Volume 3, Number 31 - October 30, 2003
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Sicking the biting dog on the land man
Tuesday, about 20 Sublette County residents attended a meeting at the Daniel Community Center to talk about problems with split estates and how the Wyoming Legislature should address these problems.
House District 22 Representative Monte Olsen of Daniel and HD 19 Representative Owen Peterson of Mountain View, both members of the House Judiciary Committee, sponsored the meeting in preparation of a full committee meeting the following day in Cody.
Peterson noted that Sublette County is now in the same position as Bridger Valley was some 20 years ago, with Overthrust Belt development.
"We learned some lessons down there, hard," Peterson said. "Believe me, you folks are on the verge ... it's going to be kind of a struggle here in Sublette County," Peterson said.
Robert Barnes of the Green River Ranch said his understanding is that one of the proposed bills includes provisions calling for damage payments based only on the agricultural value of the land.
"That seems to me a slap in the face, if not further down, to the landowner ... " Barnes said, noting that most of the land in Sublette County has high recreational value.
Barnes said, "It should be valued in the same way real estate is valued."
Kay Jensen noted that she and husband Wayne own property along the New Fork River where the major pipelines cross from the Pinedale Anticline. Jensen said she had an appraisal done on the property and was told, had the land not had the mineral use, it would have appraised at the same value as the Seven Mile River Ranch. The difference in appraisals was $5,500 per acre compared to the Jensen's $800 per acre.
Jensen noted that it makes a big difference in what you would be able to borrow against the value of the land.
Tucker Smith said, "It's the surface owner that pays the taxes on the property, but when it comes to the mineral rights, right now we have no say."
Smith added that as soon as there is mineral activity, the value of the surface is reduced.
Olsen said that the draft legislation calls for notification to the surface owner at least 30 days before commencement of activity on the surface.
Smith said that 30 days isn't enough notice for a land manager to be able to plan for a change in operations that can come with mineral development. He suggested that 90 days, a season, would be better for the landowner.
Peterson responded by suggesting that six months notice would be better, adding that 30 days "is way too short."
Cally McKee noted that in split estates involving federal mineral and private surface, the Bureau of Land Management now requires the mineral company to have a surface-use agreement in place before an application for permit to drill can be approved.
Chopper Grassell complained that a private landowner should be on the same footing as the federal government, but that is not the case currently.
Peterson said that historical policy is that the mineral estate is the dominant estate, while the surface estate is subservient.
"We're trying to reverse that policy a bit," Peterson said.
Peterson said he hopes the legislative outcome will put surface owner and mineral owner on equal footing.
Kenneth James advised that "when the land guy knocks on your door," let the biting dog out, then go back in and get your attorney. He also suggested that before allowing a company to drill, the landowner should make sure that the company actually holds the majority of the mineral rights, instead of being a minority right holder.
Tony Gosar suggested that since permit applications have to be filed with the Wyoming Oil and Gas Conservation Commission, WOGCC should be required to advise the surface owner when there is development proposed on their private surface.
Linda Baker suggested that the BLM should be required to notify surface owners when the mineral right to their land is going to be offered for lease, so the surface owner can be involved in the leasing process.
Grassell suggested the county cut $1 million of its $13 million jail construction project to hire experts "to best represent private landowners in Sublette County" so that each landowner doesn't have to fight these battles on their own.
"I think we need somebody in this county who represents the private landowners," Grassell said.
Barnes suggested a "fundamentally different approach" in which the mineral estate is taxed, and if the taxes are not paid, the mineral estate would revert to the surface owner.
Barnes also suggested, in split estate situations, involving private minerals and private surface, the mineral right owner "gets a free ride."
Barnes continued, "Yet those rights have value: They have market value, they should pay taxes on it."
McKee noted that the proposed legislation includes a provision that in the case of the rights holders being unable to reach a surface use agreement, the mineral owner can post $2,000 bond and enter the property.
When notified of the bond-on provision, Peterson said, "The bill is worthless if that stays in there."
McKee reminded the group that just as the surface owner has a right, the mineral estate has a right. McKee said if the inability to bond-on is removed, and no surface use agreement can be reached, "you've basically had a takings of the mineral estate. There has to be some kind of a balance."
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