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Fracking bills in Legislature fuel city-control debate

March 23, 2015

Dallas Morning News Photo by Jim TuttleDallas Morning News
Marissa Barnett

AUSTIN — It was standing room only at a House hearing on two bills that would restrict how cities can regulate oil and gas activities.

The bills would prevent cities from passing oil and gas ordinances that are not “commercially reasonable” and require them to make up tax revenue lost because of oil and gas restrictions.

Opponents view the legislation as part of a slate of bills this session aimed at limiting local control, but supporters say otherwise.

“Local regulations must be reasonable and ensure that property owners have the regulatory certainty that they will be able to access their minerals,” said Todd Staples, head of the Texas Oil and Gas Association.

“The threat to Texas and our state’s biggest economic driver — oil and gas — is real and it is urgent,” said Staples, who is also a former state agriculture commissioner.

The bills, which are pending, emerged in response to a hydraulic fracturing ban Denton voters overwhelmingly approved in November.

House Energy Resources Chairman Rep. Drew Darby, R-San Angelo, and about 50 co-authors sponsored legislation that would prohibit city limits on oil and gas that are deemed not commercially reasonable, or are otherwise pre-empted by state or federal law.

Cities raised concerns about potentially ambiguous terminology in the bill that they said would dissuade cities from proposing ordinances or would lead to expensive litigation when they do.

“This bill will have a chilling effect on smaller cities, and they will elect simply not to regulate oil and gas,” said Bryn Meredith, an attorney representing 25 cities in the Barnett Shale region.

Oil and gas industry representatives — and lawmakers — said the legislation would not strip cities of their authority to establish “reasonable setbacks and limitations on nuisances such as traffic, light or noise.”

Another bill, written by Rep. Phil King, R-Weatherford, would require cities to make up tax revenue lost to the state for schools as a result of oil and gas ordinances. Cities also would be required to get a fiscal impact note from the Legislative Budget Board that details the proposed action’s effects on taxes.

Darby said his bill intended to avoid “patchworks of inconsistent regulations that undermine safe, efficient production of oil and gas.”

Sharon Wilson, an Earthworks Texas organizer who advocated the fracking ban, called the legislation the “very definition of big government.”

“When it comes to oil and gas development, HB40 would make the Railroad Commission … the city council of every city in Texas,” she said of Darby’s bill.

Much of the early part of the hearing came down to one question: How do you decide what is commercially reasonable?

Attorneys representing North Texas cities testified that ambiguity in the law could prevent cities from considering ordinances.

But Darby countered that the bill provided that setbacks, traffic and noise ordinances would be allowed, but restrictions that could limit or stop production would not be.

“We recognize that cities have the right to do ordinances; they must be reasonable,” Darby said.

“Everybody’s fear is a lack of understanding as to what ‘commercially reasonable’ is going to be,” replied Bill Lane, an attorney for the city of Mansfield. “I don’t think it’s as black and white as you think it is.”

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