House Committee on Agriculture, Forestry and Economic Development

February 15, 2023

Rep Fortner: I want to welcome our guests, thank you all for coming. And we’ll just go ahead and get started. Representative Eaves, are you ready to present your bill?

Rep Eaves: Yes, sir.

Rep Fortner: Representative Eaves is going to present Senate Bill 191 for us this morning. You’re recognized.

Rep Eaves: Thank you, Mr. Chairman. And this bill is technically Senator Dave Wallace’s bill, so keep that in mind. If you recall, those of us that have been here a little while, we’ve always had some issues with the Plant Board and how those selection processes were made. So what this bill does– well, the appointment process for nine of those seats on the State Plant Board was found to be unconstitutional. The nine removed members had been selected by trade groups set out by Act 361, I think of 2021, which required agricultural industry trade groups to nominate two candidates each. One of whom would be selected by the governor subject to Senate confirmation. This was found to be an unconstitutional delegation of public power to private interests in violation of the Arkansas Constitution.

So what this bill does it’ll align the selection process with that recent Supreme Court ruling, where the governor will appoint these members directly to those vacant seats, subject also to Senate confirmation. You’ll also notice there’s an Emergency Clause in there because of the number of vacancies made it almost impossible for the State Plant Board to conduct its statutorily mandated functions that are necessary for the regulation and oversight of the Ag industry. That’s pretty much all the bill does, and I’d be happy to take any questions.

Rep Fortner: Members, do you have any questions? Seeing none. Is there anyone in the audience, no one has signed up, but is there anyone in the audience who would like to speak for or against this bill? Seeing none– I see a question. Representative Haak?

Rep Haak: Thank you. I just wondered if everyone is happy now, is this going to solve all the issues?

Rep Eaves: I hesitate to say everyone is happy in this building but apparently, everyone that has an interest in this issue is happy.

Rep Haak: Thank you.

Rep Fortner: Any other questions? Are you ready to close for your bill?

Rep Eaves: I’m closed for the bill and I’d appreciate a do pass.

Rep Fortner: Representative Beaty? That’s a proper motion. Is there any discussion on the motion? All in favor? Opposed? Thank you, your bill is passed.

Rep Eaves: Thank you, Committee. Appreciate it.

Rep Fortner: Okay, we’re waiting on Representative Gazaway, we’ll give him– shall we be generous and give him five minutes? Yeah, let’s be– four and a half, all right I got that. That’s a proper motion.

Representative Gazaway is on his way. I don’t know if that’s from Omaha or where. From Batesville. Representative Gazaway, you are recognized to present your bill. When you’re ready, that would be 210.

Rep Gazaway: Thank you, Mr. Chairman. You know, at one time we used to have these iPads that every member had that were set at the end of the table where you could look at the bill. So I don’t know exactly what happened to those.

Rep Fortner: Would you like a copy of it?

Rep Gazaway: I think I can get it.

Rep Fortner: We’re bringing you one. We want you to be excellent.

Rep Gazaway: Thank you so much. Paybacks.

Rep Fortner: Easy with the questions. I think there’s someone here to help you if you’d like to call him.

Rep Gazaway: That would be great. That’d be wonderful. If they would like to join me at the table with your permission, Mr. Chair, that would be wonderful.

Rep Fortner: If you would, recognize yourself for the record.

Bengal (OGC): Lawrence Bengal, Director of the Oil and Gas Commission.

Rep Fortner: Thank you.

Rep Gazaway: Okay. Thank you, Mr. Chairman. Members, the bill you have before you today is Senate Bill 210. This regards the underground storage of gas. And specifically, amends the underground storage of gas law to include certain other gasses. Under the previous or existing law that we have, it had defined native gas and then, of course, we referred to natural gas. But in the state of Arkansas currently, there’s other types of gasses that are being stored underground, some in these naturally occurring aquifers. This is commercial activity that’s happening, particularly in the southern part of the state. I met with some folks just the other day who were engaged in this business and were telling me all about how they store this gas. So it’s not just natural gas.

And so one of the things that we did was we struck natural gas because the previous law applied almost exclusively to natural gas and made it much more broad just to use the term gas to encompass all sorts of gasses that are being stored underground currently in the state. And so generally, that’s what the bill does. Of course, I have a great witness here who may be able to give you a little more explanation but I’m happy to answer any questions at the appropriate time. Thank you, Mr. Chair.

Rep Fortner: Okay. I have a question. Could you give me an example of the other kinds of gasses?

Rep Gazaway: So you have carbon oxides, ammonia, hydrogen, nitrogen, and other noble gasses. I think the folks that I met with the other day were dealing with hydrogen I believe. I know that is one of the particular types of gasses it’s being stored underground. And it may have also been ammonia, there was some byproduct I believe, a gas byproduct that was produced maybe in relation to the oil mining process. And they were kind of siphoning that gas off that was produced in the mining process and then storing that underground. And they have to meet certain federal regulations to do that. And they went through about all the safety standards that they have to abide by. A lot of those are federal regulations but again this just brings us into compliance. We’re not the only state to do this, I think they’ve passed similar laws in Louisiana and Texas and other places where there’s lots of this activity that’s going on.

Rep Fortner: When you say underground storage, you don’t mean in a tank, you’re putting it back into the ground into an existing hole.

Rep Gazaway: Correct, yes.

Rep Fortner: Representative Beaty did you have a question?

Rep Beaty: Yes, sir, Mr. Chairman. My question, the way I read this, you’re dealing I guess for my terms would be pore rights and ownership of those pore rights if I read this correctly say that it would go with the landowner so that it would not be separate like the mineral interest, this would actually go with the surface owner of the land?

Bengal (OGC): Correct. The pore rights, unlike mineral rights where the mineral owner is owner of the oil and gas, when those are no longer present or they haven’t been present to start with like an aquifer, those pore spaces, pore rights belong to the surface owner.

Rep Beaty: I mean, I guess that was my only question because it didn’t specifically mention pore rights in the language.

Bengal (OGC): That’s the law here in Arkansas.

Rep Beaty: Yeah, it’s a good deal. I appreciate that.

Rep Fortner: Any other questions? Would you define pore rights for me?

Bengal (OGC): Pore rights, it’s the pore space, the space between the rock grains, in a porous rock formation, and there’s where you store the particular gasses. So those pore rights, if they don’t have an economic mineral in them, that pore space is owned and controlled by the surface owner. So if someone wants to use that pore space to store injected gasses, they would have to lease that or acquire that from the surface owner.

Rep Fortner: Okay. Thank you, any other questions? Seeing none, are you ready to close, Representative?

Rep Gazaway: Thank you, Mr. Chairman. I’m closed for the bill and would appreciate a good vote.

Rep Fortner: Okay. We have a motion do pass. Is there any questions, any comments? Okay, all in favor? Any opposed? Congratulations, your bill has passed.

Rep Gazaway: Thank you, Mr. Chairman. Thank you, Committee. I apologize that I was running a little bit behind. I had a meeting and it was in another committee where we got a special order so I apologize it took me a little bit.

Rep Fortner: We’re just glad to have you here.

Rep Gazaway: Good to be here. Thank you.

Rep Fortner: All right. Seeing no other business in front of us today, Senate Bill 209 we’ll be hearing next Wednesday. There’s an amendment for that and it’ll be coming to us. And then we’re also going to have some individuals come in and they’re going to speak to us next week about a program I thought you might be interested in. It is veterans that got a federal program and they’re growing specialty crops. And so they’re going to explain that to us. So that’ll be interesting, you’ll want to hear that. Representative Beaty?

Rep Beaty: Mr. Chairman, I would like to make a request that we have Game and Fish come and address this Committee.

Rep Fortner: Okay. A particular topic or just?

Rep Beaty: I would think maybe just an open discussion among Committee members with Game and Fish.

Rep Fortner: And who would you like to be at the table?

Rep Beaty: I would like the Director, Austin Booth.

Rep Fortner: All right. We will request that and I’ll keep you all posted on the date when he can be here.

Rep Beaty: Thank you, sir.

Rep Fortner: Any other questions or comments? Anything for the good of the Committee? All right, well thank you for coming.