Senate Bill No. 593
(By Senator Wells)
____________
[Introduced February 17, 2010; referred to the Committee on
Energy, Industry and Mining; and then to the Committee on
Government Organization.]
____________
A BILL to amend §5A-11-3 and §5A-11-6 of the Code of West Virginia,
1931, as amended, all relating to the use of mineral rights to
benefit state agencies, institutions or departments.
Be it enacted by the Legislature of West Virginia:
That §5A-11-3 and §5A-11-6 of the Code of West Virginia, 1931,
as amended, be amended and reenacted, all to read as follows:
ARTICLE 11. PUBLIC LAND CORPORATION.
§5A-11-3. Public Land Corporation, powers and duties.
(a) The corporation is hereby authorized and empowered to:
(1) Acquire from any persons or the State Auditor or any
local, state or federal agency, by purchase, lease or other
agreement, any lands necessary and required for public use;
(2) Acquire by purchase, condemnation, lease or agreement,
receive by gifts and devises or exchange, rights-of-way, easements, waters and minerals suitable for public use;
(3) Sell or exchange public lands where it is determined that
the sale or exchange of such tract meets any or all of the
following disposal criteria:
(A) The tract was acquired for a specific purpose and the
tract is no longer required for that or any other state purpose;
(B) Disposal of the tract serves important public objectives
including, but not limited to, expansion of communities and
economic development which cannot be achieved on lands other than
public lands and which clearly outweigh other public objectives and
values including, but not limited to, recreation and scenic values
which would be served by maintaining the tract in state ownership;
or
(C) The tract, because of its location or other
characteristics, is difficult and uneconomic to manage as part of
the public lands and is not suitable for management by another
state department or agency.
(4) Sell, purchase or exchange lands or stumpage for the
purpose of consolidating lands under state or federal government
administration subject to the disposal criteria specified in
subdivision (3) of this subsection;
(5) Negotiate and effect loans or grants from the government
of the United States or any agency thereof for acquisition and
development of lands as may be authorized by law to be acquired for
public use;
(6) Expend the income from the use and development of public
lands for the following purposes:
(A) Liquidate obligations incurred in the acquisition,
development and administration of lands, until all obligations have
been fully discharged;
(B) Purchase, develop, restore and preserve for public use,
sites, structures, objects and documents of prehistoric,
historical, archaeological, recreational, architectural and
cultural significance to the State of West Virginia; and
(C) Obtain grants or matching moneys available from the
government of the United States or any of its instrumentalities for
prehistoric, historic, archaeological, recreational, architectural
and cultural purposes.
(7) Designate lands, to which it has title, for development
and administration for the public use including recreation,
wildlife stock grazing, agricultural rehabilitation and
homesteading or other conservation activities;
(8) Enter into leases as a lessor for the development and
extraction of minerals, including coal, oil, gas, sand or gravel
on
behalf of itself or any state agencies, institutions or
departments, except as otherwise circumscribed herein:
Provided,
That leases for the development and extraction of minerals shall be
made in accordance with the provisions of sections five and six of
this article. The corporation
or the state agencies, institutions
or departments for which it is acting, shall reserve title and ownership to the mineral rights in all cases;
(9) Convey, assign or allot lands to the title or custody of
proper departments or other agencies of state government for
administration and control within the functions of departments or
other agencies as provided by law;
(10) Make proper lands available for the purpose of
cooperating with the government of the United States in the relief
of unemployment and hardship or for any other public purpose.
(b) There is hereby continued in the state Treasury a special
Public Land Corporation Fund into which shall be paid all proceeds
from public land sales and exchanges and rents, royalties and other
payments from mineral leases:
Provided, That all royalties and
payments derived from rivers, streams or public lands acquired or
managed by the Division of Natural Resources pursuant to section
seven, article one, chapter twenty of this code and section two,
article five, chapter twenty of this code shall be retained by the
Division of Natural Resources:
Provided, however, That all free
gas, sand, gravel or other natural resources derived from a lease
or contract made pursuant to this article will be used to benefit
the state agencies, institutions, or departments for which the
corporation was acting or to benefit any state agencies,
institutions, or departments having adjacent property. The
corporation may acquire public lands from use of the payments made
to the fund, along with any interest accruing to the fund. The
corporation shall report annually, just prior to the beginning of the regular session of the Legislature, to the finance committees
of the Legislature on the financial condition of the special fund.
The corporation shall report annually to the Legislature on its
public land holdings and all its leases, its financial condition
and its operations and shall make such recommendations to the
Legislature concerning the acquisition, leasing, development,
disposition and use of public lands.
(c) All state agencies, institutions, divisions and
departments shall make an inventory of the public lands of the
state as may be by law specifically allocated to and used by each
and provide to the corporation a list of such public lands and
minerals, including their current use, intended use or best use to
which lands and minerals may be put:
Provided, That the Division
of Highways need not provide the inventory of public lands
allocated to and used by it, and the Division of Natural Resources
need not provide the inventory of rivers, streams and public lands
acquired or managed by it. The inventory shall identify those
parcels of land which have no present or foreseeable useful purpose
to the State of West Virginia. The inventory shall be submitted
annually to the corporation by August 1. The corporation shall
compile the inventory of all public lands and minerals and report
annually to the Legislature by no later than January 1, on its
public lands and minerals and the lands and minerals of the other
agencies, institutions, divisions or departments of this state
which are required to report their holdings to the corporation as set forth in this subsection, and its financial condition and its
operations.
(d) The corporation will coordinate with other state agencies,
institutions, and departments in order to develop and execute plans
to utilize those organizations' mineral rights which benefit their
operations or the operations of any other state agencies,
institutions, or departments.
§5A-11-6. Competitive bidding and notice requirements before the
development or extraction of minerals on certain
lands; related standards.
(a) The corporation may,
for itself or on behalf of any state
agencies, institutions or departments, enter into a lease or
contract for the development of minerals, including, but not
limited to, coal, gas, oil, sand or gravel 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:
Provided, however, That the corporation or the
state agencies, institutions or departments for which it is acting
will not be required to post any type of surety or performance bond
with the West Virginia Department of Environmental Protection or
any other state agency when executing a lease for the development
of minerals.
(b) With the exception of deep mining operations which are already in progress and permitted as of July 5, 1989, the
extraction of coal by deep mining methods under state forests or
wildlife refuges may be permitted only if the lease or contract
provides that no entries, portals, air shafts or other incursions
upon and into the land incident to the mining operations may be
placed or constructed upon the lands or within three thousand feet
of its boundary.
(c) Any lease or contract entered into by the corporation for
the development of minerals shall reserve to the state all rights
to subjacent surface support with which the state is seized or
possessed at the time of such lease or contract.
(d) Notwithstanding any other provisions of the code to the
contrary, nothing herein may be construed to permit extraction of
minerals 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.
(e) The corporation may enter into a lease or contract for the
development of minerals where 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
publication shall be each county in which the minerals are located.
(f) The minerals 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 give bond
for the proper performance of the contract or lease as the
corporation designates:
Provided, That the corporation may reject
any and all bids and to readvertise for bids.
(g) If the provisions of this section have been complied with,
and no bid equal to or in excess of the fair market value 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 the minerals, but the lease or contract price may
not be less than the fair market value.
(h) Any lease or contract for the development of minerals
entered into after the effective date of this section shall be made
in accordance with the provisions of this section and section five
of this article.
(i) The corporation will consult with the office of the
Attorney General to assist the corporation in carrying out the
provisions of this section.
(j) The corporation shall consult with an independent mineral
consultant and any other competent third parties with experience
and expertise in the leasing of minerals, to assist the corporation
in carrying out the provisions of this section, including
determining fair market value and negotiating terms and conditions
of mineral leases.
(k) Once the lessee commences the production of minerals and royalties become due and are paid to the Public Land Corporation,
the Public Land Corporation shall 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 minerals as produced under the lease agreement.
NOTE: The purpose of this bill is to use of mineral rights to
benefit state agencies, institutions or departments.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.