Date: 03/13/2014

Final
BILL SUMMARY for SB14-093

HOUSE COMMITTEE ON JUDICIARY

Votes: View--> Action Taken:
Refer Senate Bill 14-093 to the Committee of the WPASS



04:34 PM

The committee recessed.


04:41 PM -- SB14-093

The committee returned to order. Representative May, prime sponsor, presented Senate Bill 14-093, concerning equivalent authority for pipeline companies to acquire right-of-way. Representative May discussed the need for the bill, and explained its effect. She addressed objections raised about the bill, and discussed the history of the use of eminent domain for pipelines in Colorado. Discussion ensued regarding the frequency with which pipelines have been laid in the past using eminent domain, and the use of eminent domain by public utilities. Representative May responded to questions regarding the ability of private companies to use eminent domain under the bill, and environmental protections in state law for oil and gas company activity if the companies were to be granted these powers under the bill. Discussion ensued on this point.


04:54 PM

Representative McLachlan discussed the process by which oil and gas pipelines are approved in his county, and the regulations that govern the process. Representative Salazar discussed state constitutional provisions pertaining to eminent domain.


04:59 PM

The following persons testified regarding Senate Bill 14-093:

04:59 PM -- Mr. Ben Cohen, representing himself, testified on the bill from a neutral position. As an attorney representing the plaintiffs in Larson v. Sinclair, Mr. Cohen provided input on the effect of the bill. He provided background on and discussed caselaw associated with the issue. Mr. Cohen responded to questions regarding the finding of the court in Larson v. Sinclair, and certain ambiguities in the controlling statute. Mr. Cohen responded to questions regarding the potential clarifying impact of Senate Bill 14-093. Discussion ensued regarding the legislative history surrounding condemnation powers associated with pipelines.


05:11 PM

Mr. Cohen responded to questions regarding the potential abridgement of the State Constitution by the bill. Mr. Cohen responded to further questions regarding whether Senate Bill 14-093 constitutes a "general pipeline" bill for the purposes of eminent domain, and the time period of the actions leading to Larson v. Sinclair. Discussion ensued regarding oversight of pipeline installation in Weld County.

05:16 PM -- Mr. Gene Kammerzell, representing himself, testified in opposition to the bill. Mr. Kammerzell discussed his family's farming operation in Weld County, and explained that the bill will allow companies to harm the farming industry for their own gain. He discussed the rights-of-way that are being sought in his area, and the damage caused by an oil and gas operation to his property. He explained that the bill will encourage more of this behavior. Mr. Kammerzell discussed the local land use procedure that governed the placement of pipelines on his property, and requirements that oil and gas companies remediate any damage caused by their operations. Mr. Kammerzell responded to questions regarding the owners of mineral rights on his property, and the authority under which the current oil and gas operation gained the rights-of-way on his property. Discussion ensued regarding the potential use of eminent domain by the company on his property.

05:28 PM -- Mr. John Jukkola, representing himself, testified in opposition to the bill. Mr. Jukkola cited the Fifth Amendment to the United States Constitution, and discussed the process by which some of his property was taken. He discussed a safety-related provision in the bill.

05:32 PM -- Mr. John Frasco, representing the Frasco Family Trust, testified in opposition to Senate Bill 14-093. Mr. Frasco discussed the process by which a pipeline right-of-way is being secured on his property and neighboring properties. He objected to private companies exploiting private lands that they do not own for profit. Mr. Frasco responded to questions regarding assistance provided to landowners by the county in navigating the rights-of-way issue. Discussion ensued regarding the benefit to the public of the oil and gas pipelines in Colorado. Discussion followed regarding regulations at the county level governing pipeline installation.

05:39 PM -- Ms. Barbara Kirkmeyer, representing the Weld County Board of County Commissioners and Colorado Counties, Inc., testified in opposition to the bill. Commissioner Kirkmeyer explained that the board does not feel the bill is a technical fix, and noted that the oil and gas industry has not worked with the board on the bill. Commissioner Kirkmeyer discussed the infringement of private property rights by the bill, and the potential unconstitutionality of the bill. She also questioned the public purpose of the pipelines that would be installed under the bill, and discussed the potential for the bill to subject oil and gas companies to public utilities regulations. Commissioner Kirkmeyer discussed the process by which pipeline sitings are approved, and the burdens faced by landowners in litigating pipeline rights-of-way. She discussed the entry onto her property by an oil and gas company, and the potential proliferation of eminent domain powers to other purposes if the bill were to pass. She spoke in favor of private negotiations between landowners and oil and gas companies rather than the granting of eminent domain powers to the companies. Commissioner Kirkmeyer responded to questions regarding Colorado Counties, Inc.'s position on the use of eminent domain by counties.


05:50 PM

Discussion ensued regarding the public benefit associated with oil and gas being extracted in Colorado. Commissioner Kirkmeyer responded to questions regarding county authority in the area of establishment of pipeline rights-of-way. Discussion ensued regarding the number of counties that have enacted land use regulations for the installation of pipelines, and the valid public purpose associated with oil and gas extraction. Discussion followed regarding the public purpose associated with eminent domain powers conferred to other entities such as transportation authorities and electric utilities. Commissioner Kirkmeyer responded to questions regarding the positions of individual counties on the bill.

05:57 PM -- Ms. Libby Comeaux, representing herself, testified in opposition to Senate Bill 14-093. She discussed the purpose of eminent domain, and spoke against the further integration of private industry and government power. Ms. Comeaux questioned the public purpose of the use of oil and gas, and discussed climate change. Ms. Comeaux responded to questions regarding her position on the use of oil and gas pipelines, and the use of pipelines for other purposes.

06:02 PM -- Mr. Delwyn Northup, representing himself, testified in opposition to the bill. Mr. Northup explained that he does not oppose oil and gas exploration, and discussed negotiations for placing pipelines on his property. He expressed concerns about the oil and gas industry being able to use the threat of eminent domain in pipeline negotiations. Mr. Northup discussed the potential impact of the bill's approval on pending pipeline negotiations concerning his property. Mr. Northup responded to questions regarding the arrangements for the exploitation of the mineral rights associated with his property.

06:08 PM -- Mr. Dave Donaldson, representing the Logan County Board of County Commissioners, testified in opposition to Senate Bill 14-093. Commissioner Donaldson explained that he feels granting eminent domain to private enterprise would be a violation of private property rights, and spoke in support of equity in negotiations between property owners and oil and gas companies. He discussed the intersection between eminent domain activities by oil and gas companies and trespass and criminal mischief laws. Commissioner Donaldson discussed the potential impact of the bill on pipeline rights-of-way negotiations. Commissioner Donaldson responded to questions regarding potential criminal trespass by oil and gas companies during their pipeline siting activities. Discussion ensued regarding contracts between landowners and oil and gas companies that obviate trespass charges.

06:16 PM -- Ms. Donna Larson, representing her family, testified in opposition to the bill. Ms. Larson discussed the Colorado Supreme Court rulings in the pipeline eminent domain case in which her family was the plaintiff, and cited pipeline safety regulations. Ms. Larson discussed the events that led to the lawsuit and the resulting Supreme Court decision, and the course of the pipelines that were the subject of the case. She discussed the subsequent impacts of the pipeline installation, and spoke about an amendment placed on the bill by the Senate. Ms. Larson discussed literature she received from the Sinclair Oil Company concerning pipeline safety. Discussion ensued regarding the potential impact of creating a permitting process at the local level for pipeline installation. Ms. Larson discussed her goals with respect to litigating the pipeline issue.

06:34 PM -- Mr. Bill Wycoff, representing himself, testified in opposition to the bill. Mr. Wycoff objected to the permanence of rights-of-way associated with pipelines, and the implications of this permanence. He also discussed potential safety issues associated with pipeline siting. Discussion ensued regarding the reasons for creating pipeline easements in perpetuity.

06:39 PM -- Mr. Dan Dean, representing himself, testified in opposition to the bill. Mr. Dean questioned the propriety of putting public safety issues before a jury, and cited laws in Minnesota pertaining to pipeline siting. Mr. Dean discussed the safety provisions in the bill. He discussed the eminent domain for pipeline authority and other legislation pending before the General Assembly. Mr. Dean stated that railroads should be subject to the same eminent domain rules as private landowners. Mr. Dean urged the committee to amend the bill to enhance its safety provisions. Mr. Dean responded to questions regarding the lack of authority of Weld County in the area of pipeline siting based on federal preemption.


06:49 PM

Mr. Dean responded to questions regarding the holdings of the trial court in the Larson case. Discussion ensued regarding the federal preemption issue.

06:51 PM -- Mr. Larry Frasco, representing himself, testified in opposition to the bill. Mr. Frasco discussed the siting of oil and gas pipelines on his property, and the associated negotiations. Mr. Frasco discussed safety issues associated with laying oil and gas pipelines across private property, and noted some asbestos issues he has experienced due to oil and gas pipelines. Mr. Frasco discussed the impacts of pipeline installation on farm land, and the potential for eminent domain powers being granted to oil and gas companies to impact pipeline siting negotiations. Mr. Frasco responded to questions regarding the potential impact of a pipeline being placed on his farm on its property value.

06:59 PM -- Mr. Mike Mais, representing himself, testified in opposition to the bill. Mr. Mais discussed negotiations he has engaged in with an oil and gas company to lay a pipeline across his property, and the assertion of condemnation authority by the company.

07:02 PM -- Mr. Chaz Tedesco, representing himself as an Adams County Commissioner, testified in opposition to Senate Bill 14-093. Commissioner Tedesco discussed the negotiations that oil and gas companies undertake with property owners to lay pipelines in his county, and the authority of the county to regulate this process. Mr. Tedesco identified problems with allowing oil and gas companies to condemn property for pipeline placement, and suggested some solutions for pipeline sitings and associated negotiations.

07:10 PM -- Mr. Nate Northup, representing himself, testified in opposition to the bill. Mr. Northup discussed negotiations his family has entered into with an oil and gas company to lay a pipeline, and the potential use of eminent domain by oil and gas companies as a bargaining tool. Mr. Northup responded to a question about the timing of the negotiations.


07:13 PM

Mr. John Frasco returned to discuss the financial arrangements involved in pipeline negotiations.


07:14 PM

The committee recessed.


07:34 PM

The committee returned to order.

07:34 PM -- Mr. Tom Dougherty, representing J. Seman, testified in support of the bill. Mr. Dougherty outlined the power to use eminent domain in Colorado, and explained that the bill is narrow in scope and does not confer any new authorities. He provided some history regarding the use of eminent domain in Colorado for pipelines, and discussed the ruling and dissenting opinions in the Larson case. Discussion ensued regarding the limits of Senate Bill 14-093 in terms of the substances that may be conveyed by pipeline. Mr. Dougherty addressed constitutional issues raised about the bill, and further discussed the historic use of eminent domain in Colorado.


07:49 PM

Mr. Dougherty continued to discuss state law, history, and jurisprudence in the area of the use of eminent domain. Discussion ensued regarding the public purpose requirement for eminent domain. Mr. Dougherty discussed the landowner protections built into the eminent domain process under existing law, and addressed the question of the scope of the use of eminent domain for laying pipelines. He discussed the reasons that companies avoid the use of eminent domain.


07:59 PM

Mr. Dougherty discussed the power of local governments to regulate the pipeline siting process, and addressed the federal preemption issue raised during earlier testimony. Mr. Dougherty discussed the emotional nature of pipeline siting negotiations. Mr. Dougherty responded to questions regarding the ability of oil and gas pipeline companies to use eminent domain under current law, and the potential use of eminent domain by these companies as a bargaining tool in pipeline siting negotiations.


08:10 PM

Discussion ensued regarding attorney fees associated with condemnation proceedings, and the potential for a pipeline path to be moved as a result of negotiations. Mr. Dougherty responded to questions regarding the potential creation of an inequity in the negotiation process by the conferral of eminent domain powers to pipeline companies, and landowner recourse in the face of the threat of eminent domain. Mr. Dougherty responded to questions regarding the use of the threat of eminent domain by pipeline companies under current law. Discussion returned to the negotiation process associated with pipeline siting, and the potential impact of placing a pipeline on a property on the property's value.


08:20 PM

Mr. Dougherty responded to questions regarding the ability of adjacent landowners to join together in negotiating a pipeline right-of-way, and the authority of counties in right-of-way proceedings. Discussion returned to equity in the negotiation process over pipeline siting. Mr. Dougherty responded to questions regarding requirements of pipeline companies using eminent domain to mitigate any damage caused by the pipeline installation, and landowner recourse for restoring property. Discussion again returned to equity in the negotiation process.


08:31 PM

Mr. Dougherty responded to questions regarding the options available to a landowner in determining property valuation in court proceedings, and his experiences with juries in such proceedings.

08:34 PM -- Mr. Andy White, representing the Department of Natural Resources and the Hickenlooper administration, testified in support of Senate Bill 14-093. Mr. White described the importance of infrastructure to the extraction of energy resources, which drives the economy, and discussed the growth in the energy industry in Colorado. He discussed the hampering of this industry without the passage of Senate Bill 14-093, and the impact of the Larson ruling on the use of eminent domain in Colorado. Mr. White responded to questions regarding the impact of regulations on pipeline siting, and the state governmental oversight responsibilities for pipeline siting. Discussion ensued regarding the federal preemption issue raised earlier.

08:42 PM -- Ms. Carly West, representing the Colorado Association of Commerce and Industry, testified in support of the bill. Ms. West discussed the importance of the energy industry to the economy, and the benefits of using pipelines to deliver these resources. She supported the narrow focus of the bill. Ms. West responded to questions regarding the public purpose of granting eminent domain to oil and gas companies. Discussion ensued regarding pipeline spills as compared to spills associated with other methods of oil and gas conveyance.

08:49 PM -- Mr. Patrick Pratt, representing the South Metro Denver Chamber of Commerce, testified in support of the bill. Mr. Pratt addressed concerns raised earlier about the pipeline right-of-way negotiation process, and discussed the importance of eminent domain to pipeline siting. Mr. Pratt discussed the importance of the oil and gas industry to Colorado's economy. Mr. Pratt responded to questions regarding the lack of land use regulations at the county level, which would provide oversight of pipeline siting.


08:53 PM

No amendments were offered to Senate Bill 14-093. Representative May provided closing remarks in support of the bill. Various committee members voiced their positions on the bill.
BILL:SB14-093
TIME: 08:55:26 PM
MOVED:Gardner
MOTION:Refer Senate Bill 14-093 to the Committee of the Whole. The motion passed on a vote of 6-5.
SECONDED:Lawrence
VOTE
Buckner
No
Court
Yes
Gardner
Yes
Lawrence
Yes
McLachlan
Yes
Murray
Yes
Pettersen
Yes
Salazar
No
Waller
No
Lee
No
Kagan
No
Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS



09:10 PM

The committee adjourned.