Senate Bill No. 396
(By Senators Withers, Macnaughtan and Claypole)
____________
[Introduced March 18, 1993; referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
____________

A BILL to amend and reenact section four, article three, chapter eleven-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend and reenact section one, article eight, chapter twenty-two of said code; to further amend said chapter by adding thereto a new article, designated article eight-a; to amend article two, chapter twenty-two-b of said code by adding thereto a new section, designated section ten; to amend chapter thirty-six of said code by adding thereto a new article, designated article two-a; and to further amend said code by adding thereto a new chapter, designated chapter thirty-seven-b, all relating to sheriff's sale; unifying title to surface with title to minerals at time of sale; providing for shallow oil and gas well exploration and production; providing a declaration of public policy regarding management of oil and gas resources; defining certain terms; establishing a shallow well oil and gas conservation program; providing for the appointment of

an administrator; regulation of shallow well oil and gas exploration and recovery; promulgation of rules; prohibiting waste of oil and gas; establishing a procedure for drilling units and pooling of interests; providing alternative options for nonparticipants; providing for secondary recovery of oil; establishing requirements for unitization; allowing unitization; providing a system of resolving disputes; providing for hearings, judicial review and injunctive relief; placing a special tax on oil and gas leases; providing criminal penalties; providing surface owner with certain protections; requiring notice to surface owner of intent to drill; providing compensation to surface owner; providing for restoration of surface when drilling complete; making surface estate and mineral estate equal in law; eliminating an implied easement for mineral owners; establishing the land reunion act; placing conditions on transfer of mineral interests; providing for persons to file interests in land; giving surface owner option to purchase mineral interest; and providing for filing statement.
Be it enacted by the Legislature of West Virginia:
That section four, article three, chapter eleven-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that section one, article eight, chapter twenty-two of said code be amended and reenacted; that said chapter be further amended by adding thereto a new article, designated article eight-a; that article two, chaptertwenty-two-b of said code be amended by adding thereto a new section, designated section ten; that chapter thirty-six of said code be amended by adding thereto a new article, designated article two-a; and that said code be further amended by adding thereto a new chapter, designated chapter thirty-seven-b, all to read as follows:
CHAPTER 11A. COLLECTION AND ENFORCEMENT OF PROPERTY TAXES.

ARTICLE 3. SALE OF LAND FOR TAXES.

§11A-3-4. Sale by sheriff.

(a) Except as provided in subsection (b) of this section each unredeemed tract or lot, or each unredeemed part thereof or undivided interest therein, shall be sold by the sheriff at public auction to the highest bidder for cash, between the hours of ten in the morning and four in the afternoon on any Monday after the fourteenth day of October and before the twenty-third of November: Provided, That no such unredeemed tract or lot, or any unredeemed part thereof or undivided interest therein, shall be sold upon any bid or for any sum less than the total amount of taxes, interest and charges then due: Provided, however, That at any such sale held after the thirtieth day of June, one thousand nine hundred sixty-five, each unredeemed tract or lot, and each unredeemed part of a tract or lot or interest therein, shall be offered for sale and sold in entirety as such tract or part thereof or interest therein is described and constituted as a unit or entity in the list and notice prescribed in section two of this article: Provided further, That no part or interest inany unredeemed tract or lot, or any part thereof or interest therein, that is less than the entirety of such unredeemed tract, lot or part or interest, as the same is described and constituted as a unit or entity in said list and notice, shall be offered for sale or sold at such sale. If the sale shall not be completed on the day designated in the notice for the holding of such sale, it shall be continued from day to day between the same hours until disposition shall have been made of all the land.
(b) An interest in real estate which does not include an interest in the surface, other than the right to use the surface to extract minerals, shall not be sold by the sheriff at the sale provided by this section. Ownership of such an interest shall, at the time the sale would have occurred, rest in the owner or owners of the surface interest within the boundaries of such interest. The vesting provided by this subsection shall be subject to all rights of the delinquent owner to redeem his interest in the same as if it had been sold at the tax sale as provided by this article.

CHAPTER 22. ENVIRONMENTAL RESOURCES.

ARTICLE 8. OIL AND GAS CONSERVATION.

§22-8-1. Declaration of public policy; legislative findings.

ARTICLE 8A. OIL AND GAS SHALLOW WELL CONSERVATION.

§22-8A-1. Declaration of public policy; legislative findings.

(a) It is hereby declared to be the public policy of thisstate and in the public interest to:
(1) Foster, encourage and promote exploration for and development, production, utilization and conservation of oil and gas resources;
(2) Prohibit waste of oil and gas resources and unnecessary surface loss of oil and gas and their constituents;
(3) Encourage the maximum recovery of oil and gas; and
(4) Safeguard, protect and enforce the correlative rights of operators and royalty owners in a pool of oil or gas to the end that each such operator and royalty owner may obtain his just and equitable share of production from such pool of oil or gas.
(b) The Legislature hereby determines and finds that oil and natural gas found in West Virginia strata have been produced continuously for more than one hundred years; and that in order to encourage the maximum recovery of oil and gas from all productive formations in this state, it is in the public interest to enact new statutory provisions relating to the exploration for or production from oil and gas, and that it is in the public interest to enact new statutory provisions establishing regulatory procedures and principles to be applied to the exploration for or production of oil and gas.
§22-8A-2. Definitions.
(a) Unless the context in which used clearly requires a different meaning, as used in this article:
(1) "Administrator for shallow well oil and gas" means the administrator for shallow well oil and gas;
(2) "Correlative rights" means the reasonable opportunity of each person entitled thereto to recover and receive without waste the oil and gas in and under his or her tract or tracts, or the equivalent thereof;
(3) "Director" means the director of the department of environmental protection;
(4) "Drilling unit" means the acreage on which one well may be drilled;
(5) "Gas" means all natural gas and other fluid hydrocarbons not defined as oil in this section;
(6) "Independent producer" means a person who is actively engaged in the production of oil and gas in West Virginia, but whose gross revenue from such production in West Virginia does not exceed five million dollars per year;
(7) "Just and equitable share of production" means, as to each person, and amount of oil or gas or both substantially equal to the amount of recoverable oil and gas in that part of a pool underlying his or her tract or tracts.
(8) "Oil" means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas after it leaves the underground reservoir;
(9) "Operator" means any owner of the right to develop, operate and produce oil and gas from a pool and to appropriate the oil and gas produced; in the event that there is no oil andgas lease in existence with respect to the tract in question, the owner of the oil and gas rights shall be considered as "operator" to the extent of seven eights of the oil and gas in that portion of the pool underlying the tract owned by such owner, and as "royalty owner" as to one-eighth interest in such oil and gas; and in the event the oil is owned separately from the gas, the owner of the substance being produced or sought to be produced from the pool shall be considered as "operator" as to such pool;
(10) "Person" means any natural person, corporation, partnership, receiver, trustee, executor, administrator, guardian, fiduciary or other representative of any kind, and includes any government or any political subdivision or any agency thereof;
(11) "Pool" means an underground accumulation of petroleum in a single and separate natural reservoir (ordinarily a porous sandstone of limestone). It is characterized by a single natural-pressure system so that production of petroleum from one part of the pool affects the reservoir pressure throughout its extent. A pool is bounded by geologic barriers in all directions, such as geologic structural conditions, impermeable strata, and water in the formations so that it is effectively separated from any other pools that may be present in the same district or on the same geologic structure;
(12) "Royalty owner" means any owner of oil and gas in place, or oil and gas rights, to the extent that such owner is not an operator as defined in subdivision (4) of this section;and
(13) "Waste" means and includes: (A) Physical waste, as that term is generally understood in the oil and gas industry; (B) The locating, drilling, equipping, operating or producing of any oil or gas well in a manner that causes, or tends to cause, a reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations, or that causes or tends to cause unnecessary or excessive surface loss of oil or gas; or (C) The drilling of more wells than are reasonably required to recover efficiently and economically the maximum amount of oil and gas from a pool;
(b) Unless the context clearly indicates otherwise, the use of the work "and" and the work "or" shall be interchangeable, as, for example, "oil and gas" shall mean oil or gas or both.
§22-8A-3. Application of article; exclusions.
(a) Except as provided in subsection (b) of this section, the provisions of this article shall apply to all lands located in this state, however owned, including any lands owned or administered by any government or any agency or subdivision thereof, over which the state has jurisdiction under its police power.
(b) This article shall not apply to or affect:
(1) Any well commenced or completed prior to the effective date of this article, unless such well is, after completion (whether such completion is prior or subsequent to the effective date of this article); (i) deepened subsequent to the effectivedate of this article to a formation at or below the top of the uppermost member of the "Onondaga Group" or at a depth of or greater than six thousand feet, whichever is shallower; or (ii) involved in secondary recovery operations for oil under an order of the commissioner entered pursuant to section eight of this article;
(2) Gas storage operations or any well employed to inject gas into or withdraw gas from a gas storage reservoir or any well employed for storage observation; or
(3) Free gas rights.
(c) The provisions of this article shall not be construed to grant anyone the authority or power to fix prices of oil and gas.

§22-8A-4. Appointment, responsibilities and authority of the administrator of the shallow well oil and gas conservation program.

The director shall appoint an administrator of the shallow well oil and gas conservation program, who shall be a graduate of a college or university with a degree in either geology or petroleum engineering. The administrator shall exercise all power, authority and responsibility necessary to implement the provisions of this article. The administrator may exempt certain areas of the state from the provisions of this article.
The administrator shall be covered by civil service and may not be removed without good cause.
By appointing the administrator the director does not limit his or her general authority and the director shall have specificauthority to:
(a) Regulate the spacing of wells;
(b) Make and enforce reasonable rules and orders reasonably necessary to prevent waste, protect correlative rights, govern the practice and procedure before the commissioner and otherwise administer the provisions of this article;
(c) Issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of any books, records, maps, charts, diagrams and other pertinent documents, and administer oaths and affirmations to such witnesses, whenever, in the judgment of the commissioner, it is necessary to do so for the effective discharge of his duties under the provisions of this article; and
(d) Serve as technical advisor regarding oil and gas to the Legislature, to the administrator for shallow well oil and gas, to the department of natural resources and to any other agency of state government having responsibility related to the oil and gas industry.
§22-8A-5. Rules; notice requirements.
(a) The administrator may promulgate reasonable rules and as he may deem necessary or desirable to implement and make effective the provisions of this article and the powers and authority conferred and the duties imposed upon him under the provisions of this article which shall be promulgated pursuant to chapter twenty-nine-a of this code.
(b) Notwithstanding the provisions of section two, articleseven, chapter twenty-nine-a of this code, any notice required under the provisions of this article shall be given at the direction of the administrator by: (1) Personal or substituted service and if such cannot be had then by (2) certified United States mail, addressed, postage prepaid, to the last known mailing address, if any, of the person being served, with the direction that the same be delivered to addressee only, return receipt requested, and if there be no known mailing address or if the notice is not so delivered then by (3) publication of such notice as a Class II legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code, and the publication area for such publication shall be the county or counties wherein any land which may be affected by such order is situate. In addition, the administrator shall mail a copy of such notice to all other persons who have provided him or her with an address to which all notices may be mailed. The notice shall be issued in the name of the state, shall be signed by the administrator, shall specify the style and number of the proceeding, the time and place of any hearing, and shall briefly state the purpose of the proceeding. Personal or substituted service and proof thereof may be made by an officer authorized to serve process or by an agent of the administrator in the same manner as is now proved by the "West Virginia Rules of Civil Procedure for Trial Courts of Record" for service of process in civil actions in the various courts of this state. A certified copy of any pooling order entered under the provisions of thisarticle shall be presented by the administrator to the clerk of the county commission of each county wherein all or any portion of the pooled tract is located, for recordation in the record book of such county in which oil and gas leases are normally recorded. Such recording of such order from the time noted thereon by such clerk shall be notice of the order to all persons.

§22-8A-6. Waste of oil or gas prohibited.

Waste of oil or gas is hereby prohibited.

§22-8A-7. Drilling units and the pooling of interests in drilling units in connection with oil or gas wells.

(a) Drilling units:
(1) After one well has been drilled establishing a pool, an application to establish drilling units may be filed with the administrator by the operator of such discovery well, the administrator or by the operator of any lands directly and immediately affected by the drilling of such discovery well, or subsequent wells in said pool, and the administrator shall promptly schedule a hearing on said application. Each application shall contain such information as the commissioner may prescribe by reasonable rules promulgated by him in accordance with the provisions of section four of this article;
(2) Upon the filing of an application to establish drilling units, notice of the hearing shall be given by the administrator. Each notice shall specify the date, time and place of hearing, describe the area for which a spacing order is to be entered, andcontain such other information as is essential to the giving of proper notice;
(3) On the date specified in such notice, the administrator shall hold a public hearing to determine the area to be included in his spacing order and the acreage to be contained by each drilling unit, the shape thereof and the minimum distance from the outside boundary of the unit at which a well may be drilled thereon. At such hearing the administrator shall consider:
(i) The surface topography and property lines of the lands underlaid by the pool to be included in such order;
(ii) The plan of well spacing then being employed or proposed in such pool for such lands;
(iii) The depth at which production from said pool has been found;
(iv) The maximum area which may be drained effectively and economically by one well; and
(v) Any other available geological or scientific data pertaining to said pool which may be of probative value to the administrator in determining the proper well drilling units therefor.
To carry out the purposes of this article, the administrator shall, upon proper application, notice and hearing as herein provided, and if satisfied after such hearing that drilling units should be established, enter an order establishing drilling units of a specified and approximately uniform size and shape for each pool subject to the provisions of this section;
(4) When it is determined that an oil or gas pool underlies an area for which a spacing order is to be entered, the administrator shall include in his or her order all lands determined or believed to be underlaid by such pool and exclude all other lands;
(5) No drilling unit established by the administrator shall be smaller than the maximum area which can be drained effectively and economically by one well: Provided, That if at the time of a hearing to establish drilling units, there is not sufficient evidence from which to determine the area which can be drained effectively and economically by one well, the administrator may enter an order establishing temporary drilling units for the orderly development of the pool pending the obtaining of information necessary to determine the ultimate spacing for such pool;
(6) An order establishing drilling units shall specify the minimum distance from the nearest outside boundary of the drilling unit at which a well may be drilled. The minimum distance provided shall be the same on all drilling units established under said order with necessary exceptions for wells drilled or being drilled at the time of the filing of the application. If the administrator finds that a well to be drilled at or more than the specified minimum distance from the boundary of a drilling unit would not be likely to produce in paying quantities or will encounter surface conditions which would substantially add to the burden or hazard of drilling suchwell, or that a location within the area permitted by the order is prohibited by the lawful order of any state agency or court, he or she is authorized after notice and hearing to make an order permitting the well to be drilled at a location within the minimum distance prescribed by the spacing order. In granting exceptions to the spacing order, the administrator may restrict the production from any such well so that each person entitled thereto in such drilling unit shall not produce or receive more than his or her just and equitable share of the production;
(7) An order establishing drilling units for a pool shall cover all lands determined or believed to be underlain by such pool, and may be modified by the administrator, from time to time, to include additional lands determined to be underlaid by such pool or to exclude lands determined not to be underlaid by such pool. An order establishing drilling units may be modified by the administrator to permit the drilling of additional wells on a reasonably uniform pattern at a uniform minimum distance from the nearest unit boundary as provided above. Any order modifying a prior order shall be made only after application by an interested operator and notice and hearing as prescribed herein for the original order. However, drilling units established by order shall not exceed one hundred sixty acres for an oil well or six hundred forty acres for a gas well. For the purposes of this section, unless a person seeks a variance, it is presumed that a shallow well will drain one hundred sixty acres;
(8) After the date of the notice of hearing called toestablish drilling units, no additional well shall be commenced for production from the pool until the order establishing drilling units has been made, unless the commencement of the well is authorized by order of the administrator;
(9) The administrator shall, within forty-five days after the filing of an application to establish drilling units for a pool subject to the provisions of this section, either enter an order establishing such drilling units or dismiss the application;
(10) As part of the order establishing a drilling unit, the administrator shall prescribe just and reasonable terms and conditions upon which the royalty interests in the unit shall, in the absence of voluntary agreement, be deemed to be integrated without the necessity of a subsequent order integrating the royalty interests.
(b) Pooling of interests in drilling units:
(1) When two or more separately owned tracts are embraced within a drilling unit, or when there are separately owned interests in all or a part of a drilling unit, the interested persons may pool their tracts or interests for the development and operation of the drilling unit. In the absence of voluntary pooling and upon application of any operator having an interest in the drilling unit and after notice and hearing, the administrator shall enter an order pooling all tracts or interests in the drilling unit for the development and operation thereof and for sharing production therefrom. Each such poolingorder shall be upon terms and conditions which are just and reasonable. In no event shall drilling be initiated on the tract of an unleased royalty owner without his written consent. If a person requests a variance from the division of proceeds based on acreage, he or she shall petition the administrator to change the division. The administrator may alter the division for good cause, including strata differences and the geological phenomena;
(2) All operations, including, but not limited to, the commencement, drilling or operation of a well, upon any portion of a drilling unit for which a pooling order has been entered, shall be deemed for all purposes the conduct of such operations upon each separately owned tracts in the drilling unit by the several owners thereof. That portion of the production allocated to a separately owned tract included in a drilling unit shall, when produced, be deemed for all purposes to have been actually produced from such tract by a well drilled thereon;
(3) Any pooling order under the provisions of this subsection (b) shall authorize the drilling and operation of a well for the production of oil or gas from one pooled acreage; shall designate the operator to drill and operate such well; shall prescribe the time and manner in which all owners of operating interests in the pooled tracts or portions of tracts may elect to participate therein; shall provide that all reasonable costs and expenses of drilling, completing, equipping, operating, plugging and abandoning such well shall be borne and all production therefrom shared, by all owners of operatinginterests in proportion to the net oil or gas acreage in the pooled tracts owned or under lease to each owner; and shall make provisions for payment of all reasonable costs thereof, including a reasonable charge for supervision and for interest on past-due accounts, by all those who elect to participate therein;
(4) No drilling or operation of a well for the production of oil or gas shall be permitted upon or within any tract of land unless the operator shall have first obtained the written consent and easement therefore, duly acknowledged and placed on record in the office of the county clerk, for valuable consideration of all owners of the surface of such tract of land, which consent shall describe with reasonable certainty, the location upon such tract, of the location of such proposed well, a certified copy of which consent and easement shall be submitted by the operator to the administrator;
(5) Upon request, any such pooling order shall provide just and equitable alternatives whereby an owner of an operating interest who does not elect to participate in the risk and cost of the drilling of a well may elect:
(i) Option 1. To surrender his or her interest or a portion thereof to the participating owners on a reasonable basis and for a reasonable consideration, which, if not agreed upon, shall be determined by the administrator; or
(ii) Option 2. To participate in the drilling of the well on a limited or carried basis on terms and conditions which, if not agreed upon, shall be determined by the administrator to bejust and reasonable;
(6) In the event a nonparticipating owner elects Option 2, and an owner of any operating interest in any portion of the pooled tract shall drill and operate, or pay the costs of drilling and operating, a well for the benefit of such nonparticipating owner as provided in the pooling order, then such operating owner shall be entitled to the share of production from the tracts or portions thereof pooled accruing to the interest of such nonparticipating owner, exclusive of any royalty or overriding royalty reserved in any leases, assignments thereof or agreements relating thereto, of such tracts or portions thereof, or exclusive of one eighth of the production attributable to all unleased tracts or portions thereof, until the market value of such nonparticipating owner's share of the production, exclusive of such royalty, overriding royalty or one eighth of production, equals double the share of such costs payable by or charted to the interest of such nonparticipating owner;
(7) If a dispute arises as to the costs of drilling and operating a well, the administrator shall determine and apportion the costs, within ninety days from the date of written notification to the administrator of the existence of a dispute.

§22-8A-8. Secondary recovery of oil; unit operations.

Upon the application of any operator in a pool productive of oil and after notice and hearing, the administrator may enter an order requiring the unit operation of such pool in connectionwith a program of secondary recovery of oil, and providing for the unitization of separately owned tracts and interests within such pool, but only after finding that: (1) The order is reasonably necessary for the prevention of waste and the drilling of unnecessary wells; (2) the proposed plan of secondary recovery will increase the ultimate recovery of oil from the pool to such an extent that the proposed secondary recovery operation will be economically feasible; (3) the production of oil from the unitized pool can be allocated in such a manner as to insure the recovery by all operators of their just and equitable share of such production; and (4) the operators of at least three fourths of the acreage (calculating partial interests on a pro rata basis for operator interests on any parcel owned in common) and the royalty owners of at least three fourths of the acreage (calculating partial interests on a pro rata basis for royalty interests on any parcel owned in common) in such pool have approved the plan and terms of unit operation to be specified by the administrator in its order, such approval to be evidenced by a written contract setting forth the terms of the unit operation and executed by said operators and said royalty owners, and filed with the administrator on or before the day set for hearing. The order requiring such unit operation shall designate one operator in the pool as unit operator and shall also make provision for the proportionate allocation to all operators of the costs and expenses of the unit operation, including reasonable charges for supervision and interest on past-due accounts, which allocationshall be in the same proportion that the separately owned tracts share in the production of oil from the unit. In the absence of an agreement entered into by the operators and filed with the administrator providing for sharing the costs of capital investment in wells and physical equipment, and intangible drilling costs, the administrator shall provide by order for the sharing of such costs in the same proportion as the costs and expenses of the unit operation: Provided, That any operator who has not consented to the unitization shall not be required to contribute to the costs or expenses of the unit operation, or to the cost of capital investment in wells and physical equipment, and intangible drilling costs, except out of the proceeds from the sale of the production accruing to the interest of such operator: Provided, however, That no credit to the well costs shall be adjusted on the basis of less than the average well costs within the unitized area; Provided further, That no order entered under the provisions of this section requiring unit operation shall vary or alter any of the terms of any contract entered into by operators and royalty owners under the provisions of this section.

§22-8A-9. Validity of unit agreements.

No agreement between or among operators, lessees or other owners of oil or gas rights in oil and gas properties, entered into pursuant to the provisions of this article or with a view to or for the purpose of bringing about the unitized development or operation of such properties, shall be held to violate thestatutory or common law of this state prohibiting monopolies or acts, arrangements, contracts, combinations or conspiracies in restraint of trade or commerce.

§22-8A-10. Hearing procedures.

(a) Upon receipt of an application for an order of the administrator for which a hearing is required by the provisions of this article, the administrator shall set a time and place for such hearing not less than ten and not more than thirty days thereafter. Any scheduled hearing may be continued by the administrator upon his or her own motion or for good cause shown by any party to the hearing. All interested parties shall be entitled to be heard at any hearing conducted under the provisions of this article.
(b) All of the pertinent provisions of article five, chapter twenty-nine-a of this code shall apply to and govern the hearing and the administrative procedures in connection with and following such hearing, with like effect as if the provisions of said article five were set forth in extenso in this subsection.
(c) Any such hearing shall be conducted by the administrator. For the purpose of conducting any such hearing, the commissioner shall have the power and authority to issue subpoenas and subpoenas duces tecum which shall be issued and served within the time, for the fees and shall be enforced, as specified in section one, article five of said chapter twenty- nine-a, and all of the said section one provisions dealing with subpoenas and subpoenas duces tecum shall apply to subpoenas andsubpoenas duces tecum issued for the purpose of a hearing hereunder.
(d) At any such hearing any interested person may represent himself or herself be represented by an attorney at law admitted to practice before any circuit court of this state. Upon request by the administrator he or she shall be represented at such hearing by the attorney general or his or her assistants without additional compensation. The administrator, with the written approval of the attorney general, may employ special counsel to represent him or her at any such hearing.
(e) After any such hearing and consideration of all of the testimony, evidence and record in the case, the administrator shall render his or her decision in writing. The written decision shall be accompanied by findings of fact and conclusions of law as specified in section three, article five, chapter twenty-nine-a of this code, and a copy of the decision and accompanying findings and conclusions shall be served by certified mail, return receipt requested, upon all interested persons and their attorney of record, if any.
(f) The decision of the commissioner shall be final unless reversed, vacated or modified upon judicial review.

§22-8A-11. Judicial review; appeal to supreme court of appeals; legal representation for administrator.

(a) Any person adversely affected by a decision of the administrator rendered after a hearing held shall be entitled to judicial review. All of the pertinent provisions of sectionfour, article five, chapter twenty-nine-a of this code shall apply to and govern such judicial review with like effect as if the provisions of said section four were set fourth in extenso in this section.
(b) The judgment of the circuit court shall be final unless reversed, vacated or modified on appeal to the supreme court of appeals, except that the petition seeking such review must be filed with said supreme court of appeals within thirty days from the date of entry of the judgment of the circuit court.
(c) Legal counsel and services for the administrator in all appeal proceedings in any circuit court and the supreme court of appeals shall be provided by the attorney general or his or her assistants and in any circuit court by the prosecuting attorney of the county as well, all without additional compensation. The administrator, with the written approval of the attorney general, may employ special counsel to represent him or her at any such appeal proceedings.

§22-8A-12. Injunctive relief.

(a) Whenever it appears to the administrator that any person has been or is violating or is about to violate any provision of this article, any reasonable rule promulgated by the administrator hereunder or any order or final decision, the administrator may apply in the name of the state to the circuit court of the county in which the violations or any part thereof has occurred, is occurring or is about to occur, or the judge thereof in vacation, for an injunction against such person andany other persons who have been, are or are about to be, involved in any practices, acts or omissions, so in violations, enjoining such person or persons from any such violation or violations, Such application may be made and prosecuted to conclusion whether or not any such violation or violations have resulted or shall result in prosecution or conviction under the provisions of section fourteen of this article.
(b) Upon application by the administrator, the circuit courts of this state may by mandatory or prohibitory injunction compel compliance with the provisions of this article, the reasonable rules promulgated by the administrator hereunder and all orders and final decisions of the administrator. The court may issue a temporary injunction in any case pending a decision on the merits of any application filed. Any other section of this code to this code to the contrary notwithstanding, the state shall not be required to furnish bond or other undertaking as a prerequisite to obtaining mandatory, prohibitory or temporary injunctive relief under the provisions of this article.
(c) The judgment of the circuit court upon any application permitted by the provisions of this section shall be final unless reversed, vacated or modified on appeal to the supreme court of appeals. Any such appeal shall be sought in the manner and within the time provided by law for appeals from circuit courts in other civil actions.
(d) The administrator shall be represented in all such proceedings by the attorney general or his assistants and in suchproceedings in the circuit courts by the prosecuting attorneys of the several counties as well, all without additional compensation. The administrator, with the written approval of the attorney general, may employ special counsel to represent the commissioner in any such proceedings.
(e) If the administrator refuses or fails to apply for an injunction to enjoin a violation or threatened violation of any provision of this article, any reasonable rule promulgated hereunder or any order or final decision of the administrator, within ten days after receipt of a written request to do so by any person who is or will be adversely affected by such violation or threatened violation, the person making such request may apply in his own behalf for an injunction to enjoin such violation or threatened violation in any court in which the administrator might have brought suit. The administrator shall be made a party defendant in such application in addition to the person or persons violating or threatening to violate any provision of this article, any reasonable rule promulgated by the administrator hereunder or any order or final decision of the administrator. The application shall proceed and injunctive relief may be granted without bond or other undertaking in the same manner as if the application had been made by the administrator.

§22-8A-13. Special oil and gas conservation tax.

Owners of leases on oil or gas for the exploration, development or production of oil or natural gas shall pay to the administrator a special oil and gas conservation tax of threecents for each acre under lease, excluding from the tax the first twenty-five thousand acres. The administrator shall deposit with the treasurer of the state of West Virginia, to the credit of the special oil and gas conservation fund, all taxes collected hereunder. This tax shall be paid as provided annually on or before the first day of July, one thousand nine hundred ninety-two, and on or before the first day of July in each succeeding year.

§22-8A-14. Penalties.

(a) Any person who violates any provision of this article, any of the reasonable rules promulgated by the administrator hereunder or any order or any final decision of the administrator, other than a violation covered by the provisions of subsection (b) of this section, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than one thousand dollars, and each day that a violation continues shall constitute a new and separate violation.
(b) Any person who, for the purpose of evading any provision of this article, any of the reasonable rules promulgated by the administrator hereunder or any order or final decision of the administrator, shall make or cause to be made any false entry or statement in a report required under the provisions of this article, any of the reasonable rules promulgated by the commissioner hereunder or any order or final decision of the administrator or shall make or cause to be made any false entry in any record, account or memorandum required under theprovisions of this article, any of the reasonable rules promulgated by the administrator hereunder or any order or any final decision of the administrator or who shall omit, or cause to be omitted, from any such record, account memorandum, full, true and correct entries, or shall remove from this state or destroy, mutilate, alter or falsify any such record, account or memorandum, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than five thousand dollars, or imprisoned in the county jail not more than six months, or both fined and imprisoned.
(c) Any person who knowingly aids or abets any other person in the violation of any provision of this article, any of the reasonable rules promulgated by the administrator hereunder or any order or final decision of the administrator, shall be subject to the same penalty as that prescribed in this article for the violation by such other person.
CHAPTER 22B. OIL AND GAS.
ARTICLE 2. OIL AND GAS PRODUCTION DAMAGE COMPENSATION.

§22B-2-10. Notice to surface landowner of intent to drill oil or gas well; compensation for damages to surface; restoration of surface.

(a) As used in this section:
(1) "Completion of the well" means completion of those processes necessary before production occurs, including the laying of flow lines and the construction of the tank battery. If the well is not productive, the date of completion of the wellshall be the day it is plugged and abandoned;
(2) "Drilling operations" means the drilling, deepening or conversion of a well for oil or gas production, core hole for oil or gas purposes, or drill hole for a stratigraphic test for oil or gas purposes;
(3) "Entry" means the moving upon the surface of land with equipment to commence drilling operations, but does not include, entry for the survey for or ascertaining or identification of a well location;
(4) "New well" means a well that is spudded after the first day of July, one thousand nine hundred ninety-three, and does not utilize any part of a well bore or drilling location that existed prior to that date;
(5) "Operator" means the person, whether the owner or not, who applies for or holds a permit for well work or who is named as the principal on a bond for a permit for a well that was issued by the department;
(6) "Person" means any natural person, corporation, firm, partnership, venture, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind, and includes any government or any political subdivision or agency thereof;
(7) "Production operation" means the operation of a well for the production of oil or gas, including all acts, structures, equipment and roadways necessary for the operation;
(8) "Surface owner" means the person in whose name thesurface of the land on which drilling operations are contemplated is assessed for purposes of taxes imposed according to the records of the county assessor of the county where the land is located as certified by the assessor.
(b) Notwithstanding other provisions of this article in conflict, this section is applicable only for the drilling operations of new wells except as provided in subsection (g) of this section. This section does not apply for reworking operations on a well. This section is applicable only when the surface owner has not consented in writing to the drilling operations in a document separate from the severance deed or any lease. There has been a complete severance of the ownership of the oil and gas from the ownership of the surface other than those necessary to develop the minerals.
(c)(1) Prior to commencement of the drilling of a well, the operator shall give written notice to the surface owner of the operator's intent to commence drilling operations.
(2) The operator shall, for the purpose of giving notice, secure from the assessor's office within ninety days prior to the giving of the notice, a certification which identifies the person in whose name the lands on which drilling operations are to be commenced are assessed at the time the certification is made. For notice purposes, the written certification made by the assessor of the surface owner satisfied the requirements of this section.
(3) The notice required to be given by the operator to thesurface owner shall identify the following:
(A) The details of the proposed entry on the surface for drilling operations and the date on or after which drilling operations are expected to commence;
(B) The name, address and telephone number of the operator;
(C) An offer to discuss with the surface owner those matters set forth in subsection (d) of this section prior to commencement of drilling operations.
(4) If the surface owner elects to meet with the operator, the operator shall honor the request to meet at a mutually agreed time and place within the limitations set forth herein. Failure of the surface owner to contact the operator at least fifteen days after receiving the notice shall be conclusively deemed a waiver of the right to meet by the surface owner. The meeting shall be scheduled between the hours of nine o'clock a.m. and nine o'clock p.m. of the same day, and shall be prior to entry onto the surface land for any purpose. Unless agreed to otherwise, the meeting place shall be located within the county in which drilling operations are to be commenced where the operator or his or her agent shall be available to discuss with the surface owner or his or her agent those matters set forth in subsection (d) of this section
(5) The notice shall be given to the surface owner by either:
(A) Certified mail addressed to the surface owner at the address shown in the certification obtained from the assessor,which shall be postmarked at least thirty days prior to the commencement of drilling operations; or
(B) Personal delivery to the surface owner at least twenty days prior to the commencement of drilling operations.
(6) Notice to the surface owner as defined in this section shall be deemed conclusive notice of rights under this section to the record owners of all interest in the surface.
(d) The operator, or his agent shall, if the surface owner accepts the offer to discuss, be available at the time agreed, date and place to discuss with the surface owner the following:
(1) Placement of roads to be constructed by the operator;
(2) Points of entry upon the surface for drilling operations;
(3) Construction and placement of pits used for drilling operations;
(4) Restoration of fences to be cut in order to make entry upon the surface for drilling operations;
(5) Use of water on the surface of the lands;
(6) Removal of trees;
(7) Surface water drainage changes caused by drilling operations;
(8) Location of well head;
(9) Location of pipeline;
(10) Location of permanent equipment such as storage tanks and dryers; and
(11) The operators' exercise of other rights to use of thesurface.
(f) The surface owner will be entitled to damages as set forth in article two, chapter twenty-two-b of this code.
(g) In conjunction with the plugging and abandonment of any well or the reworking of any well, the operator shall restore the surface and any improvements thereon to a condition as near as practicable to their condition prior to commencement of the work. The surface owner and operator may waive this requirement in writing, subject to the approval of the division that the waiver is in accordance with its administrative regulations.

CHAPTER 36. ESTATES IN PROPERTY.

ARTICLE 2A. PRESERVATION OF SURFACE OWNERS' RIGHTS.

§36-2A-1. Findings, purpose and public policy.

The Legislature hereby makes the finding of fact that the historical practice of holding the surface holder as the inferior estate and the mineral estate, severed therefrom the superior (or dominant) estate has:
(a) Caused excessive and significant disturbance of the surface lands and structures thereon, including residential homes throughout the state;
(b) Caused excessive mineral exploitation of mining and drilling by mineral owners who were not limited by countervailing surface interests and were not limited by tortious damages in their excessive acts;
(c) Caused pollution of the waters and surface lands of the state;
(d) Caused significant loss of subjacent support, caving in of surface lands and settling of surface lands; and
(e) Caused bad public policy.

§36-2A-2. Estates equal.

The surface estate in any property in the state shall be equal in the law with any and all mineral interests severed therefrom, and that each constitutes an interest in land equal to the other.

§36-2A-3. Findings, purpose and public policy.

No easement on an interest in surface real property by an interest in underlying minerals is implied.

§36-2A-4. Unequal estates void.

Grant or reservation in a conveyance of real property, seeking to hold subservient all interests in the preservation of the beneficial use of interests in the surface, is null and void to the extent they are not equal.

§36-2A-5. Presumption of equal rights.

When the ownership of any interest in minerals in real property is separated from ownership of any interest in the surface, it is presumed that the intent of the parties and the language of the instruments require an equal balance between the interest of the surface interest owner and the interest of the mineral interest owner.
§36-2A-6. Measure of damages.
(a) The measure of damages, for damages caused to the surface estate by the holder of any mineral interests, shall bethe standard of negligence as in tortious acts and shall not be the breech of contract standard of whether the acts causing damage were necessary or unnecessary to the use and enjoyment of the mineral estate.
(b) The Legislature declares that the public policy of the state for compensation and damages to surface owners in the state shall not be diminished by any prevision in a deed, lease or other conveyance of property in the state.

CHAPTER 37B. LAND REUNION ACT.

ARTICLE 1. SURFACE OWNER OR LESSEE'S OPTION TO PURCHASE MINERALS.

§37B-1-1. Short title.

This article shall be known as the "West Virginia Land Reunion Act."

§37B-1-2. Application of article.

(a) No mineral interest may be transferred, except as provided in subsection (b) of this section, unless the mineral interest owner serves a mineral interest offering statement as described in section four of this article or as required by the other provisions of the article.
(b) A mineral interest offering statement described in section four of this article need not be prepared or served in the case of:
(1) A disposition of a mineral interest pursuant to court order;
(2) A disposition of a mineral interest by a government orgovernmental agency;
(3) A disposition of a mineral interest by foreclosure or deed in lieu of foreclosure;
(4) A disposition of a mineral interest situated wholly outside this state;
(5) The assignment of a lease of a mineral interest which lease does not include an option to purchase the interest; or
(6) A lease of a mineral interest which does not include an option to purchase the interest and which does not extend for greater than ten years, including any rights to renew or release, unless extended solely by commercial production.

§37B-1-3. Declaration of surface ownership or leasehold interest.

For purposes of notification under this article, any owner or lessee of the surface overlying a mineral interest may file a declaration of his or her interest in such land with the clerk of the county commission in the county where the mineral interest is located. The clerk shall file and index such declaration in accordance with section two, article one, chapter thirty-nine of this code. The clerk shall also index the declaration in the index of liens under the names of the owners and lessees of any mineral interests as those names are set forth in the declaration. Filing of the declaration of surface ownership or leasehold interest shall entitle the surface owner or lessee to receive the notices provided for in subsection (a) of section three of this article. The clerk of the county commission ofeach county shall provide forms for these declarations to the public at no charge.

§37B-1-4. Options to purchase.

(a) A mineral interest owner shall serve each person who has filed a declaration of surface ownership or leasehold interest pursuant to section two of this article with a copy of the mineral interest offering statement required by section four of this article, and with a notice of right to purchase mineral interest describing the provisions of this article. Service shall be made pursuant to the West Virginia rules of civil procedure for trial courts of record or by certified mail, return receipt requested. The mineral interest owner shall also publish as a Class I legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code a notice of sale of mineral interest describing the property and stating where complete copies of the mineral interest offering statement and the notice of right to purchase mineral interest may be obtained. The publication area of the notice of sale of mineral interest shall be the counties in which any part of the mineral interest is located. The state auditor shall promulgate rules in accordance with article three, chapter twenty-nine-a of this code prescribing the form of the declaration of surface ownership or leasehold interest, notice of right to purchase mineral interest and notice of sale of mineral interest prescribed by this article.
(b) For thirty days after delivery of service of the noticesdescribed in subsection (a) of this section or for sixty days after first publication of the Class I legal advertisement required by subsection (a), whichever is later, the mineral interest owner may not transfer the mineral interest without the written consent of the person entitled to notice under this section. If a surface owner or lessee within that period delivers a title opinion certified by an attorney at law that he owns or leases an interest in the surface and he or she tenders payment for all the mineral interest or a part of the mineral interest on the terms and conditions and in the amount specified in the mineral interest offering statement, then the mineral interest owner shall, for the consideration tendered, transfer the mineral interest, or a part of the mineral interest to the surface owner or lessee. If more than one surface owner or lessee delivers such a title opinion and so tenders payment, then the surface owners or lessees shall be sold the mineral interest as tenants in common in proportion to their interests in the overlying surface.
§37B-1-5. Mineral interest offering statement.
(a) A mineral interest offering statement shall contain or fully and accurately disclose:
(1) The name and principal address of the mineral interest owner or his or her agent;
(2) A general description of the mineral interest, including the county, district, watershed and metes and bounds;
(3) A brief narrative description of any outstanding leasesaffecting the mineral interest;
(4) A description of any liens, defects or encumbrances on or affecting the title to the mineral interest;
(5) A description of any financing offered by the mineral interest owner;
(6) The terms and significant limitations of any warranties provided by the mineral interest owner, including statutory warranties and limitations on the enforcement thereof or on damages; and
(7) A complete description of all terms, conditions and consideration of any offer for sale made by the mineral interest owner or of any agreement or contract for transferring an interest in the whole or a part of the mineral interest.

NOTE: The purpose of this bill is to enact the West Virginia Land Owners' Rights and Protection Act.

(1) Revise the common law which causes the surface estate to be subservient to the mineral developer's estate to be changed so that the estates are equal;

(2) To require communication between the mineral developer and the surface owner before survey crews, etc. come on to land and start making a specific plan to development;

(3) To promote the reunion of ownership of the minerals with ownership of the surface instead of allowing separate ownership of minerals to last forever with continued fractionalization of ownership by;

(A) Returning ownership of minerals upon which the taxes have not been paid to the owner of the surface estate instead of selling them at sheriff tax sales (subject to the original mineral owners' rights to redemption);

(B) Giving the surface owner an option to buy the minerals under the surface owner's property if the minerals are being soldby the mineral owner;

4. To require shallow well pooling and unitization in order to;

(A) prevent reduction in the total amount of oil and gas produced by the drilling of too many wells too close together in the same formation;

(B) Assure that the owners of all of the land from which the oil or gas is being produced receive their fair share of the royalties;

(C) Reduce the cost of oil and gas to consumers by preventing the drilling of more wells than is necessary to produce the same amount of oil and gas; and

(D) Reduce the disturbance of the surface of the land by the drilling of unnecessary wells.

The bill also places a tax on certain oil and gas leases and it provides criminal penalties for violations.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§22-8A, §22B-2-10, §36-2A and chapter 37B are new; therefore, strike-throughs and underscoring have been omitted.