourself. Representative Vaught, Dan Vaught, District 87. So sorry about that,
Mr. Chair. Long session, isn't it? Yes, sir. Okay. House Bill 1680.
Representative DeAnn Vaught
Unverified
1:03
The intent of this bill is to safeguard Arkansas's agriculture resources and critical infrastructure from the prohibited foreign party-controlled business influences to prevent potential espionage, intellectual property theft, and other security threats posed by foreign ownership of agricultural land. Arkansas's statutory efforts to combat Chinese ownership of agricultural land reflects a proactive approach to addressing economic and security concerns
and protect the state's resources. And that's the intent of this bill. Okay. Question from
committee. Seeing none, no one has signed up to speak for or against this bill. Is there anyone in the audience that wishes to speak for or against this bill? Seeing none, you're welcome to close for your bill. I'm closing. I'd appreciate a good vote. Okay. What's the will of the committee?
Motion from Senator Scott? Second. Second from Senator Stone. All in favor, say aye. Aye. All opposed, say no. Thank you. Congratulations.
Speaker 15
2:16
Bill passes. Thank you, committee. Thank
Speaker 16
2:23
you, Mr. Chair. Okay. Beg your pardon? Thank you, darling. okay would
you like to present your bill you're welcome
house bill 1827 senator urban is going to present that on behalf of representative wardlaw senator if you would introduce yourself
Senator Missy Irvin
Unverified
2:56
for the record please and you're recognized Yes, Senator Missy Irvin. This is an agreed to bill that came through the house on behalf of the Sportsman's Caucus. It's amending our Arkansas Hunting Heritage and Protection Act and again trying to clarify what commission leased lands are.
This is in relationship to the conservation efforts that we've put forward as well and making sure that they have some guidelines in the law as it relates to commission-owned lands and commission-managed lands from the Arkansas Game and Fish and Wildlife. Okay. Committee, anyone have a question?
Senator Greg Leding
Unverified
3:50
Senator Gladding? Thank you, Mr. Chair. I fully support the bill. I just don't support the
Senator Missy Irvin
Unverified
3:59
House sponsor. Can we amend him off of there? I would, you know, if you want to amend it, happy to
do so. Thank you. But he's my co-chair in the sportsman's caucus. According to Representative Wardlaw, this just brings up to date, we've added about 50,000 acres of land that needs to be covered under this protection, and that's basically all it does. Senator Scott, at proper time. Senator Irving, let me ask, is there anyone here to speak for this bill or against this bill?
Are you closed for your bill? I am. Representative Ward-Wall's chairing. Senator Scott, if you have a motion to do pass, Senator
say aye. All opposed. Congratulations. Thank you. Representative Gasway, are you in the room? Anyone want to run House Bill 1562 on behalf of Representative Gasway? Seeing none, Senator King's not
running his, Ward Law. Representative Ennett, are you in the room? Anyone here to run House Bill 1856?
Seeing none. House Bill 1923, Representative Maddox?
will be running that bill for
please let me know? I did 1855. I apologize for that. I'm getting old and blind and deaf. House Bill 1928, Representative Brown. You're on that?
I see none. House Bill 1852, Representative Moore. Senator Stone. House Bill 1852. We have an amendment to the bill.
Senator Matt Stone
Unverified
6:06
would you like to present your amendment please I would the amendment removes irrigation equipment from this bill and also class one or class two all-terrain vehicles or parts of equipment that's used
for irrigation. Okay, hear a motion on
the amendment? Oh, I'm sorry. Did you say it deletes? Yes.
Senator Jimmy Hickey, Jr
Unverified
6:42
It looks like it says delete line 27 and substitute the following. Well, I
Senator Matt Stone
Unverified
6:50
guess I was looking at page 2 up there.
Senator Jimmy Hickey, Jr
Unverified
6:53
Delete line 2. Let me make sure here. Okay. That's exactly what it It puts back in parts or equipment used for irrigation. So it actually, I don't think is, unless I'm reading it wrong, let's see. Agriculture grant does not include motor vehicles.
I see what it does. If you go to 23, it's up there. It says it does not include. So I think that's what it does. It does not include it. Thank you. It just took me a minute.
Senator Matt Stone
Unverified
7:22
No worries. It's better to be safe than sorry, Senator. Okay. Now,
do I hear a motion on the amendment? Motion to do pass. A second. To a motion to adopt the amendment. Senator Stone, would you like to second that? Yeah, I second. Thank you.
All right. All in favor of the amendment, say aye. Aye. All opposed, say no. You're recognized
Senator Matt Stone
Unverified
7:48
to present your bill as amended. Thank you, Mr. Chair. Members, this bill is more about, to me, is
more than just the right for someone or a farmer to be able to repair their own equipment. To me, the larger scheme is consolidation. We see it happening across our country in a lot of industries.
We see it in the oil industry where a few players control our oil and set the price. We see it in ag land being consolidated every time dad dies or granddaddy dies, the farm is sold off to pay the taxes, and corporate America ends up buying the farm. Every time our family farmers go out, it makes us more vulnerable to corporate-owned ownership. I believe farmers should have the right to work and repair on their own equipment.
That's something that's been historically done. And I was just sitting there thinking, just in my short life, since I've been in the timber industry, something that, and this bill does not deal with the timber industry, but just since the 45 years that I've been, I've seen Clark, Timberjack, Tree Farmer, Auto Car, Bell, Husky, Log Hog, Hood, and Franklin Equipment Companies go out of business. Now we're just down to our precious few.
Used to, you could go and buy parts at a parts store, and now you just about have to go to the dealer where you bought the equipment to buy
their parts to put on that equipment that you own. If you own a car and the check engine light comes on, you can go to a mechanic, you can go to the dealer, you can go to an auto mechanic, you can even go to a parts store, and they can plug in and tell you what's wrong with your vehicle. then you can take it and get it repaired.
Now, if a farmer buys a million-dollar combine and it's under warranty, they're going to want the dealer to do the warranty work. But at some point, when that machine's out of warranty, they want to be able to do their own repair work or buy a specialty tool that would allow them to do their own
repair work. This bill does not attempt to bypass any government standards on emissions for engines,
remove any safety equipment, or try to force the dealer or the equipment manufacturer to give up any kind of proprietary information. This bill simply allows a farmer to do work on their equipment when they get ready to, especially older equipment that's not under warranty anymore. I've been a small business owner July the first to be 37 years and you have to make money to stay in business the farmers have to make money stay in
business but staying in business is not only what you make it's what you save and if you have a shop where you can do your own repair work and have the tools to be able to do it I believe you should be able to do so and with that I'm open to
any questions you through the presentation yes sir I'm open to any questions
questions all right members of the committee you have a question for senator stone I'm gonna let Senator Hickey read he's reading right now okay
very good very good seeing no questions we have people sign up speak forward and against this, Senator Stone,
so. - Okay. - Starting at the top of the list
and going down, I will try to take forward and against in alternating orders. The first to sign up is Steve Shepard signed up to speak against this bill.
Ms. Shepard, if you would come at the end of the table. your microphone is on if you would sir introduce yourself for the record and you're welcome to make a presentation and let me do state this and I will ask the committee again do y'all want to limit the amount of testimony to three minutes we've done that all you're trying to get through I'll send her letting your shaking head yes I'll take a motion on that and second so I've got motion second limit testimony three minutes all in favor say aye and that
does not include the time that we ask you questions. You may sit down there for 15-20 minutes. So you're welcome to make
Steve Shepherd
Unverified
12:40
your presentation, sir. Thank you very much. My name is Steve Shepherd. I am Senior Vice President with Greenway Equipment. I reside in Jonesboro. Real quick, Greenway Equipment is a multi-store John Deere dealership. We have 30 locations. 25 of those are in the state of Arkansas. We have 600 employees in the state of Arkansas. 300 of those employees are in our service department and 200 of the 300 are service technicians. Last year we
invested over 8,000 hours and $95,000 in direct training cost to those technicians to ensure they're up to speed with the technology, the safety regulations, the emission regulations. It's an ongoing effort every day. And so as I cut down a little bit what I was going to talk about today, I want to take you back 20 years real quick. 20 years ago if you'd walked into a greenway equipment location and before we do that i want you to think about the technology you had in your vehicle 20 years ago technology you had in your hand a year 20 years ago if you'd walked into a
greenway equipment location and said i need to be able to diagnose a code on my tractor i need a special tool we didn't understand the problem we didn't know that we didn't have a solution for you frankly let's fast forward 20 years think about the technology in your vehicle the technology in your cell phone in the palm of your hand. We have evolved as an industry. We've recognized the opportunity. Our customers have held us to a very high standard. Today, we do have a solution. You can get the diagnostic tool to get the codes for your tractor. It's called Service Advisor from
John Deere. It's $3,100 for the subscription. You can annually renew it for $2,500. We have specialty tools available. You can go in the store and buy these. They'll be ordered, or you can do from your dining room table to go greenway or shop deer either one we have equipment mobile which allows you if you've got your equipment loaded into john deere operations center by serial number you are able to send software downloads to your equipment has to be somebody in the equipment to accept it because we don't want it not interfering with the operation but
that availability is there today and so we've got to we've got to clear the air and make sure we understand what tools are out there especially tools are available second point on this we have the memorandum of understanding american farm bureau federation it is a directional document but it was signed by five manufacturers specific language to each manufacturer it's reviewed every six months the terminology has changed every six months to keep up with our changing technology that memorandum covers 70 percent of the farm equipment sold in the united states covers 50
states and it's so good that we took that language and now we're trying to put it into law our point of view is we're legislating a problem that does not exist the free market has found a solution it's available we probably do more need to do more along the education lines but we do have a solution out there in closing we have we have concerns about the bill the language we have some ambiguity when it comes to fair and reasonable i know that's in the mou but the mou is a directional document. It's not law. And apparently that's used a lot. We heard yesterday in the House.
Mr. Sheriff, your time is up. Thank you. Thank you. Questions from the committee?
Seeing none, thank you for your testimony. Thank you. Next we have Scott Walker. Your microphone is on, Mr. Walker, if you
would introduce yourself for the record. Yes, sir. My name is Scott Waller.
Scott Waller
Unverified
16:23
I'm with United Ag and Turf. I live in Texarkana, regional service manager for United Ag and Turf. You're recognized. Yes, sir. He's
speaking against. I'm sorry. No one signed up to speak for Senator Hickey. I've got three. Well, I've tried, but no one signed up to speak for. Fair enough. Again,
Scott Waller
Unverified
16:46
we are signed up to oppose this bill, and we are opposing this bill for safety concerns.
We worry that tampering of our software or being able to have that software could cause safety issues. So our concerns on safety issues can lead anywhere from safety switches being turned off to emissions being turned off, those type of deals. We want to make sure that the service advisor that we've already got out there has got everything in it that is needed outside of being able to download payloads.
What we're seeing as a dealership currently right now are people are deleting emissions, and we see that in big trucks on the highways, and we don't want that. We're also seeing people turn up horsepower on tractors, and what we're concerned with that is that it is a safety issue. Things get out of control. The reason I bring those up is because in page 4 of this bill, line 2729, it states tools to be provided, and I quote, tools include without limitation software or mechanisms that calibrate functionality or
perform any other function required to operate we are concerned of that wording right there without limitations what does that mean we don't want that to be able to be changed we as a dealer have to use the software that deer provides us and we have limitations Also, fair and reasonable terms mentioned throughout the bill, we are concerned in who sets those as far as pricing. Our customers are our passion, and we provide a living for our employees and our customers,
and neither of us survive without each other. So, again, we at United Ag and Turf, much like Greenway, we do support the right to repair. We just do not support the right to modify our equipment or our business. On our website, United Ag and Turf, we have the link to do-it-yourself repair, and right there you can go just like and find customer service advisor from John Deere. We will help and train customers with that training.
Sorry, I'm just not very much of a public speaker. You're doing fine. We're making sure that nothing gets turned off that could eventually kill someone or later on somebody buys a piece of equipment that has been altered and then it is not up to standards of John Deere. And with that,
I close. You hit it three minutes and 21 seconds, I think. You're right on the money. Let
me see if any committee has questions.
Senator Matt Stone
Unverified
19:51
Senator Stone. If a farmer bought a piece of equipment from John Deere and they modified it in any way, would it void the warranty? Yes. Well, then they're not going to turn any safety equipment off or emissions in. Is that a reasonable statement? That would be a reasonable statement under warranty, yes. Under warranty. Thank you. And since you brought it up, if it's out of warranty and they did that, there's no repercussions against John Deere since they did it in their own private shop,
and that would be between them and the federal government or any
Scott Waller
Unverified
20:24
regulatory body. It would be between them and the federal government, but if we were to purchase that as a dealer, we would have
Senator Matt Stone
Unverified
20:31
to repair that before we could resell it. Well, then you would take that into account when you purchased it, any upgrades you had to make to put it back into compliance. Yes, sir. So
there's no financial harm to you. Prior to trading. Okay. Any
other questions? Thank you very much for your testimony. The last to testify, and again, it will be against, is Eric LaFleur.
Speaker 100
21:13
Mr. LaFleur, if you would identify yourself for the record. I'm Eric LeFleur, and I'm here on behalf of Progressive
Speaker 101
21:23
Tractor and Implement Company. You're recognized. Mr. Chairman and members, I'm Eric LeFleur. I've worked for Progressive Tractor and Implement Company. I serve on their board of directors and head up their business development team, and I've done so for probably the last, I guess, 15 or 20 years. PTI started in 1991 with just two locations in Louisiana,
and now in our 34th year in business we operate 27 locations and in the next 90 days 33 locations the majority of which are going to be in the state of Arkansas so much so that the company has contemplated moving its headquarters here to Arkansas although I'm from Louisiana I have to say that Arkansas has a little bit more business friendly environment and that's another reason why we might make that move. We have locations throughout Arkansas. I didn't know Arkansas's geography, and now I know it very well,
and I know towns of Stuttgart, which is not pronounced Stuttgart, but Pocahontas, England, not across the channel, but right down the street. I appreciate the opportunity to come talk about 1852 and the right to repair. You know, at all of our locations, we sell parts, we provide service, We give them manuals, technical advice, you name it, it's provided. And the reason we do that is not because there's a law that requires us to do it. We do it because if you have any business sense at all, you're going to do that.
And that's probably true for every dealer here. The better the service that they provide, the better we have to provide our service to beat them out of their business. And so at the end of the day, the consumer is going to win. But we're going to win as well because our success is based on our customers' success, and they go hand in hand. To the extent that any manufacturer in the past may not have been so willing to provide additional information, I can tell you the environment is such that they are more than willing and eager to do so.
And it comes in large part because their business survives on that story, that customers can do that type of work. And their success is also based on our customer's success. It goes all the way around. So I just want to make sure that we understand that there's no law that currently requires us to provide the best service that we can. It's our business survival that forces us and gives us that desire to make it to provide those types of services.
The bill suggests that maybe we are bad actors, and I don't think the record shows that. And if you look at the number of complaints and if you look at the portal that's been set up to ensure that nothing like this happens, you won't find it. And if you find it, I would want to know about it, particularly if it involves our own company. But that just hasn't been the case, and I want to make sure that we don't pass a law that suggests we're bad actors when the record shows otherwise. We want to be good actives because it's in our best interest,
and that's why we oppose the building. Your time is up. Questions from the committee?
I have one. Tell me about, I'm sorry, Senator Stone, I'm going to turn your mic on. You said you
Speaker 63
24:40
currently have 33 locations. We will in the next 90 days, the
Speaker 101
24:43
majority of which will be in the state of Arkansas. When you all started out, how many did you have? Two. All right, thank you. We started two in Louisiana, and now we're going to be, I think, in
four states. You mentioned training. Tell me about your training.
Speaker 101
24:59
How does that relate to people? So the issue about training, yeah, it's been a problem, and I don't know if it's a problem for my colleagues in the back, but the level of sophistication and the electronics in equipment today is much more than it's ever. You know, it's very complex. So you have to have better trained people and better trained technicians. In our case, PTI, our company, we had to start our own school
because the Louisiana College and Technical System could not produce enough of the technicians that we needed to service our own equipment. So we started our own school. When this same issue came up in Louisiana, part of the problem was there just weren't enough technicians around for anybody, much less the dealers. So in that process, we were able to get, I say, Case, I think Kubota, I know John Deere, I think everyone's involved in it.
And so right now in the state of Louisiana, they're building a specific technical college to address in large part this concern about the kind and the level of technician that you need to work on that equipment. Part of what these manufacturers are doing, and including some of the dealers, is the manufacturers have agreed to provide the instructional materials, the analytics, all of the things that it takes to get a guy to work on a million-dollar tractor that's highly sophisticated and highly computerized. And so they are interested in it.
They're self-interested because they're going to need those technicians as well. The state is going to spend about $20 million on that school. I know that's not what the chairman of the finance committee wants to hear, but that school is under construction now, and they have an educational committee that consists of industry folks where they have all decided on what instruction materials each of them will provide, what analytics, whatever it is that they need to ensure that we have high-end technicians to work on this equipment.
And one of the problems is that a faculty member to teach in a school like that is already making very well in the private sector. So it's going to require the technical schools to really pony up the money to get the kind of qualified person they will take to instruct. In the case of us, in the case of PTI, we've also agreed to do an instructor over the instructor, teach the teacher. And so we have not implemented that program because they're not really ready to get started. But when they do, we fully intend to take one of their instructors, place them in our school to try to develop a teach the teacher program.
We would like to do the same thing in the state of Arkansas. That would be of interest to anyone, because I think it's I think it would be very helpful, not just to the dealers, not just. It's just for everybody involved in the industry. Question? Seeing none, thank you very much for
Speaker 110
28:00
telling me. All right, we appreciate your time. Thank you. Okay, no
one else has signed up, but I always ask, is there anyone else in the room that wish to speak for or against this bill?
Well, good morning. Yeah, get to the mic. Are you speaking for the bill or against the bill? I am against the bill. Introduce yourself for
Layden Pugh
Unverified
28:26
the record. My name is Layden Pugh. I grew up in Portland, Arkansas. I'm the president
Speaker 115
28:32
of Ag Up Equipment. Your recognition. A John Deere dealer in southeast Arkansas. As Ben said, we're not against the right to repair. We do it every day. Our service managers spend time on the phone walking people through things.
We're not in the business to upset farmers. Anytime we lose a farmer, that is not a good thing for our industry. We go to church with these folks. Our kids are intertwined in events. To be painted in some corner where we're against agriculture or the ability for somebody to make a living is not accurate. My family's been in, you know, finance, banking, cattle, cotton ginning, fertilizer, granary, John Deere, general store.
We've been in business since 1947, by the way. I'm third generation. So we've seen a lot of different times, trying times. Agriculture's not perfect. Every day is a new day as far as your equipment, the weather, employees. things are not simple we get that but neither is our equipment our equipment nowadays requires a lot of precision you hear the word precision agriculture a lot that is very accurate things
have to be precise guidance gps signals uh inner inner workings within engines as far as You know, EPA guidelines of, anyway, the fuel issues. But the biggest challenge we have with a right to modify is safety. We see some of my colleagues here will speak on how a tractor can be turned into a,
It's just not functional again by actors that decide to change things. All customers are not equal as far as their ability to work on things. It's a very challenging side of the business, the technology piece, the engines.
insurance and i said i've referred to cotton ginning we got one in one insurance company in the whole country that will write a cotton gin if we end up with machines that are who knows what and whatever happens whatever event uh you know insurance is not going to look favorably towards that as far as covering machines and their uh the liability piece as well not only the the hardware. Mr.
Pugh, your time is up, sir. Okay, well, I appreciate your time. Thank you,
appreciate you coming. Anyone else in the audience wish to speak for against this bill? If not, Senator Stone, would you like to close your bill? Yes, sir. I'm sorry. Better raise your hand. I didn't see you. Sir, are you speaking for or against the
Speaker 118
32:00
bill? I'm speaking against the bill. And your name? My name is Heath Hinsley. I'm from Monticello, and I am currently the used equipment
Speaker 120
32:06
manager for AgUp Equipment. You're recognized, sir.
Thank you. I would like to speak from the side of the used equipment business where most of our deals with sales involve used equipment trades. In today's world, that's a very, very tough industry as it is without complicating it with issues that can be unseen as a dealer when these modifications, alterations, or anything that has been done to this equipment. It is not recognizable by the eye. It is not recognizable by a lot of things from diagnostics even.
We run into issues where this corrupted software can be entered into this equipment and it can be days, it could be months, it can be an extended period of time before the problem that this creates ever arises. This not only creates the issue for a dealership, but it could, in effect, affect another customer because the machine could pass through our inventory undetected of this, and then once we've sold it to another individual, then that problem arises,
and we have no way of knowing that, diagnosing that, or anything, and the customer looks to us for guidance on repairing this issue. and we have no um we have not done anything to the machine it could have been the previous owner that did these things and so um it's more to it than just meets the eye with this subject of um of of customer repairs i i've been in this industry my whole life starting from farming to managing the farm to a john deere technician now as um a a used equipment manager and so i've
seen the times come from when we worked on 12-volt systems that you could take a hot wire and make anything run. We're past all of that today. That doesn't happen. We have voltage drops. We have certain things like that that, like I said, a corrupted software into something can cause problems two years from now or 10 years from now. We don't know when that date is, and so it's not trying to keep someone from repairing their equipment. It is trying to make sure that they are properly trained, know what they're dealing with, and also, you know, these guys that put this
bootleg software in there, they don't know what the John Deere operating systems or case or whatever other manufacturer this is. I kind of use the analogy of a computer hacker. I mean, that's what they're doing is hacking into systems and you know um we see that all the time in in in all other aspects of our daily lives that these things happen and um we'd appreciate um a no vote five seconds left
so you did a good job questions from the committee
seeing none thank you for your testimony okay i'll ask you again anyone else This time seeing none,
Senator Stone, you're recognized to close for your bill. Senator Stone, you're
Senator Matt Stone
Unverified
35:34
recognized. Thank you, Mr. Chair. I just want to comment on the people, or two of the people that spoke against the bill.
And I also want to make note that no one came here to speak for the bill today. Because you know who's going to speak for the bill? It's going to be the farmer. But you know what they're doing today? They're on a tractor putting their crops in. They don't have time to come up here. Farmers are in a strain right now, and they're in a struggle. And it's been that way for a long time. Now, to the last gentleman that just spoke, he talked about some farmers have modified equipment.
but they have done that under the memorandum of understanding that they have right now all we're doing is taking the memorandum of understanding that's already there and putting it in statute so things should be no better or no worse when it goes to statute the third gentleman that spoke made the comment that they act like we're bad actors I don't think that you're bad actors I I believe you in good faith stepped up and did the Memorandum of Understanding.
But here's what I know about history. I talked about consolidation. It was said that they went from two stores into Louisiana to 33 locations in four states. We're back to consolidation. And as more dealers become stronger and a few more equipment dealers go out, at some point, history has always proven right. When you get down to a monopoly or an oligopoly, that's when the bad actors show up.
This is to reduce the statute, what's already agreed upon memorandum, so the farmers don't ever get put in that position. And with that, I'm closed for the bill,
and I'll make a motion as amended. Do pass. I have a motion due passed. hear
a second have a second uh any discussion on the
motion seeing none all in favor say aye aye all opposed say no no bill fails thank you mr. chair thank you we'll go to the next bill
okay I saw Representative Bennett come in and leave.
Speaker 126
38:14
Senator Crowell, did you have a bill you were
going to present? Representative Wardlaw's bill? No,
1928. 1928? You're recognized. House Bill 1928.
1928. Senator Crowell, your microphone is on. If
Senator Steve Crowell
Unverified
38:50
record. Senator Crowell, District 3. This bill provides protections for farmers whose land applied poultry litter as long as they follow the state-approved plan known as the Nutrient Management Plan, the NMP.
Especially for family farmers who comply with the state in how they manage the person's property. If they follow the rules, they ought to be protected from frivolous lawsuits. Only those who follow their NMPs receive protection, meaning bad actors can still be enforced against. The bill actually defends the state's regulatory authority. We lose farmers every year with fewer people going into the business. This is one way to help this.
THIS WOULD INCLUDE ROW CROP FARMERS WHO NEED SUPPLEMENTAL NUTRITION FOR THEIR SOILS, CATTLE FARMERS WHO USE POULTRY LITER IN THEIR FIELDS TO AID THE GROWTH OF GRASS FOR CATTLE AND CONSUMPTION AND OTHER FARMERS AND RANCHERS WHOSE SOIL WOULD BENEFIT FROM LAWFUL APPLICATION OF THE NUTRENTS. There are commercial farmers, used prop layers is a very valuable tool to grow in hay and other crops.
Any members, do you have a question? Senator
Crowe. Seeing none, we have several people signed up to speak
on this bill. okay i'm sorry i can't brandon with farm bureau i can't read
Speaker 135
40:43
if you if you would introduce yourself for the record sir uh brandon martin i'm a poultry producer
from Northern Rock County. You're recognized. I'm for this bill. It just gives added protection to producers like me. It's a state required to get this NMP and nutrient management plan. And if you follow all the guidelines, I think that you should have some sort of protection. I think that that will help people follow the guidelines. If you follow the guidelines and are up for litigation against you,
there's no sense in following the plan to begin with. So I think it will be more compliance. It's a comprehensive plan. It has guidelines of buffer zones and watersheds and what you should and should not do. It's very comprehensive. You know, farming is hard enough. if you're doing everything right, you should have
Speaker 138
41:40
some protection to keep litigation against you from a third party.
Speaker 62
41:51
Senator Hickey is reading right now, so if you have a question, any of the
committee? I'm going to give him a second to finish reading
the bill. Any other committee members have a question? Senator Hickey, you're good. Thank you. Thank you very much. Senator Crowell? That's it.
Senator Steve Crowell
Unverified
42:28
Farm Bureau and the Poultry Federation are leading on behalf of the industry, but wanted to echo the support that we
believe that common sense and personal property rights bill and we did a lot of due diligence that's why it's coming at the end we apologize it's at the end of the race questions we're
done with that I make a motion do pass do I hear a second second Senator Scott discussion on the motion seeing none all in favor say aye all opposed say no
congratulations bill passes Senator Hester were you going to run the
Senator Bart Hester
Unverified
43:10
bill If I will, I'll just – it's House Bill 1923. I'll just hand it off to Ms. Andrews to
Speaker 146
43:17
present. You're here, but I've tried twice. Good morning. Catherine Andrews,
Speaker 149
43:22
Director of the Arkansas Office of Outdoor Rec. Senator Harris, would
Chair
Unverified
43:27
you introduce yourself for the record, please?
Senator Bart Hester
Unverified
43:31
State Senator – 1923. State Senator Barthester, District 33, House Bill 1923. Thank you. Your recognition. Thank
Speaker 149
43:39
you. Two years ago in 2023, Senate Bill 464
Speaker 153
43:42
passed unanimously in both chambers. It's the Natural State Initiative Opportunity Zones. This created four Opportunity Zones, not the federal. These are state, natural state Opportunity Zones. So four of these zones around four state parks. Pinnacle Mountain, Queen Wilhelmina, Delta Heritage Trail, and Petty Jean State Parks. And this included an
eighth of a mile around the state park, including the state park. And what we wanted to do with this was encourage businesses, specifically in outdoor recreation, to locate in one of those zones to help enhance the visitor experience at those state parks. And if you did that, you would be able to qualify for an income tax credit and or a sales and use tax credit. To this point today, we have received no applications for those zones. And so we've heard lots and lots of feedback from
businesses across the state who want to take advantage of these incentive programs, but they've said the barrier, especially financially, is very high. And so what we're doing is decreasing the minimum investment threshold and increasing the amount of the zone to make it easier for those businesses
Speaker 154
44:54
to invest in those areas. Questions? Senator Hickey? Since we're changing
Senator Jimmy Hickey, Jr
Unverified
45:08
these numbers, and I don't know that it
would, but did it cause a fiscal impact on the state? Did we look at that, or do we have
Speaker 153
45:20
DF&A look at it or anything it does not because it's just an income and a sales and use tax credit and we've
Speaker 158
45:27
received none so far it's an income would you say it's a it's a
sales news and what an income tax credit okay income I let me interject income against that company only they can't sell the
credit correct all right thank you that's fine okay any other questions
all right no one signed up to speak for against does anyone in the audience wish to speak for against this bill seeing none senator hester would you
Senator Bart Hester
Unverified
46:00
like to close for you bill i'm close it's just part of part of the package to continue to help with
uh outdoor recreation appreciate a I have a motion by Senator Pearl, seconded by Senator Hickey. All in favor say aye. Aye. All opposed. Congratulations. Representative in it.
Representative Denise Jones Ennett
Unverified
46:22
House Bill 1855. 1855. Good morning, Senate Agriculture Committee. I am State Representative Denise Ennett, District 80, parts of downtown Little Rock in Pulaski County. In front of you, I have House Bill 1855. And can I call my witness up, please? Pardon?
Can I call up my witness? Yes, please do. This is Pulaski County Attorney Adam Fulgerman. He's also my
Speaker 166
47:01
neighbor as well. Turn your mic on, sir. Introduce yourself. I'm Adam Fogelman, Pulaski County Attorney. Yes,
Representative Denise Jones Ennett
Unverified
47:09
sir. Representative Vanden, continue. Yes. So Mr. Fogelman brought this to my attention about a year ago. This bill is simply addressing the overlapping boundaries that we have in the state of Arkansas.
It authorized the Department of Agriculture to recommend adjustments for fire protection districts with overlapping boundaries, ensuring clear jurisdictional lines, and reducing service duplication. And I'm open to any questions if we have any. Do you want to
Speaker 166
47:47
add something? From time to time, the county gets requests from fire districts
Speaker 167
47:52
to give attention to no-man's lands,
areas that may be on the boundary of a municipality but that a fire district isn't assigned coverage for. And one of the things that this bill does, in addition to addressing overlapping areas, is to ensure that there's proper authority and a process in place to address those no-man's lands so that fire protection may be provided. I'll give Senator Hickey a moment to read.
Questions from the committee? Seeing none, I have no
one signed up to speak for or against this bill. Is there anyone in
the audience who wishes to speak for or against this bill? Seeing no one, Representative Bennett, would
Representative Denise Jones Ennett
Unverified
49:22
you like to close your bill? Yes. Thank you, committee. By streamlining this process, we can assure optimum coverage, reducing redundancies,
and improving emergency response time for our communities, and I'm closed. Okay, I'm closed. Motion
do pass. Motion do pass by Senator Scott, second by Senator Letting. Any discussion on the motion? Seeing none, all in favor say aye.
Aye. All opposed. Thank you. Thank you. Okay, we've got one more bill. We're going to take a five-minute recess so I can try to get rid of this call. We'll be back in at 11.05. That's a 10-minute. We'll be back at 11.05.
Speaker 184
50:20
Good, how are you? Good, how are you? Good, how are you? Thank you.
Unknown speaker
55:37
- Okay.
Free. Text me before we start because I know you need me. Hi, Mom.
Speaker 227
58:25
you.
I'll have to come back by a minute and then once I get upset,
Speaker 238
58:43
and I'll give my beautiful walk in here.
Speaker 241
58:46
Yep. That's so funny. Yeah, I feel like I've got by there. I'm excited, so. Yeah. Thank you. Thank you. Thank you. Okay, we'll go back in
And after the short recess, if I can round up
the quorum, we will be hearing your own House Bill
Speaker 246
59:43
1656. When he comes back, we'll have to grab one.
senator davis if you would turn your mic on please and you're here to present senate house bill 1656 is that correct yes introduce yourself for the record your guest introduce himself and you're recognized all right thank you mr chair brian Davis State Senate District
Senator Breanne Davis
Unverified
1:00:26
25. And I'm Mark Robinette. Thank you. I just know that we have
debated this bill a bit so I just want to update a couple of things. We've made amendments to it. First of all I know there was concern about this bill changing leases but I just want to clarify that this does not change leases. This does not change contracts. There were also concerns that it would impact south arkansas um and on page three section f it clearly states that this does not touch oil this does not mess with south arkansas and concerning modifying the paydex
what we amended was removing all the reporting and transparency language so that would not conflict with paydex at all um and just one real last point is that there's been you know five or six federal cases where there's been no ruling either way. And the federal courts are looking back at state law, which makes our state court case really predominant in this. There's been multiple court rulings and appeals that have told Flywheel to go back to May of 2019 and pay
the integrated wells as well as interest. So all courts in some way have cited vagueness and ambiguity in Arkansas law. And they've said, that is what we're looking at. That's what we need to understand. But it's too vague for us to make a ruling. And that's why we need House Bill 1656. That's exactly, we need to specify exactly the way that these leases need to be treated. Many lawyers and experts have said this is the only way, that the only way to fix this is to
clarify the law. So that's what we're trying to do here is simply clarify the law. And I've, you know, brought someone with me that I think can talk about this from a different point of view than we've heard. And I'll let him talk a little bit about himself and what he can explain about this bill and take your questions. Thank
Mark Robinette
Unverified
1:02:31
you. Thank you. Chairman and members of the committee, I appreciate the opportunity to be here today. My name is
Speaker 251
1:02:38
Mark Robinette. I've been an oil and gas lawyer here in Arkansas for almost two decades. I've served as adjunct professor of oil and gas
law at the Bowen School here in Little Rock since 2019. And over the years, I've done various other roles in the industry, including president of the Central Arkansas Landman Association, chair of the Bar Association's Natural Resources section. I've offered many, many CLE materials, more than I can count, many law review articles on oil and gas law. And I'm also a royalty owner. I own royalties in three states, nine different counties, and one Louisiana parish. So I've spent my career in the
trenches of oil and gas. So I don't know if you've been beat to death with what the issue is, but I'm just going to quickly recapitulate it. We have a statute, 1572-305, that utilizes a term, net proceeds. Now, net proceeds has no statutory definition. So this has opened the door to some inconsistency some confusion and costly litigation between gas well operators and their royalty owners this recently came to head in the case of flywheel production company versus arkansas oil
and gas commission where the court of appeals acknowledged that that term net proceed is susceptible to multiple interpretations so it is ambiguous and when you leave something that important open to interpretation you get a pretty predictable result you're going to have inconsistent practices, confusion for royalty owners, confusion for gas oil operators, and court battles over whether those post-production expenses on that first one-eighth of blended royalty can be subject to deduction, even when the privately negotiated lease that was bargained for says that
they cannot. So HB 1656, the idea is that we're going to put a definition on net proceeds. we're going to define net proceeds as it relates to two classes of leases one the integration leases and what the statute will do is it will echo the flywheel decision saying that essentially if you're integrated net proceeds means you take the gross proceeds you subtract taxes assessments and true third party costs or any cost specifically allowed by the oil and gas commission lease form
So really, it continues to leave the integration leases under the authority of the Oil and Gas Commission. Now, for leased interests, this is where it's going to clear up a lot of confusion and stop a lot of future litigation. Net proceeds is going to be gross proceeds, meaning all the gas sold, minus the deductions permitted by the lease. so in other words we're going to return this back to the private contract that was negotiated and bargained for between landowner and gas company so it's a clear simple easy solution to this
so i want to tell you about what this bill does and does not do be very clear this does not purport to be retroactive it does not purport to reach back and undo what is already done it is not here to rewrite private contracts it doesn't rewrite leases or override language or any single out any party it just clarifies an ambiguous statutory term going forward so everybody understands and plays by the same rules this is clarity that benefits everyone
royalty owners and producers alike now you're going to have opponents of this bill and you've probably heard this all before, that somehow this is going to impair existing contractual obligations. I think that is a great misunderstanding of this state's police power, its power to continue to regulate a regulated industry, and how the contract clause doesn't really affect that in this instance. This isn't retroactively changing any contracts. It's not
impairing any truly vested rights, it clarifies a statutory term that courts have already found to be ambiguous. I'll tell you the U.S. Supreme Court has repeatedly held the authority of state legislators to act in regulated industries where a law serves a legitimate public purpose and does not arbitrarily impair private agreements. To give you an example that's pretty on point, you can look at the 1983 case before the Supreme Court of the U.S., Exxon Corporation v. Egerton,
there Alabama passed a statute regarding severance taxes. And so the severance tax statute, there was going to be an increase in the increase in tax. The law prevented producers from passing the increase on to royalty owners, even though this would change the way the producers perform their contracts and what they had come to expect under their contracts. So the producers has challenged that law as a violation of the contract clause, U.S. Supreme Court upheld the law affirming the state's authority to regulate the public interest, even when it touches on
private contracts. And so the bill here today follows that same model. It's clear, generally applicable rule. It serves a legitimate public interest. It reinforces lease terms rather than overriding them. And I'll tell you that Arkansas precedent supports this. You can look back to 1962, Reserve Vault versus Jones, where our own Supreme Court approved legislation that opposed new requirements on existing contracts regarding burial vault service. And what is interesting about this is that our court quoted the United States Supreme Court case of building loan versus
Blaisdell. And this is a great quote, because I think this goes to the heart of everything we're talking about here. It is true. Not only are existing laws read into contracts to fix obligations, but also the reservation of essential attributes of sovereign power is read into contracts. The policy of protecting contracts presupposes the maintenance of the government by virtue of which contractual relations are worthwhile. So in other words, you reserve the
power to modify and clarify laws. Clarity in laws is what makes contracts meaningful, makes them enforceable, makes our commerce go, and the legislature retains that power to provide clarity when it is needed. You also maybe hear about a lot of these federal district court cases where things went the way of the producer. Well, I'm here to tell you that the federal court is just adopting one of two or more possible interpretations of this ambiguous term,
And nothing the federal district court does is binding on the state of Arkansas. You know, the Arkansas Supreme Court has not ruled on this, only the Court of Appeals. So, again, it's just an interpretation of an ambiguous statute. It doesn't create a permit constitutionally vested rights. You don't have any vested rights into a particular interpretation of an ambiguous law. This in no way limits your power to clarify your own laws. going forward. As noted, the bill just applies to gas units. Oil wells that incidentally produce gas
are not on the table here. It doesn't reach beyond its purpose. It's the target in careful and constitutional means. This is a necessary and timely piece of legislation. We're going to clarify a key term that's been undefined for far too long since 1985. We're going to reduce litigation and uncertainty. We're going to protect royalty owners and good faith operators. We're going to uphold contracts rather than undermine them. This is not a partisan issue. It's not a power grab. It's a measured and responsible correction to a legal gap that's frustrated
everybody involved for years. So, you know, in an industry where clarity and relying on contracts is critical, trust matters. And so HB 1656, in my opinion, is going to bring both. It says to mineral owners, your contract that you sat down on your front porch and negotiated with the company landman, it matters. It means something. You get the benefit of your bargain. Maybe you gave up $100 an acre for a gross royalty clause.
Maybe you took 316th royalty instead of a 5th royalty for a gross royalty clause. You bargained for that. You should get the benefit of your bargain. So that's what we're saying to mineral owners here. And it says to operators, if you follow the lease that you signed, the deal you made, we've got your back. If you do what you're supposed to do, we're going to give you clarity. We've got your back. And it says to the courts, here's what we mean. We get rid of the ambiguity. So this is going to protect the public interest.
This is going to uphold the rule of law, and it's going to ensure that the contracts are honored as written. And this is the kind of legislative clarity that is going to help Arkansas continue to grow and prosper. And I thank you for your attention and your service to the great state
and the great people of Arkansas. Thank you,
Senator Jonathan Dismang
Unverified
1:12:04
Mr. Robinette. Senator Disman, you have a question? Yes, sir. Thank you, Mr. Chairman. Is anything in this law out of line with what was understood and had been understood
about this act for the last 20 years up until Flywheel became a player in Arkansas?
Speaker 251
1:12:17
It was the industry practice from the word go that you follow what the lease says. It was not until Flywheel Energy showed up and began to wholesale reinterpret the understanding of the law that this all became an issue. Not to say that there might not have been others along the years, but that has been the big thing. That's the acute pain that we're experiencing right now that the legislature needs to step in and take care of. I
Senator Jonathan Dismang
Unverified
1:12:46
can find no other player in the Fayetteville shale, which I would be familiar with,
that has ever had an interpretation that is similar to flywheels. So just as you were talking about other players, I think that would be some clarification there because I don't think it's ever happened. But with the language being pulled out that relates back to the detailing of the billing and that sort of thing, is there anything in this bill that is out of line with what was understood to be the definition by everyone, both royalty owners, those signing the lease, and producers,
that would be out of line for how the words net proceeds were
Speaker 255
1:13:25
interpreted? Absolutely not, Senator. Thank you.
Speaker 251
1:13:28
This is 100% the way they understood it. You know, long ago, I represented Southwestern Energy, and that's the way Southwestern Energy did it. And in doing that, hey, they were able to drill up, you know, 1,000 or more gas units, successfully developed them. You know, that's always been the way business was done. So,
Senator Jonathan Dismang
Unverified
1:13:50
again, just for the committee, this brings everything back in line
for what has always been done in leases until Flywheel provided for a different interpretation and required the royalty owners to sue, required the owners to go through that litigation process, got it remanded to the federal courts who said that they didn't want to interpret that then went back down the supreme court who said they didn't want to interpret and then that allowed the federal court to opine and here's where we sit is that fair and this is going to just pretty much restate what we've always done
Speaker 251
1:14:24
that's that's an absolutely fair and accurate characterization of what we're
Senator Jimmy Hickey, Jr
Unverified
1:14:27
trying to do here okay any other questions i just need clarification for senator
davis you mentioned something about page three in your opening statement about there being language there and I want to make sure I have the correct, the last, the last, okay, so the last one that we have is this 1141 49 CRH 145 at the bottom. I just want to make sure that I have the correct copy since because there is a page
Speaker 105
1:15:00
three, but there's no language. what's the at the bottom center
Speaker 266
1:15:11
davis what's the yeah yeah i'm sorry it's
Speaker 152
1:15:14
e 3e i wrote down page two it's page two okay all
Senator Jimmy Hickey, Jr
Unverified
1:15:20
right no no problem i just wanted to make sure i had the correct copy okay thank you good
any other questions if not we have several people signed
up to speak for and against first we have mike norman to speak
witnesses we allow three minutes and then we'll have time for questions if you would your mic is on introduce yourself for the record sir I'm Mike Norman, speaking for the bill.
Speaker 272
1:16:04
Grew up in the rise fields of eastern Arkansas, but we ended up with land and property up outside of Moralton, Arkansas. And when all of this stuff started, I basically grew up in eastern Arkansas, went to school at Arkansas State, worked in the corporate world for 30-something years. And so oil and gas became a new something else to learn for me and my family. and I basically represented or took my family since about 2005 in this,
and I have represented, like I say, my families, my siblings, my parents, and everything else on this. And in doing that, I tried to educate myself. I talked to the Arkansas Oil and Gas Commission. I talked to the equivalent of that in Oklahoma. I talked to the equivalent of the Arkansas Oil and Gas Commission in Texas. I talked to a friend of mine's brother who was an oil and gas attorney in Texas, And then I talked to, or I went to a seminar put on by Mr. Charles Morgan, attorney from Texarkana, who basically was the boss hog of the oil and gas industry, and I guess may still be, or is a big player in that, or at least his firm is.
And I went to hear him speak one night at a seminar, and when you boiled it all down, all of them would say, get you a zero expense lease, or you'll never know what you're paying for or anything else. And then you negotiate for whatever else you can get. And I ended up, my family ended up with a lease that was 20%. Now, that lease, I didn't write it. I didn't hire an attorney to write it. The gas company wrote the lease.
I signed the gas company lease. I told them what I wanted, and they said, not a problem. We'll put that in there. And that's what I've had since it started producing back around 2010, okay? And so that's what my family has gotten, and it's gone on from there. If there was a problem and there were an issue from time to time, I would provide them a copy of my lease. They would send them to their attorneys, their attorneys would review it, and they would rectify the problems.
They would pay me any back funds that they owed me, and they would pick it up and pay me ongoing correctly. I did that with Chesapeake. I did that with BHP. I did that with Merit. I did that with Southwest Energy. I did that with XTO, and I have provided – Raysa, British Petroleum. I provided my leases to every one of those companies. They sent them to their lawyers. They reviewed them. They sent them back and said, well, you're right. You've got a good lease. And there was never a problem after that, you know.
Speaker 273
1:18:54
So I've been through that with all those different gas companies, every one. Like I say, Mr. Morgan was... Mr. Army, your time is up, sir. Okay.
Let me see if there's any questions from the committee. Seeing
none, thank you, sir, very much. Okay, to go to against Alan Perkins.
If you would, Mr. Perkins, your mic is on. Introduce yourself again, please,
Alan Perkins
Unverified
1:19:37
sir, and you're recognized. Thank you, Mr. Chairman. My name is Alan Perkins. I work at PPGMR here in Little Rock. I'm an oil and gas attorney for about the last 30 years. I'm here representing APRO. Our firm also represents Flywheel and a number of other producers, both in the gas fields and in South Arkansas. I've been here before. We've had this discussion before.
I won't rehash it all, but just need to remind you of a few things. You know, the statutory language that now exists in 1572-305 that we're here about today that the proponents of the bill want to change was passed by the legislature 40 years ago, And that law changed the way that gas royalties would be paid. It was mandatory, done by statute.
And since that time, it has had that impact on every oil and gas lease that was signed after March of 1985. And I have to disagree with Mr. Robinette about the fact that that statute does not create an obligation in contracts. I'm going to quote to you from two cases, one from the Arkansas Supreme Court, one from the Court of Appeals, that say the law in effect at the time a contract is made forms a part of the contract as if it had been expressed in the contract.
That's from our Supreme Court in Woodland v. Southland Racing Corp., a 1999 case. And another example from the Court of Appeals says a statutory provision relating to the subject matter of a contract by operation of laws enters into and becomes part of the contract. So any way you slice it, this act, which actually changed the way royalties would be paid, became an obligation of those contracts. This is not a severance tax.
This isn't something that's ancillary to the contracts. It was actually intentionally made to change the way royalties were paid under a contract. It's unlike the cases that Mr. Robinette cited where this is part of the state's police power. Once that became an obligation of those contracts, then it can't be changed for those existing contracts. If you want to change it for every future lease that's entered into after this date, that's fine,
but that won't affect the Fayetteville Shale contracts that are already in place, which came after the passage of this law in 1985. The statute that is proposed here, the statutory language that's proposed, will absolutely change that. It will change the obligations of those contracts, and it will be unconstitutional. So even if you do it, it's not going to hold up, and it's a poor practice for the legislature to intentionally. Your time is up, sir.
Senator Jonathan Dismang
Unverified
1:22:44
Anyone have a question? Senator Dismayne? I think I understand what you're saying, but has anyone besides Flywheel interpreted net proceeds and applied it to contracts the
Alan Perkins
Unverified
1:22:59
way that Flywheel has? Yes, Senator, they have. XTO did. The first lawsuit against XTO for this practice was in 2016, over two years before Flywheel ever came to Arkansas. It was Wisenhunt versus ExxonMobil Corp and XTO.
What was the outcome of that? The operator prevailed. XTO prevailed in that case, and the court agreed with the interpretation of the statute that has since been upheld in five more federal cases. And those cases were not just against Flywheel, they were against Flywheel, ExxonMobil, XTO, Merritt Energy, BHP Billiton Petroleum, MMGJ Arkansas Upstream, which is a part of Merritt, and Riverbend Oil and Gas.
In each one of those cases, the interpretation that those were obligations of the contract and that net means net in the statute was upheld by the federal court. They sent that potential decision to the Arkansas Supreme Court to ask if the Supreme Court wanted to interpret that, and he told them what he was going to decide, and the Supreme Court declined. So you're
Senator Jonathan Dismang
Unverified
1:24:08
saying, is that just on the integrated leases, or is that on all leases?
This is on only private leases. The
Alan Perkins
Unverified
1:24:19
integrated leases are on a special lease form that was created by the Oil and Gas Commission and the Court of Appeals decided that in that particular application where private parties were forced integrated into a unit that the commission's interpretation would prevail only as to those integrated parties. And so when we stand in a group and we're all discussing
Senator Jonathan Dismang
Unverified
1:24:40
and we say that Flywheel is the only one applying that that way, that's just someone else isn't being honest.
That's correct. Because you've been standing in that group with me having that conversation. I sure have. That's incredibly odd.
Senator Jimmy Hickey, Jr
Unverified
1:25:01
Any other questions? Not the whole statute. Can you read the language that's in question? Do you have that right in front of you as far as the net proceeds? I want to hear that specifically myself. I know you said that the courts have already interpreted that net means net.
Speaker 288
1:25:18
I just want to hear the way that reads, if you have it. I have it, if you'll give me
Alan Perkins
Unverified
1:25:31
one second. Sure. Yes, sir. That's okay with you, Mr. Chair. Yes, sir. Senator Hickey, this is Arkansas Code Annotated 1572-305. It is Section A-3. It says one-eighth of all gas sold on or after the first day of the calendar month next ensuing after March 6, 1985, from any such unit shall be considered royalty gas
and the net proceeds received from the sale thereof shall be distributed to the owners of the marketable title and into the leasehold royalty, and royalty as defined under 1572-304-D, and it goes on, but that's where net is mentioned. There is another portion, and I don't want to belabor it. It's a complicated process, which I've talked about before. So the other working interest owners who are not the operator who sell their own gas and pay over those proceeds to the operator for distributing the blended royalty.
There's another part of that same statute that tells them what they can do. And if you'll give me one second, I'll read it to you because then it's all
Speaker 290
1:26:51
blended together and paid out. Yes, this
Alan Perkins
Unverified
1:26:55
is in, got to get my sections right, I think it's little A, big B, little I, commencing
no later than six months after the date of the first sale, and thereafter no later than the earlier 30 days after first payment is received. I'm going to skip through some of that, it's not important. Each working interest owner or marketing party who has sold gas shall remit or cause to be remitted to the operator, one-eighth of the revenue realized or royalty monies from gas sales computed at the mouth of the well, less all lawful deductions, including but not limited to all federal and state taxes levied upon the production of or proceeds, and shall indemnify
and hold the other working interest owner free from any liability, therefore. So that, in addition to saying less all lawful deductions, it uses the term of our at the well, and in oil and gas law in every state that I'm aware of when it sets the place where royalty is set at the well, deductions that come after that are allowed to be deducted from the proceeds because the sale doesn't actually occur at the well.
It occurs downstream in order to determine the price at the well, you have to deduct the costs between point A and point B. So there are actually two parts of the statute that speak to that. Thank you, sir. Yes. Any other
committee members? Seeing none, thank you very much for your
testimony. Thank you, Mr. Chair. Next is Rick Palone.
Rick Paloma
Unverified
1:28:46
Thank you, committee. My name is Rick Paloma, and
I'm a retired air traffic controller, commercial real estate owner, mineral owner. I'm a registered professional landman with the American Association of Professional Landmen. I'm a former vice president of Central Arkansas Landman Association, and I'm a current vice president of the Fort Smith Landman Association. A couple weeks ago, I received an email from John Allison from Firethorn Petroleum LLC in Houston,
wanted to know if I would lease or sell my minerals. We had a phone call discussion afterwards, and he said he had some investors wanting to invest $60 million in the Fayetteville shell, and that he had sat down with Flywheel trying to work out a farm out. He said they were real receptive at first, and here lately they've gone dark on him. And he followed it up with another phone call last Friday and wanted to know if I would do some leasing for him in about 20 sections.
And I told him that I'd never leased for anybody. The reason I became a land man was I was buying minerals and I was trying to learn all I could about the industry. And I said, but I couldn't advise anybody today to sign a lease with anybody because of what's going on right now. I said, they're not honoring their leases. And he said, well, if we signed a gross lease, we would honor it. And I said, I understand, but if you sold that lease, The next person that bought it might not honor it.
And I said, until we get this statute fixed, I wouldn't advise anybody to sign a lease anywhere in the state of Arkansas. So he then told me that Flywheel had just sold part of their company to Gunvor. And he told me he had read an article on Bloomberg. So I got on the Internet, I looked it up, and said, effective last June of 2024, that Flywheel had sold 42% of their company to Gunvor.
And I got to doing a little research on this Gunvor group, and they have been a bad actor. They have been fined by the U.S. Justice Department. They've been fined by Switzerland. And then last Friday I received another phone call, and I was told that all the founders of Flywheel had stepped down effective yet Monday and that their initial investor in their private equity group was also gone.
So this is changing really, really fast. And I did a little research, and it said that in March of 2024, the U.S. DOJ, Gunvor had pled guilty, and the U.S. DOJ fined them $661 million to resolve an investigation by the U.S. DOJ into violations of Foreign Corrupt Practice Act. On the same day, the Office of Attorney General of Switzerland announced a parallel resolution of its own investigation into Gunvor's misconduct that involved payment of approximately...
Senator Steve Crowell
Unverified
1:31:56
Mayor, let me interrupt. Your time is up. Thanks, sir. Questions from the committee? Can you finish what you were just saying, please, for me? Because
Rick Paloma
Unverified
1:32:06
I have a question on what just the last little bit you were trying to say. Okay. It's on investigation into Gunvor's misconduct that involved payment of approximately $98 million by Gunvor to Swiss authorities. This was reported that it's been
Senator Jonathan Dismang
Unverified
1:32:20
going on for over a decade. Senator Disping, you have a question? Who
Rick Paloma
Unverified
1:32:25
is Gunvor known to be associated with? So Gunvor was founded by a gentleman from Switzerland and a Russian oligarch that was good friends with Vladimir Putin.
And in 14, because of sanctions, they were oil traders in Russia, and because of sanctions in 14, the Russian oligarch sold his interest to the Switzerland gentleman. All right, so I've got a question. You
Senator Jonathan Dismang
Unverified
1:32:53
were talking about the value of leases. And so, I mean, these are marketable things. I mean, you can sell your royalties and they have a value. And typically that value is based on what's in the lease. That's correct.
And a gross lease carries a lot more value than a non-gross lease. Yes. And that's been the way that it's always been until now. Yes. And now there's an interpretation by an entity that's gone through some legal process. And, by the way, there have been federal interpretations that are under nondisclosures that have, well, gone different directions. But what does this do to the value, not just the royalty payments they receive, because I can demonstrate and show you what's going to happen with that when I have a chance to testify,
but what does this do to the marketable value of those leases?
Rick Paloma
Unverified
1:33:47
It drastically reduces the value of them because they're based on how much money that you're drawing. from those
Senator Jonathan Dismang
Unverified
1:33:53
leases? So 10 years ago, you had a gross lease. And let's just say all things are constant, royalty income's constant. And it's interpreted by everyone that's in the business that it's a gross lease and this one-eighth does not come into play. No one contemplates that to
be a decision when they're working through it. And now we go to today, when this interpretation is out there and it's not being reconciled by us providing clarification I mean to meet it appears on paper it's about half of the total net income to a royalty owner would it be reasonable to think that those royalty interest or those royalty values are cut by virtually the same amount overnight yes any other
question from committee Would banks loan on royalty interest? In West Texas,
Rick Paloma
Unverified
1:34:48
I do. I don't know of anybody in Arkansas that does. The only reason I know in West Texas is we
Speaker 306
1:34:54
bought some minerals and the bank had a
Senator Jonathan Dismang
Unverified
1:34:57
lien against them. And so if a bank had known, and you can because I'm familiar in Arkansas, but they do too, but a bank values a royalty interest at a certain amount, based on the understanding that everyone has on what net proceeds are
and what gross leases are, what happens? I mean, what happens to those borrowed, those leveraged royalty interest now? Because, I mean, again, they're worth half of what they would have been under
a well-known interpretation. I'm sure the bank would probably call a note. I think we probably need to be checking that out. Any
other questions? Okay. Thank you very much for your testimony. Thank you. Jim Rankin.
Mr. Rankin is speaking against the bill, if you would introduce yourself. Yes, sir.
Jim Rankin
Unverified
1:35:56
Mr. Chairman, my name is Jim Rankin. I'm an oil and gas attorney. My partner is Alan Perkins, and we work PPGMR. Over the weekend, I became aware of these Internet posts that were discussing some foreign involvement, and Mr. Paloma just sat here and told you all about it. What I wanted to come up here and address on behalf of Flywheel was it's well-timed.
Earlier today, you heard testimony about foreign ownership of agricultural properties, And I think that that strategy was here to capitalize on the anti-foreign ownership ideas that you heard earlier. But what I want to remind the committee, since we're talking about websites, I've got a website on my phone from the WhiteHouse.gov that President Donald Trump encourages foreign investment while protecting national security. Nothing that has been discussed in the postings online and certainly by Mr. Paloma or anybody else suggests that there's a national security issue with Flywheel getting some foreign investment, which is allowing it to move forward with its development of more drilling, more production.
That's all going to benefit the royalty owners. It's going to benefit the counties and the state with more tax basis. It's also going to benefit the entire state of Arkansas. But what I was able to determine with just a minimal amount of research online about this oligarch founder was that over 10 years ago, he was ousted from Gunbar. When it became clear that he was going to be the source of possible sanctions, his partners ousted him from the company, and now that company is Swiss-owned. It is not Russian-owned.
The bribery allegations that were set out in that article, those were all pre-flywheel involvement, some of them going back to 2012, 2014. and in no place did someone suggest that there was an attempted bribery of a U.S. official. That all happened in Ecuador. It happened in Africa. And that article references former consultants, former employees. So no one associated with it now that I could find online has been involved in that type of activity. It all happened years ago and in most cases over 10 years ago.
The investment by this minority investor of about 42% of the ownership position It gives Flywheel the ability to move forward with its drilling programs that have been part of the news cycle lately and kick back off the drilling that had gone dormant and stagnant for so long. Flywheel management is still in control of Flywheel. That is American-based, and those people are in control of the company. Mr. Paloma also mentioned an exit of the organizers and buyers.
What I can tell you is that a handful of the flywheel executives have decided to move on to other things. I think it's absolutely coincidence that it comes up today when this investment. Let me tell you your time is up. I'm
like Senator Kroll on the previous witness. I'd like for you to finish your thought process. Yes, sir. What you're doing.
Jim Rankin
Unverified
1:39:10
The leadership leaving is not in any way related to the investment by a minority investor. That's all I can tell you about that. And, you know, with that, I would conclude my remarks.
Senator Jimmy Hickey, Jr
Unverified
1:39:22
Okay. Questions, Senator Hickey? Yeah, just one, and again, I mean, I heard this has been brought up. I don't know how it relates back to what we're trying to do with this net proceeds and whether or not that, you know, is defined specifically enough, you know, within these cases. But I guess this is my thing, though, to ask, since this has been brought up, are all of these leases, I guess, are negotiable instruments?
Are they all written that way so that they can be bought and sold out in the open market? Anyway, I mean...
Jim Rankin
Unverified
1:39:53
I can't make that jump, but I can tell you there's a uniformity to them. Okay. And the companies, whoever that company is out there leasing, will typically use
Senator Jimmy Hickey, Jr
Unverified
1:40:01
the same lease for them. Okay. I mean, I guess specifically if somebody wanted to negotiate that this lease would not be sold or anything and would be maintained by that corporation, maybe they could do it. I don't know. I
Jim Rankin
Unverified
1:40:14
mean... Well, anything can be negotiated and put in a contract. I will tell you that almost all of these leases have assignment provisions that they can
Senator Jimmy Hickey, Jr
Unverified
1:40:21
be assigned. That was my question, I guess, about them being, you know, if they're negotiable instruments,
then they can be assigned to other companies.
Jim Rankin
Unverified
1:40:28
But you would want that. You would want them to be assignable so that the next producer could operate
Speaker 280
1:40:33
under them. Sure. I understand. Thank you. Any other questions? Seeing none, thank
you very much. Thank you, sir. Next, Nathan Morgan. Would you hold on a second?
Senator Jonathan Dismang
Unverified
1:40:56
Yes, you're recognized, Senator Dismay. Would it be possible to have the Oil and Gas Commission or representative from the Oil and Gas Commission for questions at some point? I think it would be important to know. Does anyone here from the Oil and Gas Commission? I'm out in the hall. Would you like to step out
Speaker 301
1:41:15
there and see if you're there? You don't have to, but at some point... That's fine, we'll, we'll.
Okay. You want to wait on oil and gas? We'll go ahead. Mr. Morgan, introduce yourself
Speaker 319
1:41:40
for the record. Nathan Morgan, I'm an oil and gas attorney. in Clinton, Arkansas. I represent the royalty owners of the Fayetteville Shale. I've already testified before the committee in the prior meeting, and so I don't want to belay some of those points. One clarification I wanted to clear up as far as Mr. Perkins' testimony in regard to are all producers doing that? They are not. He named a lot of parties who were named in the
federal lawsuit flywheel energy was the operator of all of those uh of all of those wells they were the the different working interest owners were named in that lawsuit because they had to be as they were they were the contract holders in that unit they were not the ones uh sending out the royalty that was actually flywheel energy um so i wanted to clarify that uh secondly um as mr robinette said the purpose of this bill is to define net proceeds um in uh 1572 305 a3 it's a
very limited part of this bill it does not affect oil we made sure of that um that liquid hydro carbons were not included in the bill when all of these leases were signed um there was a there was a treatise out there and it was actually linked in the Arkansas Oil and Gas Commission website. When you go to the Arkansas Oil and Gas Commission website, it has a link for royalty owners so they can become educated on how to lease their minerals. Some of them go to an attorney, some of them handle it themselves.
The treatise was actually written by Chuck Morgan, who's an attorney out of Texarkana. He has since, and well respected in the industry, he has since passed away. The actual treatise is still on, as of today still on the arkansas oil and gas commission website and in the treatise um mr morgan and i have it right here it's the arkansas leasing manual this is what everybody uses in the industry um when they're negotiating leases nowhere in this manual does it say that you can't lease
eight eight eights of your minerals and essentially flywheel's interpretation of the statute is saying a landowner in Arkansas doesn't have the right to lease eight eighths of their minerals they only have the right to lease seven eighths of their minerals that is their interpretation of this statute as you've heard there's a line of federal court cases and there is a line of state court cases so essentially three Arkansas Court of Appeals
judges have looked at this statute and they have interpreted net proceeds as it is defined in Arkansas 1572 305 a3 as ambiguous and so we are asking the all we're asking the legislature to do is to define net proceeds and what is in the bill defines net proceeds essentially for integrated owners as the Arkansas Oil and Gas Lease Forum. Your time is up, sir.
You have a question from the committee. Seeing none, thank you for your
testimony. Okay, I don't have anyone else signed up against. I have
Jimmy Hart. Mr. Hart, your microphone on his own if you
Speaker 322
1:45:16
would recognize yourself thank you mr chairman my name is jimmy hart conway county judge in my 25th year i want to take
Speaker 323
1:45:23
you back just a little bit because somebody
mentioned that a while ago and uh about the fayetteville shell and the start of it in southwest energy uh you know but i do want to hit on one thing you know we're here today to discuss something because there's some large vagueness within this statute uh because what they basically say is you the legislature's one that controls that first one-eighth my real problem is this is what is that one-eighth who does really determine that everybody's got an opinion we've
seen that today but when we get right down to it it comes down to us all working together to figure out what's going on primarily we've got to take and work really hard to figure out what this is all about and number one i've always been this way i'm still this way i'm gonna look out for arkansas people that take and elect us all to elected office there's 40 000 royalty owners out here folks and not all of them are arkansas but a whole bunch of them are and not all of them they're and it's not disconfined to the fayetteville shell there's royalty owners i bet
you if you go back to your counties and every county in this state that's got a piece of the Fayetteville shell intact. We've always got to take and look out for the interests of those folks. We've got to figure out what we need to do for that, but we always come back to square one. We've got to look out for people that we represent, and that is the people of the state of Arkansas. I've seen this thing all these years. It's just tumbled and changed, but I go back to this, property rights and contracts property rights are in a place for a reason they're property rights
these minerals are property right these contracts most time my daddy always taught me better be careful when you sign a contract because when you sign it you own it you live up to it and that's what i'd like to say today we need to make sure that's in that's that's enforced you want to have questions
Senator Jimmy Hickey, Jr
Unverified
1:47:28
and i apologize you may maybe i should have asked one of these other attorneys it's just come to my head i guess what i'm i'm looking at is if we pass this today and i wouldn't mind
getting them back up here this is so important but what are we expecting to happen because i'm sitting here and i've already heard testimony that this isn't going to be retroactive no sir you're correct all right so we're going to have a we're going to have a new statute that's on the books everything that the
old statute was when the when the contracts were signed is going to be covered under that old statute. I think we've seen that time and time and time again. And
I agree with this gentleman over here about, you know, the constitutionality of that. And that's where
I'm at with this. So are we trying to force another lawsuit? Is that what we're, what are we trying to do? We're planning for the future, sir. Planning for the future. So let me ask this then so are you saying then because this is the way i'm interpreted in here is that all of those leases that are currently in place are going to be under this it sounds like this interpretation that the court the courts have already had and then any new leases that are going to go forward
from the date the governor signs this are going to be under this new proceeds is that what you're trying
Speaker 323
1:48:50
to say what we're trying to say is clarification of a one-eighth because technically Right now with the 1A, sir, basically it's not a 1A. When you do the deductions on this thing, these royalty
Speaker 329
1:49:01
owners are getting somewhere between 5.5% and 5.75% of the perceived 12.5% lease. Okay. But we
Senator Jimmy Hickey, Jr
Unverified
1:49:09
already heard that these courts, they've already either heard it or are refusing to hear it because of the ambiguity of the law that's in place.
And we're sitting here, and we have heard this time and time again. Senator Disney and I, we may make a tax cut retroactive, but I don't think that makes any difference because, you know, it's the money of the state and it's going back to the citizens of the state. But we've seen this with some criminal stuff that we've done where, you know, we've maybe been a little, or past legislatures have put in penalties, and those people are in jail now, and there's other people that have committed the same crime, and they're getting out quicker.
So I guess I'm at a waltz as to what this is truly going to accomplish. Because I'm hearing basically from both sides that this is not retroactive. I don't know how it's going to change. So if we are going to put it in place today, or excuse me, when the governor signs it, If we pass this out of here, pass this out of the Senate, all of these leases here, are these leases that are down here,
do they have a clause in them
that says they're good for three years or five years? Are they
Speaker 323
1:50:29
from now on? Senator, it comes down, I'm going to say it one more time, to the interpretation. Everybody's got a different opinion of the interpretation. But it's clear to me, and I'm going to take you even further back to 2016, 17, 18. We talk about litigation with the Oil and Gas Commission that basically took on Flywheel. There's also another lawsuit nobody wants to talk about, and that's the one with Southwest Energy, prior to Southwest Energy, selling it out to Flywheel Energy to settle an $8 million lawsuit
because basically they didn't do anything wrong, but they paid out not hardly $8 million, but like $7.965 million because we didn't do anything wrong. Well, and if there was a
Senator Jimmy Hickey, Jr
Unverified
1:51:05
settlement or whatever, that's a settlement, and that was what it's agreed on, and I don't know if there's some confidentiality agreements in that or
not, so I'm not looking to go there. That file case is four foot thick. Fair
Senator Breanne Davis
Unverified
1:51:18
enough. Senator Hickey, and I don't mind if you want an attorney to come back up and answer the question in more legalese, but it's not retroactive in the sense. Would you?
Senator Jimmy Hickey, Jr
Unverified
1:51:28
I would, but I'd like for both sides because, I mean, and again, I know they're going to have two different opinions, but I don't think that this legislature, I mean, we've seen this with this
retroactivity stuff, I'm just trying to do what I feel is according to a contract. I understand why these people are upset. Can I
Speaker 323
1:51:50
say one thing? Yes, sir. Let me say this. In 2019, I've got it. He's a CPA, and I wish he was here today. When this thing started in earnest in 2005, everything has changed because what it used to,
they'd take 14% in deductions, and today they take 44% to 50% in deductions. It depends on who you are and where you're at. I mean, the problem with it is the royalty owner signed an honest, hard-binding contract that's on file in every courthouse in the Fayetteville shell and other places, too. And the problem with it, it's something, and I'm going to say this, I'm glad the oil and gas commission's here today, because we sat down in a three-hour meeting with DF&A where this started with me was on severance tax. Because I sat in Washington 2022, a severance tax go from...
Speaker 329
1:52:35
Sir, let's stay on this bill, not severance tax. But anyway, I'm going to say it, things have changed. Thanks for
answering my question. Thank you, sir. All right. Do you have a question, sir? Yes, sir, you're still signing? I assume you want to go
last since you put down the file. It doesn't matter. I'd let
Speaker 341
1:53:02
you go first if you'd requested it. Let me ask you this. Senator
Senator Jimmy Hickey, Jr
Unverified
1:53:06
Caldwell, as chairman, could we get both the sides of the attorneys
who represent them. I'd like for them to answer my question what we're trying to force here. We're going to run
up against a timeout. We're going up against a time frame. I'll allow them to come back for approximately three. I don't want to get into a 15-minute discussion. I understand. We're going to run up. We've got going to session at one o'clock. Senator Dismayne wants to testify. Okay. Senator Davis, you call your attorney back up, please. Which one, Senator Hickey, are you wanting? I don't care. Do you want to come
Senator Jimmy Hickey, Jr
Unverified
1:53:35
up? You seem like you are, Mr. Robinette, whoever. Mr. Robinette? mr robinette came up first we'll we'll
if that's who you want to we'll call him back up
Speaker 176
1:53:45
just start just i i want i want to give uh fair hearing so but there again we're going
up against a time stop and and so we're going to turn the timer
on i'm not going to be hard make a hard stop but i want to give both sides a fair rebuttal so mr robinette if you would come to the table Well, Senator Tia has a question. Let me ask my question before. I want to
Senator Jimmy Hickey, Jr
Unverified
1:54:12
make sure he understands what I'm trying to say.
Introduce yourself again. Yes, Mark Robidette, oil and gas. Thank you, Senator Tia, you recognize. And I understand that you attorneys are about as bad as us politicians that want to give these long answers, but this is what I'm looking from you all. And if you disagree with what I've said, I want to know. So we're going to put a statute in place that's going to start upon the signature of the governor. It's got an emergency clause. No, it doesn't have an emergency clause. It's going to start whatever that dedicated time is, and
that will then become the statute at that specific point in time.
What are you all thinking that whenever that happens that you're going to accomplish with these, with these leases that are under the statute that you all are saying is ambiguous? What do you believe is going to happen at that point, or what's y'all's intentions? What if the company says, nope, we were under the old law, that's when that was signed? What are you anticipating?
Speaker 251
1:55:21
Okay, so, Senator Hickey, first of all, this doesn't change any lease. It just affirms all the leases. So, what we're changing here is accounting. We're changing a general rule of conduct. This is what you're supposed to do with these monies before you pay them out. Okay? So anything that's already been done, the time this goes into effect, that's in the past. Okay?
There could still be lawsuits under the old law fighting about whether something was owed. You know, this is what we thought it meant at the time, or we love or not. Sure. But everything going forward, we've changed the conduct. the operator in the unit to where now they're going to pay upon the underlying leases terms and that is the way it goes forward from there okay so let me ask let me
Senator Jimmy Hickey, Jr
Unverified
1:56:15
ask this and I understand you gave him all the time and I want to be respectful of that so I assume you're going to disagree with this other guy
over here that the courts have already ruled that whether or not that was in the contract or was not in the contract because
we've passed a statute down here that that's going to hold true,
and that's going to be a part of it. So do you disagree with what his testimony
Speaker 251
1:56:45
is on that? I disagree that the laws at the time of the contract being signed somehow become a vested and permanent right in the contract
insofar as it deals with the party's conduct, their general rules of conduct here. These are not, we're not rewriting any contracts. So remember, you is the state. You, indeed, your laws are read into the contracts, yes, at the time they're made. But those laws can change. That's why you have police power. That's why you're able to change laws. If we couldn't do this, we couldn't have even had the 1985 Act because, you know, Senator, there were oil and gas leases filed and of record then.
They were working on a certain system then. The state came in and totally changed that. And in fact, really changed all the conduct under those leases. You have the power as the state to change the rules. You're not impairing any contracts. A classic contract impairment would be something like having some bonds. And the bonds pledge very specific revenues. Let's say you had a toll road, and the toll road revenues go to the bonds.
People buy the bonds, which are a negotiable instrument. Oil and gas leases aren't. Oil and gas leases are just merely memorandums of interest in property. So you have these bonds, and say we have a stream of revenue pledged to it. Well, the state can't later come back and say, okay, we're no longer. So that's an impairment of contract. 100% because you're changing everything that everybody relied upon in making that deal.
So remember, you're acting under your police power. You're not trying to rewrite a bunch of contracts here. You're just changing the party's conduct, no different than an insurance
Speaker 259
1:58:47
regulation. I got his opinion, and I appreciate it. Okay,
Senator, no problem. Thank you. Mr. Perkins, would you come back to the table,
Speaker 294
1:59:04
please? Thank you, Mr. Chairman. Alan Perkins.
Speaker 358
1:59:08
Do you need me to restate that? We do
Alan Perkins
Unverified
1:59:11
not. Okay. So there is confusion about what retroactivity means here. They think it means it won't be retroactive, so it won't affect payments that happened before the bill becomes effective. But they do intend for it to be retroactive in terms of applying to leases that existed before the bill passed. And that's what makes it unconstitutional. Say that one more time on that.
So those Fayetteville shale leases are in existence today. I understand. Since 1985 and forward, correct? It applies to them, and I frankly don't think there's any question that the statute creates an obligation in those contracts. That's what you can't change. That would be a retroactive application to a contract that preexisted the statute. All right. And that's
Senator Jimmy Hickey, Jr
Unverified
2:00:02
where I'm at. Now I want to ask you another question to make sure I'm not confused, if that's okay. All right. Did
you tell me, or has there been a court case that's been decided, and
by who, that that one-eighth that we have in there is allowed to be taken?
Alan Perkins
Unverified
2:00:23
Yes. There have been six decisions in federal court to that extent, yes, for private leases, not integrated ones.
Senator Jimmy Hickey, Jr
Unverified
2:00:35
Well, we're not talking about the integrated, are we? We're talking about the non-integrated
anyway. Correct. So the non-integrated is a private lease, correct? That is correct. Okay. And all of those have said that there is a 1-8 that's allowed to come out? Yes, sir. Okay. That's where I think I've got
my question answered at this point.
Alan Perkins
Unverified
2:00:56
I would just add, you know, the Arkansas Bar Association voted to oppose this bill formally. They sent a letter to Chairman Caldwell on March 19th for this very reason, that it's unconstitutional. All right, thank you.
Speaker 281
2:01:13
Question? Yes. All right, so my question is, and
Senator Jonathan Dismang
Unverified
2:01:17
I guess it's really just more of the nuance of how this works. So a court decision changed the way that these payments have been made historically, correct?
I mean, or is it allowing one entity to have a different interpretation than everyone else that entered into
Alan Perkins
Unverified
2:01:42
those agreements prior to? The court decisions construed the meaning of the statute and said that the operators who are paying the first one-eighth based on net proceeds is correct. So
Senator Jonathan Dismang
Unverified
2:01:54
everything, though, but now they can't take that court decision, the company, and go back and
Chesapeake can't go collect all its underpayment that it had
or overpayment that it had in relation to royalties, right? Well, Chesapeake's been gone for far too long. Well, you understand the question, I believe. Can a prior company that was overpaying, per your interpretation now, royalty owners go back and
Alan Perkins
Unverified
2:02:25
collect all that overpaid royalty? They would have to sue their lessors to go back in time for the statutory limitations period of five years.
Senator Jonathan Dismang
Unverified
2:02:35
This goes back to the point on the contract in time and us kind of setting the rules of that contract.
So thank you. It's no different than what the rules are. Anyone else have a question? If not, thank you
Speaker 99
2:02:53
very much. Thank you, Mr. Chairman. Steve Smith. Thank
Speaker 374
2:03:02
you very much. I'll be very brief.
My name is Steve Smith. I'm president of the Royalty Owners Association for the Fayetteville Shale. Just a couple items. I won't rehash the whole thing. We've heard a lot about it. But with regard to other operators within the shale, Mr. Perkins mentioned XTO. XTO did hold out expenses from gross royalty owners. When they were confronted on that, they repaid those royalty owners the fees that they had deducted
because they had changed their pay deck and somehow started charging against gross leases, and XTO went back and fixed it. There's people sitting behind me that got checks right now. Okay, number two, their business model is this. Nobody ever took, this is a novel interpretation of that law. They got lucky that one federal judge chose to override the decision about state law that our court of appeals decided. Our Arkansas law was decided by the court of appeals and a federal judge because it was a class action suit.
And here's why it has to be a class action suit. They've got a ton of money, and we've got a bunch of little royalty owners that can't afford to sue them in state court and win. And the only way to do it is a class action. They got lucky and got a judge that ruled incorrectly. And so our royalty owners don't have the option of going to a class action suit, which would solve it. They don't have that option because they've got one judge, whereas the Court of Appeals interpreting Arkansas law ruled correctly. And so we could go sue him in the state court, but we can't afford to.
So their business model is we're going to do what we want, and the little guy can't do anything about it because he can't afford to. It's truly a David and Goliath situation, and I just would urge you to support the royalty owners in our state. They've got millions, and each of these royalty owners are too small to sue and
Senator Jimmy Hickey, Jr
Unverified
2:05:06
get their money back. Thank you very much. So you're telling me
that, I understand I don't want to, but that each of these individual leaseholders,
that they couldn't combine and be a party to a lawsuit against them? No, because it
Speaker 374
2:05:19
reverts. I'll let the attorneys answer this, but I believe it reverts to federal court when it becomes a class action. Is that correct? I don't think I can testify. Oh, okay. Is that because they're out of state? I think it might be because it's interesting. I'm not a lawyer, so I'm
Senator Jimmy Hickey, Jr
Unverified
2:05:39
not quite familiar, but I do understand. Because there's more parties and then it's be interstate or whatever.
Speaker 374
2:05:43
A federal judge was supposed to rule according to state law.
Okay. And the federal judge decided he knew more about it than the Arkansas Court of Appeals, what the Supreme Court would do if they
heard it. Thank you. Any other questions? Seeing none, thank you. Senator Dismain? Thank you. We have a handout from Senator Dismain. Senator
Disman, before you start, I want to take a one-minute break.
Unknown speaker
2:06:25
Okay. I have a copy. Thank you.
Thank you.
Maria.
Thank you.
Speaker 217
2:08:36
Okay, we're back in order. Senator Dismang,
turn your mic on, please. Introduce yourself for the record. Senator Jonathan Dismang, District 18. All right, thank
Senator Jonathan Dismang
Unverified
2:08:55
you. Members, one of the things that
I really wanted to see from the last meeting that we had was really for you to see what's happened.
So you're going to see in front of you, SWN's got their CCO's got their pay sheet here for the exact same royalty owner. All right, this check is dated 2018. The total royalty at the time to be paid was $295. That's very small. $295, and the total payout was $287. This is a gross lease. Okay. Let's fast
forward, look at the other sheet. because I think it's important for you to see what's happening to the people in my district.
All right, so the total payout on this was actually, the royalty was $386. The net back to that same royalty with the same exact lease, just happens to be a different company, is $178. That is the impact our inaction will have on my constituents. The one thing that I can promise you is that when my royalty owners, the people in my district, receive those checks, guess where they reinvest it? Back into their ground, back into their homes, back into their livelihood, back into their businesses.
What we've been able to do because of the Fayetteville shale, I think, is incredibly important. And what we've been able to churn in our economy has been tremendous. And we're essentially cutting that in half. I mentioned earlier that royalties are something you can borrow against. It's property that you own. Overnight, that valuation was cut in half based on the decision of Flywheel to take it to a different level.
Senator Hickey, you can only imagine what that would be like to a banker to take a look at that. We valued something at X based on the income that was derived off of that property. And overnight, someone took a lease that's been interpreted and understood for a decade and decided they're going to interpret it differently. I just hope, and I think I would love for the Oil and Gas Commission to come because I think what they would testify to is what's in this bill just brings us back to the status quo that was understood prior to this federal ruling.
And that's all I'm asking you to do. I'm not asking that we give royalty owners some upper hand that they don't deserve. I'm asking you to just let them have what they had, what they agreed to in the lease. I thought it was funny. I hadn't heard Charles Morgan's name in a long time. But I remember coming and him helping draft these leases in White County and really all over the state as a person that was an expert that we relied on. And he said here today, he'd tell you that these leases were the leases. And a gross lease is a gross lease.
And whatever, mealy-mouthed, lawyerized, whatever we want to say, At the end of the day, that doesn't do right by the people in my district that own these properties. Thank
Speaker 99
2:12:01
you. Well, you had two seconds left. You
did a good job. Thank you. Okay, Senator Disbang, we have questions for Senator Disbang.
Seeing none, thank you very much for
Senator Jimmy Hickey, Jr
Unverified
2:12:14
that. So, Senator Disbang, let me just ask you. You don't think that this would make anything retroactive, though, do you?
Senator Jonathan Dismang
Unverified
2:12:22
I don't think it makes anything any more retroactive than the court ruling. You'd have to go back and try to sue to be able to collect those additional
dollars. This would be allowing for an interpretation, which is our job. We do this all the time. We provide interpretations. I can go back in the fracking. We can talk about the fate bill, Shell. And it's back when the state of Arkansas decided they were going to charge sales tax on the sand that we put in the ground. This body decided that we were going to go ahead and clarify that sand was not subject to sales tax. We have the right to provide interpretation.
Senator Jimmy Hickey, Jr
Unverified
2:12:52
No, not to mislead you. You and I both know that when things get in court, it's legislative intent. So, and obviously it's live streamed in here. And I want to know, and that's the reason I'm asking, you wanted to testify, is that if we pass this,
because I'm not passed, I haven't made up my decision on this. I am literally trying to do what I feel is the correct thing according to what the statute was. but i want i want us to say in here because i'm going to say that my legislative intent
is that anything that whenever we do this it's not going to make anything retroactive and as you as a member of this committee
Speaker 391
2:13:30
i think that's what you just said too correct but i would not prohibit some from someone going and trying to collect those additional monies from the past they all they all have the right to to go to to go to court is what you're saying
Senator Jimmy Hickey, Jr
Unverified
2:13:43
right okay yeah I think we all agree to that. I'm just wanting to be specific that whatever we're doing today is going to be a statute that's going to go forward. And if some court, if somebody wants to go back and do that, that's up to them.
And that was my question to those other guys. What are we trying to do right now? I'm sympathetic to a little bit to what's going on right here. It's not about that. It's just about the legal part of it for me. Well, you know, because I keep hearing you say the bank. Yeah. I mean, it's if I was there and thought that, but then I'll also remember from the first comment, you know, just because that there is a contract and somebody holds it, they may not be fully utilizing everything within it.
But that doesn't mean once it's assigned or sold or whatever is done, that the next person cannot utilize and do that. I mean, if we used a late fee with a mortgage before. So if somebody is, it would be a percent normally, but if somebody says, well, they're going to be a $100 a month late fee, but the holder of that mortgage says, well, I'm only going to charge them $50. And then they sell it off, and the other one goes by the contract. They're allowed to do that and take it to $100. I mean, just because something has happened, and believe me, this doesn't look good, and I understand that,
but it gets emotional for these folks and us too. But if it's found that they were under that old contract and the eighth could be taken out, that's just going to be the way it will be. Any new leases, I agree that once we pass this, is that they would be under this new statute.
Senator Jonathan Dismang
Unverified
2:15:28
So if there's a final decision by court, and we've gone through all the appeal process, both on fed and state level, then fine.
But what all I'm trying to do is there was an understood definition that was accepted by all parties for net proceeds that one entity has used the courts to redefine. And you don't need me to, again, give you some jargon about it. Just look at the sheets. Do you think SECO would have been paying for monies that they shouldn't pay out if they didn't have to? Absolutely not.
But it was understood by everyone, the attorneys on both sides, when those contracts were written up that gross meant gross. I'm not... Anyway, I'm good with
Senator Jimmy Hickey, Jr
Unverified
2:16:22
that. I do think that Senator Dissemang had a good thing. I would like to hear from the Oil and Gas Commission, so if we need a motion for that or
if we can request it or whatever,
I want to do that. I'll rule on that. I've got the authority Are they here?
You're moving down there with so much enthusiasm
Speaker 94
2:16:48
You would please sir turn your microphone on and introduce
yourself and I'm going to let Senator Hickey ask a question Senator Disbank can ask a question either one just pull the bass to you All right. Shane
Speaker 396
2:17:08
Corey, I'm the secretary for the Arkansas Department of Energy Environment, which includes, among other entities, the Arkansas Oil and Gas Commission.
Senator Jonathan Dismang
Unverified
2:17:16
So we've had some conversations, and I've had conversations with producers and whoever else, because it is not my goal that we rewrite something and create some new process that wasn't followed 10 years ago. And so my question is, the way that this is written, does it get out of line to the generally accepted way that we define net proceeds historically when we were creating contracts and how they were to be paid? I would try not to give
Speaker 397
2:17:46
a legalese answer, but I am an attorney.
So generally speaking, I believe that this is written in a way with the intent to restore payments to the way they were processed and paid prior to 2019. I mean, I can go into history. I had the, I guess, the responsibility of defending the Oil and Gas Commission in an action that was brought before the action between or for the integrated parties, which are separate and apart from the privatized lease parties. So I can talk with a lot more knowledge and substance about the integrated parties and the Arkansas court ruling and how those differ from the federal cases.
But I was involved specifically on the integrated party side. I don't think there's any dispute. Everybody in this room, including Flywheel, will tell you that there was a change in 2019 based on their interpretation. And that's the same thing that came out in why we brought the oil and gas commission action is they made a change to the way they paid royalty payments based on their review of the statute and some other federal cases that had happened. And they made a decision to make a change in the way payments had been processed. So they didn't do it to just privatize parties.
that same change also affected the integrated parties. We had told people on the oil and gas commission side for years that if you're integrated, they were only allowed to deduct taxes, assessments, and true third-party costs. So a similar thing happened when they made a change that they were able to deduct additional post-production expenses at that point in time. We brought that action before the commission. The commission upheld staff's interpretation. That was upheld by a circuit court, And eventually, the Arkansas Court of Appeals, that as to integrated parties, they could only deduct taxes, assessments, and true third-party charges.
That's one line of cases. Flywheel and the other parties on the private side went through, and you've heard all about this, and I don't claim to be an expert, nor do I want to rehash what happened in those federal cases. But the federal cases have interpreted the law at this point in time to say that those additional post-production expenses, in their opinion, are authorized under the current version of the law. But I don't think anybody disputes that we all knew what it was. We all had that same in 2019.
A new company came in. I understand they did their due diligence. They did investigations. They looked at the current status. And they made a different opinion. And as to integrated parties, that was not allowed as to privatized parties or leases with private parties. The federal courts have allowed that. Were you in here
Senator Jimmy Hickey, Jr
Unverified
2:20:28
whenever you heard some of the testimony about the at-the-well and those type expenses and things like that, the way that those leases were done?
I've tried not to be in here. You know what I'm talking about, though, and I don't blame you for dodging it. But, but that's what you sit there
Speaker 397
2:20:48
for. So I, I did not hear that testimony, but I'm familiar with an at the
Speaker 392
2:20:53
well process. Okay. So you know what the issue is with that? You
Senator Jimmy Hickey, Jr
Unverified
2:21:00
can expand on it. I know you're knowledgeable enough to do that. So what, what's maybe if
Speaker 399
2:21:06
you ask me the specific question, maybe that, I don't know.
Senator Jimmy Hickey, Jr
Unverified
2:21:10
Right. So if it's at the well, it is the way that it was written.
And then you've got the statute in place, which says the 1-8th, how do we decipher
Speaker 397
2:21:27
between that? I don't know that you have to decipher between that to give a policy decision where you are at
Speaker 400
2:21:36
this point. Yeah, I know that, but we're... I think the 1-8, so part of that decision, when they made a decision to change paying what had been recognized as gross leases prior to 2019, they were paying, Southwestern was paying, a gross lease piece.
In 2019, when they made that decision, they then started deducting additional costs from what had historically been recognized
Speaker 397
2:21:59
as a gross lease. So from the current version of the statute of 1985, I wasn't with the commission there, but I was in the early 2000s, until 2019, if you had a gross lease, you received more of your royalty because they weren't allowed to take post-production expenses. In 2019, they recognized and made the decision that under their version of the law, not saying
it's right or wrong, but under their interpretation, that they could take out additional expenses because the one-eighth net basically superseded or trumped the one-eighth in the lease. And that's what the federal courts, I mean, this is me summarizing, but that's what they have recognized and allowed as permissible. I think, Senator Hickey, I've been in here long enough to hear your questions, and I don't know if this helps or hurts, if you understand. I think what the intent is, the intent is when we're talking about retroactivity,
I think the question really comes down to not whether the leases were taken, before this decision or after this decision in this committee, but how royalty payments under existing leases will be paid moving forward. And I think that's ultimately, I've heard Mr. Perkins, I know he believes that's unconstitutional, but that's also something that will be sorted out by the court system. But I think what the intent of this bill is, it's the same thing that we ultimately did with the Oil and Gas Commission, And that is we had a definitive decision that leases and royalties must be paid in a certain way.
And I think that's what the intent of this bill is here today is to clarify that. Now, whether or not there are lawsuits or challenges, I think that's yet to be seen. And I've heard Mr. Perkins talk about the unconstitutionality of that. But I don't think it's really, I don't want you to think that this decision only applies to leases taken after this point in time. I think it really is intended, and I think the lawsuit will be about whether or not this decision can apply to existing leases with payments moving forward after this bill, if it were to become a law, becomes a law.
Senator Jimmy Hickey, Jr
Unverified
2:24:04
You're very observant about what my next question was going to be,
because I was going to ask you, do you think this bill makes this retroactive? My answer is no, in
Speaker 397
2:24:14
the sense of payments, because I think it would only apply to payments moving
Speaker 400
2:24:18
forward. But that's different than whether it applies to a new lease or an old lease. It's the payments
Senator Jimmy Hickey, Jr
Unverified
2:24:25
under existing leases. Okay. Let me ask you another one since you are the ones that are over this. All right, so we passed this, and the company says, nope, we still believe that we have the right under the way that the old statue was done.
I'm just going to say it that way. This legislature has went in and now changed it to something different, which is fine. and they say, well, we're not going to send, we're going to continue to pay under the old. Do you all at that point have an obligation, or what are you all planning to do? Does that make sense?
Speaker 400
2:25:05
Sure, and I think the truthful answer is there is statutory authority
Speaker 397
2:25:09
the Oil and Gas Commission has to enforce royalty payments. However, it has always been our practice, if the issue is under litigation,
We will not take that up until the litigation is settled. So if someone filed a rotator complaint and there was no active lawsuit, we would start the investigation, start the process. If there is an appeal and a suit filed, then we would wait until a decision of the appropriate court has been issued. That's fair. Thank you, sir. Any
Speaker 31
2:25:36
other members have a question? Mr. Kerr, I appreciate
you coming up here. I bet you walk away more enthusiastically than what you walked up to the table.
last couple days. Okay, no other witnesses. Senator Davis, you recognize, close for
Senator Breanne Davis
Unverified
2:25:57
your bill. All right. Thank you, Mr. Chair. So just in closing, I just want to restate that we are clarifying the law. That's what we're shooting to do here. That's what we do every single day down here. It is our job. It is our actual job to clarify the law. It's not our job to mess with contracts and renegotiate contracts,
but to provide clarity in the law where there is no clarity to ensure that contracts are being executed correctly. We've worked on this bill specifically for the last three sessions, and every session we narrow it down more and more, tailor it based on feedback, based on complex legal conversations and court decisions, and that's what I think makes this a good bill. We've been working on it for so long to ensure that it is so specific to where it is just providing clarity and not messing with contracts or anybody else that does not have anything to do with this situation.
It's never, in fact, made it out of House Ag. And here we are today. It flew out of House Ag and flew off the House floor with 81 votes. And I know that doesn't necessarily mean anything in another chamber, but I think that just speaks to the work that we've done over the years to narrow this down to ensure that we are adequately representing these mineral right owners and making sure that their contracts are executed the way that they should be. So I think my ask just of the committee today, because you have spent so many hours on this, is that if you're on the fence, please vote yes.
Vote it out. Let's decide this on the Senate floor. I really think that people that live in these counties that have been impacted by this company and the way that they interpret the way the contract's written deserve a shot to have this heard on the Senate floor. So if you're on the fence, I just ask that you let us debate it out later this week. I think the arguments are clearly valid and show that there is no clarity in the law and we need to provide it and that it's not to be retroactive, but to be moving forward to ensure they're being paid correctly.
Speaker 14
2:28:07
With that, I'm closed. Thank you. Thank you. Do
we have a motion? What's the will of the committee? Motion do pass. Second. Second for Senator Scott. All in favor say that. I'm sorry, the discussion on the
Senator Jimmy Hickey, Jr
Unverified
2:28:27
motion. I heard what you said. You kept saying clarity, clarity, clarity, and I'm not for clarity, really. I mean, I want it from this forward, but I also heard
you at the very end. You said not to be retroactive, and I know I'm not supposed to be talking with her,
but that's what I heard. I know you're not supposed to be in this discussion. It's supposed to be between us. So, and that's where I'm at, because we all know that whatever legislative intent was, I cannot tell you what the legislative intent was back whenever these other legislators that are no longer around what they did. But as far as from this point forward, it's the way I'm looking at it whenever we vote on this bill. And I'm going to vote yes on this bill because of that point.
So, now, I think at that point, some of these arguments that these folks have made in here, I think you're going to wind right back up in court, and that's fine. We'll let them see what they decide, because I'm going to tell you, some of you all have confused me a little on purpose, I'm sure, you know, about what court case is what, where we're at in that process, whether or not Flywheel was represented ExxonMobil or ExxonMobil was their self. I mean, there's all type of questions that's outside of what this body's supposed to do with that.
But that's for a court to decide. So I'm going to be very clear that Jimmy Hickey's legislative intent is that we're just passing a statute that's going to clarify but not
be retroactive. Thank you. Any other discussion? Seeing none. Senator
Senator Matt Stone
Unverified
2:30:10
Stone? Just for clarity, I think legislative intent was to pay the first one-eighth on net proceeds.
I think there were contracts that were entered into that went past that. So I don't think they're asking for any back pay, but I think from this day forward, if this bill passes, they want to be paid the way they used to be paid. And I see people nodding their head, and I think that's going to let a contract override state law, So I'll be a no. Okay. We
have a motion and a do pass.
Motion and a second on do pass. All in favor say aye. Aye. All opposed say no. No. Bill passes. Thank you.
Agenda
Call to Order
HB1656 Beck TO AMEND THE LAW REGARDING OIL AND GAS PRODUCTION AND CONSERVATION.
HB1562 Gazaway CONCERNING THE TERMINATION OF AN ORAL LEASE OF FARMLANDS; AND TO AMEND THE LAW CONCERNING NOTICE OF TERMINATION.
HB1680 Vaught TO PREVENT A FOREIGN-PARTY-CONTROLLED BUSINESS FROM LEASING LAND; AND TO PROHIBIT A PROHIBITED FOREIGN PARTY FROM HOLDING AN INTEREST IN REAL PROPERTY OR AGRICULTURAL LAND IN CERTAIN CIRCUMSTANCES.
HB1827 Wardlaw TO AMEND THE ARKANSAS HUNTING HERITAGE PROTECTION ACT.
HB1855 Ennett TO AMEND THE LAWS CONCERNING THE POWERS AND DUTIES OF THE DEPARTMENT OF AGRICULTURE AND THE ARKANSAS FORESTRY COMMISSION; AND TO AMEND THE LAWS RELATING TO FIRE PROTECTION DISTRICT BOUNDARIES.
Recess
Reconvene
HB1923 Maddox TO AMEND THE ARKANSAS TOURISM DEVELOPMENT ACT; AND TO AMEND THE LAW CONCERNING NATURAL STATE INITIATIVE OPPORTUNITY ZONES.
HB1928 M. Brown TO AMEND THE ARKANSAS SOIL NUTRIENT APPLICATION AND POULTRY LITTER UTILIZATION ACT.
HB1852 Moore TO ESTABLISH A RIGHT TO REPAIR FOR CERTAIN AGRICULTURAL EQUIPMENT.
Adjourn
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — AGRICULTURE, FORESTRY & ECONOMIC DEVELOPMENT - SENATE, Apr 8, 2025 | Agenda | 2 | Official source ↗ |
Speakers
Senator Ronald Caldwell Chair
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Representative DeAnn Vaught
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Senator Missy Irvin
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Senator Greg Leding
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Senator Matt Stone
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Senator Jimmy Hickey, Jr
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Steve Shepherd
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Scott Waller
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Layden Pugh
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Senator Steve Crowell
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Senator Bart Hester
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Chair
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Representative Denise Jones Ennett
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Senator Breanne Davis
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Mark Robinette
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Senator Jonathan Dismang
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Alan Perkins
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Rick Paloma
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Jim Rankin
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