Attorney General Opinion No. 1986-138 PDF Download

Author: Robert T. Stephan
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Languages : en
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Under its police power, a state may reimburse itself for the cost of regulating and supervising a business by assessing the necessary expenses to the business which created the necessity for such regulation and supervision. Use of conservation fee fund monies for the prevention and cleanup of pollution from oil and gas activities regulated by the state corporation commission is sufficiently related to the regulatory function to make its use for such purposes a valid exercise of the police power. The conservation fee fund may be used to fund the study and cleanup of oil and gas pollution pursuant to section 37 of 1986 House Bill No. 3078 (K.S.A. 55-143, as amended by 1986, ch. 201, section 37), to the extent that such study and cleanup are reasonably related to those activities of the oil and gas industry which are regulated by the commission. Use of the conservation fee fund by the state corporation commission for those oil and gas activities it does not regulate (as authorized by K.S.A. 55-143, as amended by L. 1986, ch. 201, section 37, which references subsection (a)(2)(A)-of K.S.A. 65-171d, as amended by L. 1986, ch. 201. section 22), is contrary to the findings of the Kansas Supreme Court in P̲a̲n̲h̲a̲n̲d̲l̲e̲ ̲E̲a̲s̲t̲e̲r̲n̲ ̲P̲i̲p̲e̲l̲i̲n̲e̲ ̲v̲.̲ ̲F̲a̲d̲e̲l̲e̲y̲. Such use exacts revenue from the oil and gas industry under the guise of a regulatory fee in violation of article 11, section 1 of the Kansas Constitution, and the commerce clause and the Fourteenth Amendment of the United State Constitution. Cited herein: Kans. Const., Art. 11, section 1; U.S. Const., Fourteenth Amendment; K.S.A. 55-131; 55-143; 65-171d, as amended by L. 1986, ch. 33, section 10(f); L. 1986, ch. 201, sections 1, 2, 10, 17, 22, 28, 37, 39 and 40; and K.A.R. 28-41-1.