---

Session of 2000
          SENATE BILL No. 610           By Senator Huelskamp           2-9          

---

  9             AN  ACT concerning oil and gas; relating to determination and payment
10             of certain damages from drilling of wells; providing remedies for
11             violations.
12      
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. (a) As used in this act, terms have the meanings provided
15       in K.S.A. 55-150, and amendments thereto.
16             (b) Prior to entering a well site with heavy equipment, the operator
17       shall negotiate with the surface owner for the payment of any damages
18       which may be caused by the drilling operation. If the parties agree, and
19       a written contract is signed, the operator may enter the site to drill. If
20       agreement is not reached, or if the operator is not able to contact all
21       parties, the operator shall petition the district court of the county where
22       the drilling site is located for appointment of appraisers to make recom-
23       mendations to the parties and to the court concerning the amount of
24       damages, if any. Once the operator has petitioned for appointment of
25       appraisers, the operator may enter the site to drill.
26             (c) Ten-days' notice of the petition to appoint appraisers shall be
27       given to the opposite party, either by personal or residence service or, in
28       the case of nonresidents, unknown heirs or other persons whose where-
29       abouts cannot be ascertained, by publication once in a newspaper that
30       meets the requirements for service by publication pursuant to K.S.A. 60-
31       307, and amendments thereto.
32             (d) The operator shall select one appraiser, the surface owner shall
33       select one appraiser and the two selected appraisers shall select a third
34       appraiser for appointment by the court. Unless, for good cause shown,
35       additional time is allowed by the district court, the three appraisers shall
36       be selected within 20 days after service of the notice of the petition or
37       within 20 days after the date of publication of the notice. If either party
38       fails to appoint an appraiser or if the two appraisers cannot agree on the
39       selection of the third appraiser within the required time period, the re-
40       maining required appraisers shall be selected by the district court upon
41       application of either party. Before entering upon their duties, the ap-
42       praisers shall take an oath to faithfully discharge their duties. The ap-
43       praisers shall inspect the real property and consider the surface damages

2
  1       which the surface owner has sustained or will sustain by reason of entry
  2       upon the land and by reason of drilling or maintenance of brine produc-
  3       tion on the land. The appraisers shall then file a written report with the
  4       clerk of the court within 30 days after the date of their appointment. The
  5       report shall set forth the quantity, boundaries and value of the property
  6       entered on or to be utilized in drilling and the amount of surface damages
  7       done or to be done to the property. The appraisers shall make a valuation
  8       and determine the amount of compensation to be paid by the operator
  9       to the surface owner and the manner in which the amount shall be paid.
10       The appraisers shall then make a report of their proceedings to the court.
11       The compensation of the appraisers shall be fixed and determined by the
12       court. The operator and the surface owner shall share equally in the pay-
13       ment of the appraisers' fees and court costs.
14             (e) Within 10 days after the report of the appraisers is filed, the clerk
15       of the court shall forward to each attorney of record, each party and each
16       interested party of record a copy of the report of the appraisers and a
17       notice stating the time limits for filing an exception to the report or a
18       demand for jury trial as provided for in this section. If a party has been
19       served by publication, the clerk shall forward a copy of the report of the
20       appraisers and the notice of time limits for filing either an exception or
21       a demand for jury trial to the last-known mailing address of each party,
22       if any, and shall cause a copy of the notice of time limits to be published
23       once in a newspaper that meets the requirements for service by publi-
24       cation pursuant to K.S.A. 60-307, and amendments thereto. After issuing
25       the notice provided by this subsection, the clerk shall endorse on the
26       notice form filed in the case the date that a copy of the report and the
27       notice form was forwarded to each attorney of record, each party and
28       each interested party of record or the date the notice was published.
29             (f) The time for filing an exception to the report of the appraisers or
30       a demand for jury trial shall be calculated as commencing from the date
31       the report of the appraisers is filed with the court. Upon failure of the
32       clerk to give notice within the time prescribed, the court, upon application
33       by any interested party, may extend the time for filing an exception to
34       the report or filing a demand for trial by jury for a reasonable period of
35       time not less than 20 days from the date the application is heard by the
36       court. Appraisers' fees and court costs may be the subject of an exception,
37       may be included in an action by the petitioner and may be set and allowed
38       by the court.
39             (g) The report of the appraisers may be reviewed by the court, upon
40       written exceptions filed with the court by either party within 30 days after
41       the filing of the report. After the hearing, the court shall enter the ap-
42       propriate order by confirmation, rejection, modification or order of a new
43       appraisal for good cause shown. If a new appraisal is ordered, the operator

3
  1       shall have continuing right of entry subject to the continuance of evidence
  2       of the operator's financial responsibility required by K.S.A. 55-155, and
  3       amendments thereto. Either party, within 60 days after the filing of such
  4       report, may file with the clerk of the court a written demand for a trial
  5       by jury, in which case the amount of damages shall be assessed by a jury.
  6       The trial shall be conducted and judgment entered in the same manner
  7       as eminent domain proceedings. If the party demanding the jury trial
  8       does not recover a verdict more favorable than the assessment award of
  9       the appraisers, all court costs including reasonable attorney fees shall be
10       assessed against such party.
11             (h) Any aggrieved party may appeal from the decision of the court
12       on exceptions to the report of the appraisers or the verdict rendered upon
13       jury trial. Such appeal shall not serve to delay the prosecution of the work
14       on the premises in question if an amount equal to the award of the ap-
15       praisers or jury has been deposited with the clerk for the use and benefit
16       of the surface owner. In case of review or appeal, a certified copy of the
17       final order or judgment shall be transmitted by the clerk to the appro-
18       priate county clerk to be filed and recorded.
19             (i) When an estate is being probated, or when a minor or disabled
20       person has a legal guardian or conservator, the administrator or executor
21       of the estate, or the guardian or conservator of the minor or disabled
22       person, shall have the authority to execute all instruments provided for
23       in this act on behalf of the estate or minor or incompetent person with
24       no other proceedings other than approval by the judge of the district court
25       being endorsed on the instrument.
26             (j) Nothing in this section shall be construed to impair existing con-
27       tractual rights nor shall it prohibit parties from contracting to establish
28       correlative rights on the subject matter contained in this section.
29             Sec.  2. (a) Upon presentation of clear and convincing evidence that
30       an operator willfully and knowingly entered upon land for the purpose of
31       commencing the drilling of a well before giving notice of such entry or
32       without the agreement of the surface owner, the court, in a separate
33       action, may award treble damages to the surface owner. The issue of
34       noncompliance shall be a fact question, determinable without jury, and a
35       de novo issue in the event of appeal.
36             (b) Any operator who willfully and knowingly fails to maintain evi-
37       dence of the operator's financial responsibility as required by K.S.A. 55-
38       155, and amendments thereto, or who fails to notify the surface owner,
39       prior to entering, or fails to come to an agreement and does not petition
40       the court for appraisers, shall pay, at the direction of the court, treble
41       damages to the surface owner.
42             (c) Damages collected pursuant to this act shall not preclude the sur-
43       face owner from collecting any additional damages caused by the operator

4
  1       at a subsequent date. 
  2        Sec.  3. This act shall take effect and be in force from and after its
  3       publication in the statute book.