House bill aims for cities with fracking bans to compensate mineral owners

A bill in the state Legislature would require cities and counties that impose bans on hydraulic fracturing to compensate mineral owners for the lost value of their property.

Rep. Perry Buck, D-Windsor, introduced House Bill 1119 this week. The measure states that any government that passes a ban on hydraulic fracturing, or fracking, must pay a mineral owner for the value of royalties not received due to the prohibition.

“A government should not be able to take a person’s property without just compensation,” Buck said. “I’m hopeful this bill will be passed to give Colorado property owners adequate protections or fair compensation for their property.”

Rep. Brian DelGrosso, R-Loveland, is a co-sponsor, along with several other lawmakers. It heads to the House State, Veterans and Military Affairs Committee, though no date has been set, Buck said.

Colorado property is divided into surface rights and mineral rights, both of which are often owned by different people. In this split-estate arrangement, oil and gas companies are entitled to developing their mineral rights even though the minerals may not lie under land they own.

About 600,000 people are estimated to own mineral rights in Colorado, according to the Rockies Chapter of the National Association of Mineral Owners. In 2012, Colorado mineral owners received $87.9 million in bonuses paid after signing lease agreements and another $159.9 million in royalty payments.

Fracking bans might constitute takings of property by the government, which in turn must pay fair market value to compensate mineral owners. In that case, a court could require local governments that have banned fracking to pay mineral owners if they cannot develop their property.

Fracking bans and moratoriums have been enacted in cities such as Fort Collins, Lafayette and Longmont, only to be struck down by district court judges. Fracking moratoriums remain in effect in Broomfield, which is being sued by the Colorado Oil & Gas Association, and Boulder County.

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