The Erie board of trustees’ 4-3 decision last week to not put a one-year hold on any new oil and gas drilling permits may very well have saved the city from some looming financial backlash.

Two bills currently floating through the ranks of the Colorado legislature propose that if a local community wants to put in place a ban or moratorium on energy development, in return it has to compensate mineral owners who would stand to lose money from that decision.

Rep. Perry Buck, R-Windsor, introduced House Bill 1119 together with 17 Republican co-sponsors. The bill simply states that a community that passes a fracking ban or moratorium must reimburse royalty owners for their financial losses when they cannot extract or sell the minerals on their property.

The bill faces some substantial resistance from the Democratic caucus, which controls the House chamber.

House Speaker Dickey Lee Hullinghorst, D-Boulder, sent the legislation to the State Affairs and Appropriations Committees. But in a meeting with reporters on Jan. 20, she said she suspected that the bill is “a way of punishing communities for having a constitutional voice.” She said local governments were very familiar with balancing property rights across the board. “They balance the property rights of the surface owners to the rights of the developing businesses and the residents’,” Hullinghorst said. “All of those people have property rights that have to be accounted for.”

Looming over the emerging legislative squabble is the fracking debate and the ongoing controversy over whether local communities have a right to ban energy development within their boundaries if those techniques pose a potential threat to the environment and their residents.

Gov. John Hickenlooper avoided having a string of anti-fracking measures on last year’s general election ballot and instead created a task force, which is due to come up with recommendations on how to solve the issue by the end of February.

Buck’s legislative foray didn’t resonate too well with Hullinghorst, who prefers to stall a legislative approach to fracking and wait to see what ideas the task force pulls out of the hat.

But Buck, who is married to U.S. Rep. Ken Buck and lives in Weld County, Colorado’s fracking epicenter, disagrees. “There is no good or bad time,” the lawmaker said. “Everyone has to have their private property protected.” During her re-election campaign last year, Buck raked in more than $2,100 in campaign contributions from oil and gas companies and lobbyists, according to filings with the Federal Elections Commission.

Sen. Jerry Sonnenberg, R-Sterling, Agriculture, Natural Resources and Energy Committee, sides Buck’s bill with his own piece of legislation that he introduced in the Republican-controlled upper chamber, where it is much more likely to pass.

SB 93 goes into substantially more detail. The bill would require communities to not only reimburse mineral rights owners in case they pass a ban but for any kind of regulation that has at least a 60 percent impact on what Sonnenberg defines as “the fair market value of the owner’s mineral interest.”

But who determines that value? The bill proposes a two-month process during which a commission or a jury comes up with a figure that can then be challenged by either the owner or the local government. Once the community has paid off the owner, it can put in place whatever regulation has been approved by voters or a city board.

“If you invested money and bought a car, and the government said you could no longer drive the car because it uses gas or for whatever reason, shouldn’t they have to pay for the car since it’s rendered useless for you?” Sonnenberg asked. “It’s the same point here: If government takes your property, they have to compensate you.”

He added that the timing of the bill shouldn’t be questioned. “This should have been done 20 years ago,” he said, arguing that the Colorado Constitution protects the possession of minerals as a property right.

But Bradley Beck, who spoke in front of the Erie board of trustees last week on behalf of mineral owners, said the devil was in the details.

“In theory I would be in favor of some sort of compensation. My concern is I don’t want it from the pockets of the taxpayers. That’s rent-seeking.”

Beck instead proposed that a private entity or consortium should step in. He said he owns only a minimal amount of oil and gas resources. But many of his fellow Erie and Boulder County citizens bring much more substantial claims to the table, with many of them planning to use the royalties to prep up their retirement or their kids’ college funds.

Spokespeople for the cities of Lafayette and Longmont were not aware of the introduced bills. Both cities had their respective fracking bans overturned following lawsuits from the Colorado Oil & Gas Association. Longmont spokesman Rigo Leal later said the city employs a lobbyist who may soon brief city council members on the proposals.

Neil Ray, a board member of the Colorado chapter of the National Association of Royalty Owners, said Sonnenberg’s bill was particularly interesting because “it uses a shotgun approach to say that all minerals are protected and that the mineral owner deserves just compensation.” He said the governor’s task force can make many recommendations but needed to realize that “what they come up with will not be able to override the 5th Amendment of the United States Constitution.”

Sonnenberg represents a large stretch of northeastern Colorado and was also a hot ticket for campaign contributions from oil and gas companies during his Senate bid last year. But the Sterling Republican said the dispute over mineral rights is not primarily an oil and gas company concern, although he acknowledged that they have an interest in those mineral rights.

“They are going to profit from those,” Sonnenberg said. “There is nothing wrong with the profit — no more than Chevrolet is going to profit from selling you a car. If you are forbidden to use that car, Chevrolet is going to get hurt by not being able to sell cars.”

— Lars@coloradostatesman.com