WEST virginia Legislature

2018 regular session

Introduced

House Bill 4551

By Delegate Deem

[Introduced February 13, 2018; Referred
to the Committee on Energy then the Judiciary.]

A BILL to amend and reenact §55-12A-7 of the Code of West Virginia, 1931, as amended, relating to requiring the mineral estate of an unknown owner be sold to the legal surface owner at the fair market value of the mineral interest; providing that if the surface owner declines to purchase the estate, the estate shall be sold at auction to the highest bidder; setting forth requirements; and providing that all unclaimed royalties be transferred to the new owner.

Be it enacted by the Legislature of West Virginia:

ARTICLE 12A. LEASE AND CONVEYANCE OF MINERAL INTERESTS OWNED BY MISSING OR UNKNOWN OWNERS OR ABANDONING OWNERS.

§55-12A-7. When special commissioner may convey title in mineral interest to surface owner; form of deed; payment to surface owner; final report of special commissioner.

(a) (1) If an owner of any mineral interest leased under §55-12A-6 of this code remains unknown or missing after a diligent search, or does not disavow the abandonment, for a period of seven years from the date of the special commissioner's lease, the special receiver shall report the same to the court, whereupon the court shall enter an order naming those who then appear to be surface owners as additional parties and giving notice to them, pursuant to the West Virginia rules of civil procedure, of an opportunity to appear and present proof of ownership in fee of the surface estate. Upon a finding by the court of the present ownership in fee of the surface estate, the court shall: (i) order

(A) Order the special commissioner to convey to the proven surface owner, subject to the special commissioner's lease, the mineral interest specified in the motion, at a price determined by the Division of Oil and Gas to be the fair market value of that interest, by a deed substantially in the form specified in subsection (b) of this section; and (ii) order

(B) Order the special receiver to pay to the surface owner the funds which have accrued to the credit of the mineral interests specified in the motion to the date of his or her report after payment of all allowable fees, expenses and court costs, including special commissioner's fees paid or to be paid in amounts determined by the court.

(2) If the surface owner declines to purchase the mineral interest pursuant to subdivision (1) of this subsection, the special commissioner shall sell the mineral interest at public auction in accordance with the applicable provisions of this code. The special commissioner shall convey to the new mineral interest owner, subject to the special commissioner's lease, the mineral interest specified in the motion, by a deed substantially in the form specified in subsection (b) of this section and order the special receiver to pay to the new mineral interest owner the funds which have accrued to the credit of the mineral interests specified in the motion to the date of his or her report after payment of all allowable fees, expenses and court costs, including special commissioner's fees paid or to be paid in amounts determined by the court.

(3) After the date of the special commissioner's deed, the surface owner or new mineral interest owner grantee shall be entitled to receive all proceeds under the lease attributable to the mineral interests specified in the deed.

(2) (4) If the boundaries of the mineral tract subject to the special commissioner's lease encompass two or more surface tracts, a separate deed shall be made for the mineral interest underlying each surface tract. If a surface tract is owner owned by more than one person, the deed respecting that surface tract shall convey the mineral interest according to the surface estate and interest of each surface owner.

(b) The special commissioner's deed may be made in the following form, or to the same effect:

This deed, made the _____day of _________________, 19___, between ______________________________, special commissioner, grantor, and _____________________________, grantee,

Witnesseth, that whereas, grantor, in pursuance of the authority vested in him or her by an order of the circuit court of _____________ county, West Virginia, entered on the _____day of _____________, 19___, in civil action no. ________ therein pending, to convey the mineral interest more particularly described below to the grantee,

Now, therefore, this deed witnesseth: That grantor grants unto grantee, subject to the special commissioner's lease mentioned below, and further subject to all other liens and encumbrances of record, that certain mineral interest in _______________ county, West Virginia, more particularly described in the cited order of the circuit court as follows: (here insert the description in the order); and being (here specify "all" or "a portion") of the mineral interest described in that certain special commissioner's lease dated ___________, 19___, of record in the office of the clerk of __________ county, in _________book______, at page ____.

Witness the following signature.

_________________________________

Special Commissioner

(c) Upon the delivery of the deed or deeds and the payment or payments as directed in subsection (a) of this section, the special commissioner shall make a final report to the court; and upon approval thereof, the court shall order the discharge of the special commissioner's bond.

(d) Prior to the delivery of the special commissioner's deed, no deed from a surface owner to another shall sever ownership of the surface as such from ownership of any benefits under this article. Any deed purporting to create such a severance shall be void.

NOTE:  The purpose of this bill is to require the mineral estate of an unknown owner be sold to the legal surface owner at the fair market value of the mineral interest. The bill provides that if the surface owner declines to purchase the estate, the estate shall be sold at auction to the highest bidder. The bill sets forth requirements. The bill provides that all unclaimed royalties be transferred to the new owner.

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