DENVER – Two measures introduced by Colorado Republicans aim to compensate mineral-rights owners in the event of a ban on drilling.
But Democrats in the Colorado Legislature already are pushing back, suggesting the bills are premature given the ongoing work of a natural-gas and oil task force meeting to make legislative recommendations.
One measure, Senate Bill 93, would offer a means for mineral-rights owners to claim compensation from a local government if that government reduces the value of the owner’s royalties by at least 60 percent through laws that limit natural-gas and oil extraction, including hydraulic fracturing.
The legislation also would require county commissioners to hold a valuation hearing. Owners could elect to take the matter to court.
A second measure, House Bill 1119, much more simply would hold a local government liable for the value of lost royalties if that government bans fracking. It is not as prescriptive as the Senate bill.
House Speaker Dickey Lee Hullinghorst, D-Boulder, said neither proposal does anything to address the larger issue. One issue being discussed by the task force is how to balance local regulation with the state’s oversight of the natural-gas and oil industry.
Concerns around health, safety and nuisance have grown louder as fracking has made its way to more populated areas of the state. Several local governments along the Front Range enacted bans or moratoriums on fracking, either by a vote of the people or through actions by government. Many of those cases are tied up in legal proceedings.
The issue hit a tipping point last year when proponents pushed two statewide ballot measures that would have increased setbacks of wells and offered greater local control. But the effort was suspended as part of a compromise that created the task force.
“That’s the wrong approach to solving this problem,” Hullinghorst said Monday of the Republican measures. “We have an issue here of an interface between major residential areas and heavy industrial activity – a very important industrial activity – but the people that own homes are also very important in that scenario. The task force is working, and we’re looking forward to the recommendations.”
Critics of the mineral-rights bills also wonder whether the measures would pass constitutional tests in court, specifically pointing to municipal home rule.
“It’s a way of punishing communities for having a constitutional voice,” Hullinghorst said. “Local governments – municipalities and counties – are very familiar with balancing property rights across the board.”
But Sen. Jerry Sonnenberg, R-Sterling, who is sponsoring SB 93, said his measure has been well-vetted by legal counsel.
“All my bill does is clarify the constitution and our takings law, and the ability to compensate people that own property when government takes property,” Sonnenberg told The Durango Herald. “I don’t think there’s any question whether it’s constitutional.”
He believes the work of the task force is a separate issue from the mineral-rights conundrum.
“The task force is trying to see if there is a problem,” Sonnenberg said. “I don’t want them to bring me a solution if there’s no problem.”
Newly elected La Plata County Commissioner Brad Blake, a Republican, said he does not view the measures as seeking to punish local governments, pointing out that he supports gas development in La Plata. But he acknowledged it would be extremely difficult for the county to offer compensation.
“There are still a lot of questions that need to be asked and answered, and I don’t know, given the amount of revenue involved here in La Plata County, how we could pay for it,” Blake said.
He was careful to point out that the industry has been a boon to La Plata County, especially in terms of county budgeting.
“That whole industry has been very good to our county and has done a lot for our county,” Blake said. “When you look at the improvements that are made, and a lot of the surpluses that are in our county coffers now, it comes from that industry, and the taxes and fees collected.”
