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Proposed N.D. Land Board rules could cause delays for energy, agriculture sectors

BISMARCK—North Dakota's land commissioner cautioned Thursday, Aug. 30, that the energy and agriculture industries could see significant delays to obtain easements for state-owned lands under a change in administrative process directed by the Legislature.

Commissioner Jodi Smith said the state Department of Trust Lands is working on new administrative rules as directed by lawmakers last session, but finding some unintended consequences.

Smith told members of the Board of University and School Lands that a typically two-week process to approve an easement could instead take several months under a new set of procedures.

A lease for an oil and gas well could take 12 to 18 months instead of about two months, Smith said.

The new rules being developed are the result of legislation that removes an exemption for the Land Board from the Administrative Agencies Practice Act. The North Dakota Petroleum Council and the Lignite Energy Council supported the bill last session.

The Administrative Rules process adds a layer of public input and legislative oversight that was not previously required for the Land Board.

As the rules are currently drafted, they are expected to add significant expense to the Department of Trust Lands and have a direct economic impact to energy and agriculture sectors, Smith said.

The Department of Trust Lands grants about 500 easements every two-year budget cycle, Smith said. The department's assets include 706,500 surface acres and 2.6 million mineral acres.

"It has a very significant impact for the state," she said.

Gov. Doug Burgum, chairman of the Land Board, said he supports putting a pause on developing the new rules until the board can get clarification from legislators about their intent.

"We would start looking like the federal government where things take 12 to 15 months instead of three months," he said. "There could be some serious unintended consequences."

Smith said she is seeking to be added to the Sept. 12 agenda of the Legislature's Administrative Rules Committee to seek guidance from lawmakers and request a delay.

Rep. Kim Koppelman, R-West Fargo, who was one of the bill's sponsors and is a longtime member of the Administrative Rules Committee, said in an interview that the administrative rules process should not have an impact on easements or leases.

"I think those fears are unfounded," he said.

Koppelman said adopting administrative rules provides a check and balance on state government but is not intended to interfere with day-to-day operations of state agencies.

Sen. Jessica Unruh, R-Beulah, also a sponsor of the bill, said the goal of the legislation was to provide more transparency and efficiency and to ensure that all companies were playing by the same set of rules.

Ron Ness, president of the North Dakota Petroleum Council, said the industry group supported the legislation to ensure that companies had timely notice and opportunity to comment on major policy decisions considered by the Land Board.