CHAPTER 38-11.2
SUBSURFACE EXPLORATION DAMAGES
38-11.2-01. Definitions. In this chapter, unless the context or subject matter otherwise
requires:
1.
"Agricultural production" means the production of any grass or crop attached to the<br>surface of the land, whether or not the grass or crop is to be sold commercially, and<br>the production of any farm animals, whether or not the animals are to be sold<br>commercially.
2.
"Drilling operations" means the drilling of a subsurface mineral extraction well and<br>the injection, production, and completion operations ensuing from the drilling which<br>require entry upon the surface estate, and includes subsurface mineral exploration<br>activities.
3.
"Mineral developer" means the person who acquires the mineral estate or lease for<br>the purpose of extracting or using the subsurface minerals for nonagricultural<br>purposes.
4.
"Mineral estate" means an estate in or ownership of all or part of the subsurface<br>minerals underlying a specified tract of land.
5.
"Subsurface mineral" means any naturally occurring element or compound<br>recovered under the provisions of chapter 38-12, but for the purpose of this chapter<br>excludes coal, oil and gas, sand and gravel, and rocks crushed for sand and gravel.
6.
"Subsurface mineral exploration activities" means any method of obtaining<br>information relative to locating and defining subsurface minerals that results in<br>surface disturbance.
7.
"Surface estate" means an estate in or ownership of the surface of a particular tract<br>of land.
8.
"Surface owner" means any person who holds record title to the surface of the land<br>as an owner.
38-11.2-02. Inspection of well site. Upon request of another state agency, the surface
owner, or an adjacent landowner, the state department of health shall conduct a site visit and<br>evaluate site-specific environmental data as necessary to ensure compliance with applicable<br>environmental protection laws and regulations relating to air, water, and land management under<br>the jurisdiction of the department.
38-11.2-03. Notice of drilling operations.
1.
The mineral developer shall give the surface owner written notice of the drilling<br>operations contemplated at least twenty days prior to the commencement of the<br>operations, unless waived by agreement of both parties.
2.
This notice must be given to the record surface owner at that person's address as<br>shown by the records of the county recorder at the time the notice is given.
3.
This notice must sufficiently disclose the plan of work and operations to enable the<br>surface owner to evaluate the effect of drilling operations on the surface owner's use<br>of the property. Included with this notice must be a copy of this chapter.
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4.
If a mineral developer fails to give notice as provided under this section, the surface<br>owner may seek any appropriate relief in the court of proper jurisdiction and may<br>receive punitive as well as actual damages.
38-11.2-04. Damage and disruption payments - Statute of limitations.
1.
The mineral developer shall pay the surface owner a sum of money equal to the<br>amount of damages sustained by the surface owner and the surface owner's tenant,<br>if any, for loss of agricultural production and income, lost land value, lost use of and<br>access to the surface owner's land, and lost value of improvements caused by<br>drilling operations. The amount of damages may be determined by any formula<br>agreeable between the surface owner and the mineral developer.
When
determining damages, consideration must be given to the period of time during<br>which the loss occurs.
2.
The surface owner may elect to be paid damages in annual installments over a<br>period of time.
3.
The surface owner must be compensated for harm caused by subsurface mineral<br>exploration only by a single sum payment.
4.
The payments contemplated by this section only cover land directly affected by<br>drilling operations.
5.
Payments under this section are intended to compensate the surface owner for<br>damage and disruption. Any reservation or assignment of such compensation apart<br>from the surface estate except to a tenant of the surface estate is prohibited. In the<br>absence of an agreement between the surface owner and a tenant as to the division<br>of compensation payable under this section, the tenant is entitled to recover from the<br>surface owner that portion of the compensation attributable to the tenant's share of<br>the damages sustained.
6.
To receive compensation under this section, any person shall notify the mineral<br>developer of the damages sustained by the person within two years after the injury<br>occurs or would become apparent to a reasonable person.
38-11.2-05. Agreement - Offer of settlement. Unless both parties provide otherwise by
written agreement, the mineral developer shall make a written offer of settlement to the person<br>seeking compensation for damages when the notice required by section 38-11.2-03 is presented.<br>The person seeking compensation may accept or reject any offer so made.
38-11.2-06.
Rejection - Legal action - Fees and costs.
If the person seeking
compensation rejects the offer of the mineral developer, that person may bring an action for<br>compensation in the court of proper jurisdiction. The court, in its discretion, may award the<br>person seeking compensation reasonable attorney's fees, any costs assessed by the court, and<br>interest on the amount of the final compensation awarded by the court from the day drilling<br>operations are commenced. The rate of interest awarded must be the prime rate charged by the<br>Bank of North Dakota on the date of the judgment.
38-11.2-07.
Protection of surface and ground water - Other responsibilities of
mineral developer.
1.
The mineral developer shall conduct or have conducted an inventory of water wells<br>located within one-half mile [804.67 meters] of where subsurface mineral exploration<br>activities are conducted, if such exploration activities appear reasonably likely to<br>encounter ground water, or within one mile [1.61 kilometers] of a subsurface mineral<br>production site.
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2.
The mineral developer shall conduct or have conducted a certified water quality and<br>quantity test within one year preceding the commencement of subsurface mineral<br>production operations on each water well or water supply located on the involved<br>real property and as identified by the surface owner of that real property.
3.
If the domestic, livestock, or irrigation water supply of any person who owns an<br>interest in real property within one-half mile [804.67 meters] of where subsurface<br>mineral exploration activities are or have been conducted or within one mile [1.61<br>kilometers] of a subsurface mineral production site has been disrupted, or<br>diminished in quality or quantity by the drilling operations, the person who owns an<br>interest in real property is entitled to recover the cost of making such repairs,<br>alterations, or construction that will ensure the delivery to the surface owner of that<br>quality and quantity of water available to the surface owner prior to the<br>commencement of drilling operations.
4.
Any person who owns an interest in real property who obtains all or a part of that<br>person's water supply for domestic, agricultural, industrial, or other beneficial use<br>has a claim for relief against a mineral developer to recover damages for disruption<br>or diminution in quality or quantity of that person's water supply proximately caused<br>from drilling operations conducted by the mineral developer.
5.
Prima facie evidence of injury under this section may be established by a showing<br>that the mineral developer's drilling operations penetrated or disrupted an aquifer in<br>such a manner as to cause a diminution in water quality or quantity within the<br>distance limits imposed by this section.
6.
An action brought under this section when not otherwise specifically provided by law<br>must be brought within six years of the time the action has accrued. For purposes of<br>this section, the claim for relief is deemed to have accrued at the time it is<br>discovered or might have been discovered in the exercise of reasonable diligence.
7.
A tract of land is not bound to receive water contaminated by drilling operations on<br>another tract of land and the owner of a tract has a claim for relief against a mineral<br>developer to recover the damages proximately resulting from natural drainage of<br>waters contaminated by drilling operations.
8.
The mineral developer is also responsible for all damages to person or property<br>resulting from the lack of ordinary care by the mineral developer or resulting from a<br>nuisance caused by drilling operations.
9.
This section does not create a cause of action if an appropriator of water can<br>reasonably acquire the water under the changed conditions and if the changed<br>conditions are a result of the legal appropriation of water by the mineral developer.
38-11.2-08. Application of chapter. The remedies provided by this chapter do not
preclude any person from seeking other remedies allowed by law. This chapter does not apply to<br>the operation, maintenance, or use of a motor vehicle upon the highways of this state as these<br>terms are defined in section 39-01-01.
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Document Outline
chapter 38-11.2 subsurface exploration damages
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