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.