DRAFT ONLY - APPROVAL PENDING

Wyoming Legislature

Committee Meeting Summary of Proceedings

Split Estates Joint Executive – Legislative Committee

Committee Meeting Information

October 14 & 15, 2004

Holiday Inn

300 West "F" Street

Casper, Wyoming

Committee Members Present

Senator Bill Hawks, Co-Chairman

Representative Colin Simpson, Co-Chairman

Senator Ken Decaria

Senator C.L. “Chuck” Townsend

Representative Saundra Meyer

Representative Mark Semlek

Governor Appointees Present

Frankie Addington

J.J. Healy

Nancy Sorenson

Jerry Barnes

Rick Robitaille

Legislative Service Office Staff

John Rivera, Senior Staff Attorney

Others Present at Meeting

Please refer to Appendix 1 to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.

Call To Order (October 14, 2004)

Chairman Simpson called the meeting to order at 8:10 a.m.  The following sections summarize the Committee proceedings by topic.  Please refer to Appendix 2 to review the Committee Meeting Agenda.

Approval of Minutes

Minutes from the August 31, 2004 and the September 20, 2004 Committee meeting were approved without changes.

Proposed Draft Legislation, 05LSO-0120.W8, Split estates-procedures for oil and gas operations

Chairman Simpson explained the draft bill (Appendix 3) with the changes approved by the Committee at the meeting in September and other changes developed by the cochairmen and staff based on concerns expressed by Committee members at that meeting.  Some of the latter changes with respect to damages are adapted from the Montana Code.  He advised that the definitions for "agricultural production" and "tract of land" would be deleted from the bill if, after consideration of amendments at this meeting, the terms would not otherwise appear in the bill, pursuant to motions made at the September meeting.

Ms. Sorenson advised of the amendments prepared and distributed by the Landowners Association of Wyoming (Appendix 4). Mr. Robitaille explained the amendments he had prepared for the meeting (Appendices 5 and 6) relating to general amendments to clarify language within the bill and to provide an alternative to avoid potentially conflicting bonding requirements of the state and federal governments.  Representative Berger distributed a copy of proposed amendments she requested the Committee to consider (Appendix 7).

The Committee began working the bill and taking action on amendments that were proposed on each page before proceeding to the next page of the bill.

The following amendments were adopted by the Committee:

• Page 1-line 12,  delete "loss" insert "damages";
• Page 2-line 25,  after "or" insert "other consideration that may include";
• Page 2-line 26,  after "equipment" delete balance of line and insert ";";
• Page 2-line 27,  delete entirely;
• Page 4-line 10, delete "mineral" insert "oil and gas";
• Page 5-line 16, after ";" insert "negotiations";
• Page 5-line 22, delete "and" insert ".  The oil and gas operator";
• Page 5-line 26, delete "provided he" insert ".  The oil and gas operator";
• Page 5-line 27, Delete "be liable";
• Page 5-lines 28 through 30,        delete entirely;
• Page 6-line 1,    delete entirely;
• Page 6-line 2,    delete the line through "shall";
• Page 6-line 23   delete "prior to entry";
• Page 7-line 10,  before "An" insert "Obtaining";
• Page 7-line 11,  delete "access to the land and";
• Page 9-line 15,  after "any" insert "proposed"; delete "either party may recommend in" and insert "to";
• Page 10-line 5,  delete "and" insert "reclamation activities,";
• Page 10-line 6   after "payment" delete "of" and insert "for";
• Page 10-line 7,  delete "to the land incurred by the surface owner" and insert "caused";
• Page 10-line 24,             delete "negotiations";
• Page 10-line 26 through page 11-line 24, Chairman Simpson and staff would reorganize W.S. 30-5-403(a) extensively overnight and incorporate a motion to delete paragraphs (i) through (iii) of that subsection in the reorganization and to substitute language provided in an amendment offered by Representative Berger to those lines (see Appendix 7), for consideration by the Committee on the next day;
• Page 12-line 14,             after "approvals" insert "to secure a drilling permit,";
• Page 12-lines 12 through 17,       move W.S. 30-5-403(b), as amended, to W.S. 30-5-404 as a new subsection (d);
• Page 13-line 8,  before "operations" insert "oil and gas";
• Page 13-line 11,             delete "in the plan of work and oil and gas operations";
• Page 13-lines 6 through 13,        move W.S. 30-5-403(d), as amended, to W.S. 30-5-402 as a new subsection (g);
• Page 14-line 16,             delete "three thousand dollars ($3,000.00)" insert "two thousand dollars ($2,000.00)";
• Page 14-line 18,             after "bond" insert "or other guaranty"; delete "not less";
• Page 14-line 19,             delete the line through "($75,000.00)";
• Page 14-line 20,             delete "all wells drilled in the state" insert "oil and gas operations as identified"; after "operator" insert "in the written notice required under W.S. 30-5-402(d)"; after "." insert "The minimum amount of the bond or other guaranty provided in this subsection is not intended to establish any amount for reasonable and foreseeable damages.";
• Page 14-line 33,             after "(c)" insert "Within seven (7) days following receipt of the surety bond or other guaranty,";
• Page 15-line 1,  after "guaranty" insert "and provide to the surface owner a copy of the statement required under W.S. 30-5-403(a)";
• Page 15-line 17,             delete "contest" insert "appeal";
• Page 15-line 18,             after "commission" insert "to the district court"; delete "contested";
• Page 15-line 19,             delete "case procedures of the";
• Page 16-line 18,             after "guaranty" insert "for reclamation and compliance with rules and orders of the commission";
• Page 18-line 24,             after "operator" insert "and the Wyoming oil and gas commission"; after discussion, the Committee agreed to add a definition of "commission"  in W.S. 30-5-401(a) and to make a global change in the bill to make all references to the commission uniform;
• Page 21-before line 14, insert "30-5-410. Applicability.  This act shall not apply to a public utility regulated by the Wyoming public service commission or to a natural gas pipeline regulated by the federal energy regulatory commission.";
• Page 21-line 14,             delete "or" insert ",";
• Page 21-line 15,             after "consent" insert ", prior regulatory approval or judicial order or decree";
• Because neither "agricultural" or "tract of land" were reinserted into the bill, the definition for each was unnecessary and would be deleted pursuant to amendments adopted at the September meeting.

The following amendments were proposed, but either were withdrawn or failed adoption:

• Page 1-line 12, after "for" insert "land use and"; after discussion this amendment and numerous other conforming amendments proposed in Appendix 4 (see amendments ##1, 5, 7, 16 and 20) failed;
• Page 6-line 21,  delete "discussed" insert "agreed upon";
• Page 9-line 19,  after "act" insert "and a copy of the controlling oil and gas lease",
• Page 14-lines 15 through 20,                   delete entirely and insert "(b) The surety bond or other guaranty shall be in an amount established by the Wyoming Oil and Gas Conservation Commission, based on information provided by the oil and gas operator and equal to the surface owner’s proposed amount, so long as the amount is consistent with the proposed oil and gas operations pursuant to 30-5-402(e).”;
• Page 14-line 19,             delete "seventy-five thousand dollars ($75,000.00)" insert "twenty-five thousand dollars ($25,000.00)";
• Page 14-line 20,             after "." insert "The commission may accept a surety bond that is acceptable to and filed with another agency of the state or an agency of the federal government that secures payment of surface damages resulting from oil and gas operations.";
• Page 15-line 7,  after "commission" insert ", in conjunction with the Wyoming agricultural mediation board,";
• Page 16-lines 5 through 11,        delete entirely and insert "(d) Upon agreement of all parties, payment for all surface use and damages, or final resolution of the judicial appeal process for any action for all surface use and damages, and that all damages ordered have been paid, the commission shall immediately release the oil and gas operator from any payment obligation to the surface owner for lands affected under the surety bond or other guaranty, as applicable.”;
• Page 17-line 6,  after "value" insert "of the tract of land";
• Page 17-line 25 through Page 18-line 2, delete the first sentence of W.S. 30-5-405(a)(iii);
• Page 18-line 3,  after "for" insert "actual";

During consideration of amendments to the bill, Chairman Simpson requested staff to research whether the Wyoming Supreme Court has any rules addressing the informal dispute resolution procedures in Article 6 of the Wyoming Eminent Domain Act.

Chairman Simpson advised that staff would incorporate the amendments adopted to 05LSO-0120.W8 to create a .W9 version of the bill for the Committee to consider at the meeting the next day.

Meeting Recess

The Committee recessed at 4:55 p.m.

Call To Order (October 15, 2004)

Chairman Simpson called the meeting to order at 8:00 a.m. 

Proposed Draft Legislation, 05LSO-0120.W9, Split estates-procedures for oil and gas operations

Chairman Simpson advised the Committee that staff had incorporated the amendments approved by the Committee on the previous day and the amendment to W.S. 30-5-403(a) that Chairman Simpson had prepared pursuant to discussions relating to reorganizing that subsection.  The new text in 05LSO-0120.W9 (Appendix 8) appears as highlighted text and language deleted appears as stricken text.  All previously highlighted, underscored or deleted text appears as normal text unless amended pursuant to Committee action in the meeting on the previous day.

While reviewing the changes incorporated into the previous version of the bill, the Committee adopted the following changes to the latest version of the bill:

• Page 1-line 12,  delete "damage" insert "damages";
• Page 2-line 12, after "commission" insert "and its authorized staff";
• Page 4-line 1,    delete "the state of";
• Page 4-line 2     delete the line through "to" insert "any person or governmental entity that owns";
• Page 9-line 13,  delete "scheduling" insert "offering to schedule";
• Page 10-line 12,             after "The" insert "oil and gas”;
• Page 10-line 13,             delete "and specify" insert ", specifying";
• Page 12-line 9,              delete "In the";
• Page 12-line 10,             delete "alternative" insert "At the request of the oil and gas operator"; delete "accept" insert "establish";
• Page 15-line 5,              after "The" insert "oil and gas";
• Page 15-line 16,             after "." insert "The commission may, at its sole discretion, release any surety bond, other guaranty or blanket bond related to particular lands if the oil and gas operator show just cause for the release.".

After all amendments had been discussed and acted upon, Senator Hawks moved, seconded by Representative Meyer, that the Joint Executive-Legislative Committee on Split Estates recommend in its report to the Joint Judiciary Interim Committee that the Joint Judiciary Interim Committee sponsor 05LSO-0120.W9, as amended.  The motion carried unanimously on a roll call with Senators Decaria, Hawks and Townsend, Representatives Meyer, Semlek and Simpson, Ms. Addington, Mr. Barnes, Mr. Healy, Mr. Robitaille and Ms. Sorenson voting aye.

Cochairmen Hawks and Simpson thanked all members of the Committee for their hard work and thoughtful consideration of the issues addressed by the Committee.  Chairman Simpson explained that the Cochairmen will work with staff to prepare a report to the Joint Judiciary Interim Committee, including the draft legislation which will be enumerated as 05LSO-0120.W10.  A copy of the bill will be provided to members of this Committee as soon as it is completed.

Meeting Adjournment

There being no further business, Co-Chairman Simpson adjourned the meeting at 10:05 a.m..

Respectfully submitted,

Senator Bill Hawks, Cochairman                                    Representative Colin Simpson, Cochairman