WEST virginia legislature

2020 regular session

Introduced

House Bill 4706

By Delegates Anderson, J. Kelly, Graves, Hansen, Pethtel, Evans, Miley, Higginbotham, Azinger, Paynter and Nelson

[Introduced February 05, 2020; Referred to the Committee on Energy then the Judiciary]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §37-4-9; and to amend and reenact §55-12A-7 of said code, all relating to providing transparency in government by creating reporting procedures and requirements concerning funds being held by fiduciaries, commissioners and receivers which are due to missing, unknown or unlocatable real estate interest owners from partition lawsuits and lawsuits concerning leasing and conveyancing of mineral interests by missing owners; providing reporting requirements to the State Treasurer, Legislature, and the Supreme Court of Appeals; defining and specifying contents of the reports; establishing reporting dates; providing for rule-making; and making technical changes.

Be it enacted by the Legislature of West Virginia:

CHAPTER 37. REAL PROPERTY.

ARTICLE 4. PARTITION.

§37-4-9. Reports concerning funds due to unknown or unlocatable interest owners; rule-making.

(a) Notwithstanding the requirements of §36-8-1 et seq. or any other section of the code, all special or general receivers, fiduciaries, commissioners or other persons or entities holding funds due under this article to owners of real property interests whose name or location is unknown or whose interests are otherwise undeliverable to the appropriate party shall provide an annual report concerning said funds to the State Treasurer with additional copies provided to the Joint Committee on Government and Finance and the Supreme Court of Appeals of the West Virginia. The first report shall be submitted on or before October 1, 2021; and each subsequent annual report will be submitted on or before October 1, of each year thereafter. Each annual report shall concern all funds held, managed, received or paid out on June 30, of the year the report is due and shall cover the prior 12-month time period.

(b) The report shall specifically identify each special or general receiver, fiduciary, commissioner or other person or entity responsible for the funds being held and managed; identify the circuit court granting the authority to hold and manage the funds; identify every case number under which authority to hold and manage the funds was granted; provide an aggregate total amount of funds being held and managed; provide an aggregate total amount of funds withdrawn during the period; provide an aggregate total amount of funds deposited during the period; identify every financial institution, government agency and business where the funds are being held or invested; and provide a range, highest and lowest, of percentage interest being paid by financial institutions, government agencies and businesses where the funds are being held or invested; and provide any other relevant information as determined by the State Treasurer.

(c) The State Treasurer, after consultation with the Supreme Court of Appeals of West Virginia, may create a standardized process for such reporting and shall propose rules for legislative approval, including emergency rules, in accordance with §29A-3-1 et seq. of this code to carry out the provisions of this section.

CHAPTER 55. ACTIONS, SUITS AND ARBITRATION; JUDICIAL SALE.

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; reports concerning funds due to unknown or unlocatable interest owners; rule-making.

(a) (1) If an owner of any mineral interest leased under section six of this article remains unknown or missing, 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 the special commissioner to convey to the proven surface 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 (ii) 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. After the date of the special commissioner’s deed, the surface owner grantee shall be entitled to receive all proceeds under the lease attributable to the mineral interests specified in the deed.

(2) 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. The provisions of any Any deed granting or reserving an interest purporting to create such a severance shall be void.

(e) (1) Notwithstanding the requirements of this article or any other section of code, all special or general receivers, fiduciaries, commissioners or other persons or entities holding funds due under this article to owners of real property interests whose name or location is unknown or whose interests are otherwise undeliverable to the appropriate party, shall provide an annual report concerning said funds as provided in subdivision (2) of this subsection to the State Treasurer with additional copies provided to the Joint Committee on Government and Finance and the Supreme Court of Appeals of West Virginia. The first report shall be submitted on or before October 1, 2021; and each subsequent annual report will be submitted on or before October 1 of each year thereafter. Each annual report shall concern all funds held, managed, received or paid out on June 30 of the year the report is due and shall cover the prior 12-month time period.

(2) The report shall specifically identify each special or general receiver, fiduciary, commissioner or other person or entity responsible for the funds being held and managed; identify the circuit court granting the authority to hold and manage the funds; identify every case number under which authority to hold and manage the funds was granted; provide an aggregate total amount of funds being held and managed; provide an aggregate total amount of funds withdrawn during the period; provide an aggregate total amount of funds deposited during the period; identify every financial institution, government agency and business where the funds are being held or invested; and provide a range, highest and lowest, of percentage interest being paid by financial institutions, government agencies and businesses where the funds are being held or invested; and provide any other relevant information as determined by the State Treasurer.

(3) The State Treasurer, after consultation with the Supreme Court of Appeals of West Virginia, may create a standardized process for such reporting and shall propose rules for legislative approval, including emergency rules, in accordance with §29A-3-1 et seq. of this code to carry out the provisions of this section.

NOTE: The purpose of this bill is to provide transparency in government by creating reporting procedures and requirements concerning funds being held by fiduciaries, commissioners and receivers which are due to missing, unknown or unlocatable real estate interest owners from partition lawsuits and lawsuits concerning leasing and conveyancing of mineral interests by missing owners. The bill provides reporting requirements to the State Treasurer, Legislature and the Supreme Court of Appeals and defines the contents of the reports. The bill establishes reporting dates, provides for rule-making; and makes technical changes.

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