I Should Have Paid More Attention in Civics Class

1. I Should Have Paid More Attention in Civics Class Industry’s Role in the Legislative Process Presented to NADOA Institute – September, 2016 Developed by Julie Moore, OXY Government Affairs Tricia Davis, American Royalty Council / Texas Royalty Council Donna Reeves, Independent

2. Remembering our Founding FathersOur Laws and Procedures today are based on the foresight of these men.

3. Remembering our Founding FathersHistorical Quotes Thinking back… What are some political quotes or battle cries that you remember from your history, government and/or civics classes?

4. Founding FathersHistorical Quotes – To name a few… Give me liberty or give me death (Patrick Henry) I have not yet begun to fight (John Paul Jones) No Taxation without Representation (Jonathan Mayhew, Old West Church pastor) We must all hang together, or assuredly we shall all hang separately. (Benjamin Franklin) The distinctions between Virginians, Pennsylvanians, New Yorkers, and New Englanders are no more. I Am Not A Virginian, But An American! (Patrick Henry)

5. Remembering our Founding FathersGoals for our Nation So…what were they trying to accomplish ? Basically, to unite the colonies into a complete and separate nation.

6. Remembering our Founding FathersGoals for our Nation – Declaration of Independence

7. Remembering our Founding Fathers Declaration of Independence IN CONGRESS, July 4, 1776. The unanimous Declaration of the thirteen united States of America, When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another …

8. Remembering our Founding Fathers Declaration of Independence We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence…

9. Remembering our Founding FathersGoals for our Nation The Plan… to establish a government – a democracy – that was for the people and by the people Being, a system of government by the whole population or all the eligible members of state, typically through elected representatives

10. Remembering our Founding FathersGoals for our Nation Democracy consists of four (4) key elements – System for selecting and replacing the government through free and fair elections Participation of the people, as citizens, in politics and civic life Protection of the human rights of all citizens The laws and procedure apply equally to all citizens

11. Remember our Founding Fathers / Politicians In a speech, President John F Kennedy referenced – The only thing necessary for the triumph of evil is that good men do nothing. This quote is often credited to Edmund Burke, an Irish Statesman, who supported the American Revolution. However, there is much debate as to who originally said this.

12. State GovernmentsLegislative Process While each State has its own separate laws and statutes, each state government is generally patterned after our National Legislative and Statutory Regulations. Our focus of this presentation will be the Texas Legislative Process. If you have specific questions on policies of another state, please consult with your in-house legal counsel.

13. State GovernmentsLegislative Process • How often does the State Legislature meet? • 46 – State Legislatures meet annually • Remaining 4 States – Montana, Nevada, North Dakota & Texas – meet every other year in odd years. The only requirement that a State Legislature has to meet is to approve a Budget.

14. State GovernmentsLegislative Process • How long is the session? • For Texas – Begins on the Second Tuesday of January and ends May 31st • Special Sessions as Needed • When can Bills be introduced? • For Texas – Bills can be introduced by the second week of November prior to beginning of Session • No NEW Bills can be introduced after the second week of March – during Session. • Bills may be ‘in the works’ outside of these deadlines, even before the Legislative Session begins – however, they can only be introduced during the above mentioned dated.

15. Legislative Process Legislation (or "statutory law") is law which has been promulgated (or "enacted") by a legislature or other governing body. Legislation can have many purposes: to regulate, to authorize, to outlaw, to provide (funds), to sanction, to grant, to declare or to restrict. It may be contrasted with a non-legislative act which is adopted by an executive or administrative body under the authority of a legislative act or for implementing a legislative act.

16. Legislative ProcessBasic Steps in which a Bill Becomes Law • Drafted • This can be based on Constituent Input • May be limited to a Specific Geographic Area • May be directed toward a select, special individuals, entity • Filed • Introduced, numbered and read to applicable legislative body • Bills can be introduced in the State Senate or the State House of Representatives • Referred to a Committee • Heard in Committee • Study, Notice of Hearings, Public Hearings, Potential Amendments • Amendments engrossed into Text of Bill • Passes Out of Committee / Or Fails • Approved by both Houses – Final Form sent to Governor • 10 days to approve or veto; If not signed within 10 days, then automatically becomes law • If Bill passed within last 10 days of session, then 20 days after session to sign or veto • Vetoed Bill can be passes with 2/3 affirmative vote of both houses

17. Why Should Industry Be Involved in the Legislative Process? • What happens in the legislature should matter to you – it’s everyone’s business • We shape our future by being involved. • This involvement should begin early in the process of a Bill being introduced to mitigate any legislative catastrophe that could adversely affect our day to day business. • Not being involved could be compared to buying a house and never seeing any of the progress until the builder is ready to hand you the key. • You then have to live with what you get… with no benefits of having input into the construction process. • You then will only see the ‘cost’… when he hands you the keys.

18. How can Industry be Involved in the Legislative Process? As previously indicated, our Founding Fathers intended for you and me, as citizens, to participate in politics and civic life. Therefore… The only thing necessary for the triumph of evil is that good men do nothing. So… how we do begin? How do we become involved?

19. Why Should Industry Be Involved in the Legislative Process? There are around 6500 Bills introduced in Texas per Session

20. Why Should Industry Be Involved in the Legislative Process? So… with that number, how do we avoid massive pandemonium?

21. How can Industry be Involved in the Legislative Process? • We obviously need a Plan… • Begin with your In-House Resources – • Does your company have a Government Affairs / Legislative Affairs person? • If so – do you know who that is? • Their Role is to advocate on behalf of the Company. • Make Contact with them to be sure that Division Order / Land Issues are being addressed? • You may need to clear this with your immediate Supervisor • Does your Company have someone that handle both State / Federal Legislative Issues? • If your company does not have a Government Affairs person, what other resources do you have in your company? • Call someone legal, public affairs – what resources do you have available? • Contractor? Member of any association that performs this same function? • You may need to clear this with your immediate Supervisor

22. How can Industry be Involved in the Legislative Process? • In Texas, for example, all of the Associations listed below work together for a common goal on legislation related to our industry – • TXOGA – Texas Oil and Gas Association • TIPRO – Texas Independent Producers and Royalty Owners • Texas Alliance (The Alliance) • PBPA – Permian Basin Petroleum Association • TRC – Texas Royalty Council • PPROA – Panhandle Producers and Royalty Owner Association • Similar to the Corporate Government Affairs person, their Role is to advocate on behalf of its members.

23. How can Industry be Involved in the Legislative Process? • Let’s say – you don’t have this available through your company. • Go online and find resources – Texas Legislature online • Other states have similar website resources • Word searches – These can be contained in the Caption or the Body of the Bill • Certain words can ‘trigger your interest’ • Make of List of Bills related to your specific interest – for example, unclaimed property, division orders, etc. • Periodically update your list – Body may change as revisions and amendments are added to the Bill. • This happens more so toward end of Session • Statute Searches – Statutes specific to Oil and Gas Payment, Division Order, etc. • If during your search(s), you find a Bill that you believe would not be beneficial for your company / industry (or possibly in your favor), contact your in-house counsel or immediate Supervisor to see how the company should proceed. • It may even be advantageous to contact NADOA Leadership to determine if the Bill is on their radar.

24. How can Industry be Involved in the Legislative Process?How does the Senator / Representative find the Expert? We have elected an official to represent its constituent’s interests – however, we cannot expect that person to be an expert on each and every issue for the people in his/her district. We can’t expect him/her to be an expert on farming, electricity, water issues, oil and gas issues, etc. While the Senator and/or Representative appreciate the role of the Corporate Government Affairs person’s interest in legislation that affects their business, he/she is especially interested in the opinions and input from the Subject Matter Expert (“SME”) – i.e. the individual that handles that particular industry facet each and every day. He/She must rely on input from experts in these fields. On Oil and Gas Issues – that, my friends, is you and me…

25. How can Industry be Involved in the Legislative Process? • Therefore, we may be called upon to give opinions as to how we believe the proposed legislation will impact our industry • Phone Conversations • Emails • Actual Testimony before a Hearing Committee • A word of caution – be sure that you have management and corporate approval before you start giving opinions.

26. How can Industry be Involved in the Legislative Process? We often think of a testimony as a scene from a movie – grueling and defensive. However, for the most part the drama stays in the movie theater, not the Hearing Chamber. The testimonial usually has a time limit to give credentials and supporting arguments, etc. for the ‘yay or nay’ of the proposed legislation. Keep in mind that proposed legislation is a ‘work in progress’. Therefore, the draft can change within a short timeframe which can impact the testimony.

27. How can Industry be Involved in the Legislative Process?Do you have an Opinion? Ice Cream – Vanilla or Chocolate? Vacation – Mountains or Beach? Work Place – Office / Cubicles? Division Orders- Require Owner to Sign before putting in Pay? Car – Sedan or SUV or Truck? Division Order – Full Ownership for Entire Well or Separate one for each Individual Owner? Division Order- Put in Pay without a Tax ID? Access to Tax Records – Should anyone be able to access Well / Property Ownership Information at the Taxing Authority? So… you do have an opinion – This same ‘opinion process’ can be translated to the legislative involvement.

28. How can Industry be Involved in the Legislative Process?Tips to Remember- The State’s Legislature Website is a Super Resource

29. How can Industry be Involved in the Legislative Process?Tips to Remember- The Same Concept may be introduced in multiple Bills – usually a House Version and a Senate Version

30. How can Industry be Involved in the Legislative Process?Tips to Remember- You can access Summary of Witnesses for a Specific BillExample of Industry Working Together What is the Common Denominator for the persons testifying against the Bill? They are all NADOA Members Our Organization isinvolved.

31. How can Industry be Involved in the Legislative Process?Testimony Senate Natural Resources Testimony – Calculations should be required on Division Orders Donna's Testimony

32. How can Industry be Involved in the Legislative Process?Ongoing and Future Legislation • The Division Order Bill, as discussed earlier, will be back… • Sunset Advisory Commission • This legislation is now in its Third Session in trying to work out regulations and differences. Sunset Chairman wants a ‘clean Bill’ early in March 2017 to finally pass out of Sunset and to continue the Railroad Commission of Texas. • Tricia's Testimony • Unclaimed Mineral Proceeds Commission – The Study – HB724 83R • Regarding the distribution of mineral proceeds held in held in Comptroller’s Office as unclaimed. • Distribution to proposed heirs based on old land grants from the Crown of Spain, Mexico, The Republic of Texas or the State. • Tricia Davis has given testimony as to why current Mineral Owners might have money in suspense • Full Division Order Ownership, as provided annually to Taxing Valuation Companies. • These have historically been protected or held confidential? • Should these become ‘Open Record’?

33. How can Industry be Involved in the Legislative Process? The Take Away – Remember: The only thing necessary for the triumph of evil is that good men do nothing. Even one person can make a difference. Ask Tricia how she impacted the dress code at her high school. We have people in our industry who operate in a legislative / government affairs role. These people are basically our ‘scouts’ to advise us of pending and/or proposed legislation that may either favorably or adversely affect our industry. When we receive correspondence – usually by email, these advocates have already vetted the impact that it may have on our industry. Therefore, when you receive information of this nature, there is usually a pressing deadline associated with these matters. Please forward to your management, in-house counsel, etc. so that appropriate actions may be taken.

34. How can Industry be Involved in the Legislative Process? QUESTIONS?????