DENVER — — The 2014 version of granting eminent domain authority to oil pipeline companies went through a strange couple of days this week, and by week’s end had lost its chief Senate and House sponsors.
Senate Bill 14-093 is an attempt to overturn a 2012 Colorado Supreme Court decision that told oil pipeline companies they did not have eminent domain authority. The companies have used their perceived authority for decades to obtain easem*nts where they can place oil pipelines.
In 2003, they got pushback from several Weld County residents, Ivar and Donna Larson and some of their neighbors. Sinclair Transportation wanted to obtain another easem*nt, and a 10-inch pipeline, to an existing easem*nt that had been in place since 1963.
The Larsons bought the property near Johnston years after the first easem*nt, and a six-inch pipeline, was installed. But they refused the second easem*nt request, because a subdivision had been built in the ensuing years, with one home just 25 feet from the pipeline. They asked for a greater distance, or setback, of about 1,500 feet, which Sinclair refused.
Sinclair sued under their alleged eminent domain authority. The Larsons borrowed $2 million to cover the legal bills for the fight, which went all the way to the Colorado Supreme Court. The Court ruled that oil pipeline companies did not have eminent domain authority; the statute that they relied upon for close to 100 years pertained only to natural gas pipelines and other public utilities.
Proponents of SB 93, including its-then sponsor, Sen. Cheri Jahn (D-Wheat Ridge), have maintained that the General Assembly always intended to grant that authority to the oil pipeline companies. The bill would not establish any new condemnation authority, Jahn said during the bill’s first hearing on Feb. 13. This week, Jahn told the Senate Agriculture, Natural Resources and Energy Committee that the bill would not create new law. “It’s a simple fix to align Colorado law with 100 years of practice,” she said.
Testifying in favor of SB 93, attorney Thomas Dougherty of Lewis Roca Rothgerber has practiced eminent domain law for 15 years, obtaining “hundreds, if not thousands of miles” of right of ways for pipelines and transmission lines.
Doughtery said SB 93 confirms in statute the understanding of the law, that pipeline companies had the authority to condemn when necessary to obtain rights of way. That issue was not questioned for 100 years. But the 2012 Supreme Court ruling “changed 100 years of history. “And with all due respect to the justices, they simply got that one wrong,” Dougherty told the committee.
Condemnation is an important tool for pipeline companies to obtain rights of way, and without this power, infrastructure will be much more difficult, if not impossible, to build, Dougherty claimed. “Our quality of life depends on the movement of oil, gas and refined products. The purpose of SB 93 is to correct the error” of the majority of the Supreme Court, and restore the practical understanding that pipeline companies have had for 100 years. Only a minority of cases ever go to condemnation, he explained; the condemning authority risks its reputation when it does that. In addition, passing SB 93 will not mean that condemning authorities will run “roughshod” over the rights of landowners.
The bill also got support from the South Metro Chamber of Commerce, the Colorado Association of Commerce and Industry, and the Colorado Department of Natural Resources.
Those who fought against the bill in 2013 were back for another round on Feb. 13. Weld County Commissioner Barbara Kirkmeyer testified against SB 93 on behalf of Colorado Counties Inc. and several other elected officials in Weld County.
“We have grave concerns over this bill and what we consider the expansion of eminent domain powers to private companies,” Kirkmeyer said. As to the Supreme Court ruling, the companies “have had it wrong for 100 years… It’s an infringement of private property rights; misuse of public right of way for a private, for-profit company [that is not a utility].” Kirkmeyer noted that the county commissioners in Weld and Boulder counties are in rare agreement in their opposition to the bill.
Kirkmeyer has her own “horror story” to tell about working with an oil company. Suncor had asked for permission to survey her property for a right of way after the 2012 Supreme Court ruling. She told them no, and they did it anyway. “These companies are like the playground bully. They know they have the right of eminent domain and they use that. It’s not a level playing field.” In response to a question from Sen. Lois Tochtrop (D-Adams County), Kirkmeyer said Weld County does like the revenue from the oil industry, but “we also work closely with the oil and gas industry,” and if the oil company needs a right of way, they should work with the local government rather than taking it through eminent domain. In the last year, Weld County has granted access to 18 miles of rights of way to oil companies, she explained.
The committee heard from other landowners who have had to fight with the oil pipeline companies over rights of way. Gene Kammerzell of Arborland Nursery of Milliken told the committee he also had to fight Suncor over a right of way that required him to cut down trees and cut off access to the road to his property.
The Larsons also testified, noting the U.S. Department of Transportation has issued guidelines for the placement of pipelines, but they are only guidelines, not law.
Due to the absence of a committee member, the bill was put on hold at the end of the Feb 13 hearing. The Ag committee met again this past Wednesday to look at amendments and vote.
According to committee Chair Sen. Gail Schwartz (D-Snowmass Village), the Minnesota legislature passed a law requiring that local governments be involved in the “siting” process for the pipeline. Schwartz’s amendment, modeled on the Minnesota law, would recognize that siting falls under the jurisdiction of a local government. The local government could then expect assistance from the Colorado Department of Local Affairs in determining whether the siting was appropriate. That suggested to several committee members that local governments could block the placement of a pipeline if they did not approve of where it was going. However, Jahn said she had spoken to stakeholders who had worked on the bill and there was no objection.
The strange goings-on with SB 93 began when Sen. Greg Brophy (R-Wray) offered an amendment that applies to condemnation proceedings where the court award to the landowner is $10,000 or more.
Under the amendment, if the award is 30 percent more than last written offer made prior to the condemnation, the condemning authority must pay the landowners’ legal fees and pay triple the award. The court can also determine that the condemnation was unnecessary because the condemning authority could have acquired the right of way under public property without “additional hardship” or extra expense.
The amendment is punitive, Jahn said, and it will stop all condemnation proceedings in Colorado since it also applies to utilities lines, such as electric and natural gas. She also expressed concerns that pipelines could end up under public buildings, such as schools.
Brophy referred to his amendment as “level playing field” language, and said that all the oil companies had to do was bring a fair offer to the table. It’s David (landowners) versus Goliath (condemning authorities), according to Brophy.
The committee adopted Brophy’s amendment on a 4-3 vote, with Sen. Matt Jones (D-Boulder) voting with the three Republicans. SB 93 passed the committee 6 to 1, with Jones casting the lone “no” vote. He explained that 80 percent of his county is being sued by the oil and gas companies (over fracing bans), and his constituents would not support a bill granting those companies more authority.
Jahn immediately left the hearing after the vote, and did not respond to requests for comment. Jep Seman of the Colorado Petroleum Association, which also supports the bill, also declined comment.
Thursday morning, Senate President Morgan Carroll (D-Aurora), announced that Jahn and the bill’s House sponsors, Rep. Jenise May (D-Aurora) and Rep. Jerry Sonnenberg (R-Sterling) were removed as SB 93 sponsors. That afternoon, the Senate Ag committee took another look at the Brophy amendment and stripped it out of the bill on a 5-2 vote. However, the addition of SB 93 to the afternoon calendar was never announced on the Senate floor, nor was it on the committee’s calendar, which could be a violation of state law regarding public meetings.
With its original chief sponsors now gone, the bill is now back to Sen. Mary Hodge (D-Brighton), who carried the 2013 version, as one of its sponsors, along with Tochtrop and Sen. Scott Renfroe (R-Greeley). SB 93 now goes to the full Senate for debate.
But there’s still one more wrinkle for the bill. Last year, House Majority Leader Dickey Lee Hullinghorst (D-Boulder) told this reporter she was strongly opposed to the bill. She confirmed that she hasn’t changed her position and is opposed to it again this year. Should it reach the House, it may run into the same problems it had last year.
In other news at the capitol:
You’ll almost never hear the words “firearms” and “unanimous vote” in the same sentence, but this week the Senate unanimously approved a bill on firearms. It was an almost unheard-of success for a block of Republican senators who sponsored SB 135, a bill to strike a section of state law that allows Colorado resident to purchase firearms only in states with common borders. It also marked a rare success for its chief sponsor, Brophy, with the Senate State, Veterans and Military Affairs Committee. Brophy became one of only four Republicans so far this session to get a bill out of the Democratic-controlled committee.
Brophy told the State Affairs committee Monday that if passed, the law would allow Colorado residents to purchase a rifle or shotgun in any state, not just in states that share a common border with Colorado. Purchasers would still have to follow applicable state laws and federal background check laws, and it would not apply to handguns sales. The bill brings Colorado law into compliance with federal laws passed in in 1986.
The State Affairs committee has not been a happy place for most Senate Republicans; the so-called “kill committee” has dispatched 19 Republican-sponsored bills in the first 40 days of the 2014 session. That includes two bills from Brophy on multi-state health insurance, bills to repeal last year’s controversial law on renewable energy for rural electric co-ops, and four bills that targeted last year’s laws on firearms purchases.
SB 135 got initial approval from the Senate Wednesday and a final 35-0 vote on Thursday. It moves on to the House for further consideration.
