H. B. 4061
(By Delegates R. Thompson and Perdue)
[Introduced
January 16, 2002
; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact section six, article one-a, chapter
twenty of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, relating to competitive bidding and
notice requirements for the development of natural resources
in which the public land corporation has an interest; and
requiring public hearings, publication of notices and
procedure if evidence establishes or fails to establish the
fair market value of the mineral interest.
Be it enacted by the Legislature of West Virginia:
That section six, article one-a, chapter twenty of the code of
West Virginia, one thousand nine hundred thirty-one, as amended, be
amended and reenacted to read as follows:
ARTICLE 1A. REAL ESTATE MANAGEMENT AND PROCEDURES.
§20-1A-6. Competitive bidding and notice requirements before the
development of natural resources on certain lands;
additional procedures.
(a) Subject to the provisions of subsection (b) of this
section, the corporation may enter into a lease or contract for the
development of minerals, gas or oil on or under lands in which the
corporation holds any right, title or interest: Provided, That no
lease or contract may be entered into for the extraction and
removal of minerals by surface mining or auger mining of coal.
With the exception of deep mining operations which are already in
progress and permitted as of the effective date of this article,
extraction of coal by deep mining methods under state forests or
wildlife refuges may be permitted only if such the lease or
contract provides that no entries, portals, air shafts or other
incursions upon and into said the land incident to said the mining
operations may be placed or constructed upon said the lands or
within three thousand feet of the boundary thereof of the lands.
Any lease or contract entered into shall must reserve to the state
all rights to subjacent surface support which the state is seized
or possessed of at the time of such the lease or contract.
Notwithstanding any other provisions of the code to the contrary,
nothing herein in this subdivision shall may be construed to permit extraction of minerals, oil or gas by any method from, on or under,
any state park or state recreation area, nor the extraction of
minerals by strip or auger mining upon any state forest or wildlife
refuge. The corporation may enter into a lease or contract for the
development of minerals, oil or gas, where such the lease or
contract is not prohibited by any other provisions of this code,
only after receiving sealed bids therefor, after notice by
publication as a Class II legal advertisement in compliance with
the provisions of article three, chapter fifty-nine of this code.
The area for such publication shall be is each county in which such
the lands are located. The minerals, oil or gas so advertised may
be leased or contracted for development at not less than the fair
market value, as determined by an appraisal made by an independent
person or firm chosen by the corporation, to the highest
responsible bidder, who shall must give bond for the proper
performance of the contract or lease as the corporation shall
designate designates; but the corporation shall have the right to
may reject any and all bids and to readvertise for bids. If the
foregoing provisions of this section have been complied with, and
no bid equal to or in excess of the fair market value of such the
natural resources is received, the corporation may, at any time during a period of six months after the opening of the bids, lease
or contract for the development of such natural resources in such
manner as it is deemed determined appropriate, but the lease or
contract price shall may not be less than the fair market value of
such the natural resources advertised.
(b)(1) Prior to any final decision of the department of
natural resources and public land corporation to put any coal, oil
or gas up for open competitive bidding by legal advertising
procedures as set out in section one, article three, chapter
fifty-nine of this code, it must provide for a public hearing to be
held at a reasonable time and place within the county in which the
department of natural resources and public land corporation-owned
coal, oil or gas is located to allow all interested members of the
public to attend the hearing, to submit statements and testimony
and to question the department of natural resources and public land
corporation officials at that meeting about the proposed bidding
and leasing activity.
(2) Written notice of the public hearing must be sent to the
county clerk to be made available for public inspection in the
county courthouse of the county in which the department of natural
resources and public land corporation-owned coal, oil or gas is located during two successive weeks before the date of the
scheduled public hearing.
(3) Not less than thirty days prior to the public heading, the
department of natural resources and public land corporation must
provide notice to all members of the Legislature, the head of the
governing body of any political subdivision having zoning or other
land use regulatory responsibility in the geographic area within
which the department of natural resources or public land
corporation coal, oil or gas is located and to the head of any
political subdivision having administrative or public services
responsibility in the geographic area within which the department
of natural resources or public land corporation coal, oil or gas is
located.
(4) The department of natural resources or public land
corporation must cause to be published a notice of the required
public hearing. The notice shall be published as a Class II legal
advertisement in compliance with the provisions of article three,
chapter fifty-nine of this code and the publication area shall be
each county in which the affected land, coal, oil and gas is
located. The notice shall contain the time and place of the public
hearing to be held, along with a brief description of the affected surface land, coal, oil and gas.
(5) The department of natural resources or public land
corporation must cause a copy of the required notice to be posted
in a conspicuous place on the surface of department of natural
resources lands under which the affected coal, oil or gas is
located, for members of the public to observe. The notice must
remain posted for two successive weeks prior to the date of the
public hearing.
(6) The department of natural resources or public land
corporation may designate the staff representative of the
corporation who will conduct the required public hearing. The
corporation's staff representative must have full knowledge of all
the facts and circumstances surrounding the proposed coal, oil or
gas leasing by competitive bid methods. The staff representative
of the corporation must make a report of the public hearing
available for inspection by the public or, upon written request of
any interested person, provide a written copy of the report to all
individuals previously receiving written notice of the hearing
within thirty days following the public hearing.
(7) If a preponderance of the evidence at the public hearing
establishes that the analysis and appraisal provided for in subdivision (a) of this section do not reflect the true, fair
market value, the public land corporation staff must cause another
analysis and appraisal to be made. If a preponderance of the
evidence at the public hearing establishes that the proposed
leasing of coal, oil or gas does not meet the criteria set forth in
subdivision (a) of this section, the public land corporation may
not proceed with the competitive bid leasing of coal, oil or gas
without judicial approval.
The staff representative of the corporation conducting the
public hearing must make the results of the hearing available to
the corporation board members for its consideration prior to the
board making decisions regarding the affected coal, oil or gas.
(8) After the public hearing is completed and all required
time frames have been complied with and the board has reviewed and
considered all comments from the public hearing, the board must
decide whether to authorize the staff to proceed with the required
legal advertising for the competitive bid leasing of the coal, oil
or gas. If the board authorizes the staff to proceed, the staff
must request the attorney general to assign a special assistant
attorney general to counsel the public land corporation staff in
its carrying out of the competitive bid and leasing process. The special assistant attorney general must be knowledgeable and
experienced in coal, oil and gas law, bidding and leasing document
preparation. The staff must also hire an independent coal, oil and
gas engineering consultant to assist the staff and counsel with all
technical aspects of the review and analysis of all bids submitted
in negotiation of the lease document with the successful bidder and
the periodical inspection of the production process once the lease
if finalized, executed by all parties and recorded in the county
clerk's office, and the lessee begins construction and production
operations. Once the lessee commences the production of coal, oil
or gas and royalties become due the public land corporation and
paid, the staff must hire an independent auditing firm to
periodically review the lessee's books and accounts for compliance
of payment of appropriate royalties due the public land corporation
for its coal, oil or gas so produced in the lease agreement.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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