Landowners to claim mineral rightsSince 2003, landowners who own the surface rights to their property, but not the mineral rights, have had the right to claim any minerals rights deemed abandoned if nothing has been done with them for 20 years.
By: John Odermann, The Dickinson Press
Since 2003, landowners who own the surface rights to their property, but not the mineral rights, have had the right to claim any minerals rights deemed abandoned if nothing has been done with them for 20 years.
Since 2003, long lost mineral rights holders have appeared out of the ether and claimed those rights without proof they held the rights in the first place.
A loophole in the law allowed individuals to claim they had rights to the minerals, but they weren’t required to provide any proof. Representatives in the North Dakota state legislature hopes to change that with the help of House Bill 1370.
“It’s a big glaring loophole,” said Rep. Shirley Meyer, D-Dickinson. “It’s fraud. As far as I’m concerned, it’s absolutely fraud.”
Meyer said those committing the fraud can make a nice profit by doing so.
“You get a 3,000 to 4,000 barrel-a-day well and with just this little fraudulent transaction they can make a fortune on it,” Meyer said.
The original bill, which was heralded by Meyer’s father, Jack Murphy, when he was in the legislature, passed in 1983 and was intended to clear up all of the abandoned mineral rights with no clear owner.
The abandoned rights would revert back to the owner of the surface owner, but before the rights would go to the surface owner they were required to publish a statement claiming the rights three times.
What started happening in 2003, the first year a surface owner could claim abandoned mineral rights was the absentee mineral rights owners began to appear out of nowhere, said Rep. David Drovdal, R-Watford City.
They would say, “We’re the fifth cousin on the seventh side and therefore we’re entitled to those minerals and all they have to do is sign the claim form and put it in and all of a sudden those minerals are theirs,” Drovdal said. “We wanted to clarify that to make sure that doesn’t happen.”
The new law, which Drovdal will carry on the floor of the house, will place the burden of proof on the outside party attempting to claim the mineral rights, not the surface owner, Meyer said. It will also levy a Class B misdemeanor against any party which attempts to file a false claim for mineral rights.
Drovdal said the problem isn’t that widespread yet, but it was important to clarify the wording of the bill before the problem grew.
Meyer said the bill has garnered support from both sides of the aisle and she thinks it will pass.
“It’s totally bipartisan,” Meyer said. “Republicans and Democrats alike are having this problem.”