Citations Affected: IC 32-23.
Synopsis: The rights of owners in coal lands. Establishes court
procedures to establish terms under which a person with a partial
ownership or leasehold interest may secure a lease on the uncontrolled
remaining coal interest in order to mine the coal.
Effective: July 1, 2009.
January 14, 2009, read first time and referred to Committee on Commerce, Energy,
Technology and Utilities.
February 2, 2009, amended, reported _ Do Pass.
A BILL FOR AN ACT to amend the Indiana Code concerning
property.
the term does not include a person with only a leasehold, easement,
or right-of-way interest in the coal land.
Sec. 4. As used in this chapter, "joint owner" means a person
who is a joint tenant, a tenant in common, a tenant by the entirety,
or other person who is a coal owner of less than one hundred
percent (100%) of an undivided interest in all the coal within the
coal land that is sought to be developed.
Sec. 5. A proceeding under this chapter must be brought in the
circuit or superior court of the county:
(1) where the coal land sought to be affected is entirely
located; or
(2) if the coal land is located in more than one (1) county, the
county where the major part of the coal land is located.
Sec. 6. (a) If the title to coal lying within the land is owned by
joint owners, a coal owner or coal lessee of the coal owner that
meets the requirements under this chapter is authorized to mine
and remove coal from the land subject to this chapter.
(b) The circuit or superior court of the county in which the coal
land or the major part of the coal land lies may:
(1) declare a trust in the coal land;
(2) appoint without a bond a trustee for all persons owning an
interest in the coal land who are not plaintiffs or the lessor of
the plaintiffs under a valid and subsisting coal lease; and
(3) authorize the trustee to sell, execute, and deliver a valid
lease on the coal land on behalf of each defendant on terms
and conditions approved by the circuit court as provided in
this chapter.
(c) A lease created under this chapter continues after the
termination of the trust, unless the lease has expired by its own
terms.
Sec. 7. Proceedings for the appointment of a trustee may be
instituted by any person who is:
(1) a coal owner of the coal sought to be developed; or
(2) vested with a valid and subsisting coal lease, if the lessor
is a person described in subdivision (1).
Sec. 8. (a) The person seeking to create a trust for an interest in
coal land for the purpose of leasing and developing the coal interest
shall join as a defendant each person who has a legal interest in the
coal land, except for any plaintiffs or persons having a legal
interest in the coal land who at the time of the action are parties to
a valid and existing lease granting to the plaintiff the mining rights
sought by the plaintiff. A person who might have a contingent or
future interest in the coal land is bound by the judgment entered
in the proceedings.
(b) The plaintiff shall file a verified petition that specifically sets
forth the following:
(1) The request of each plaintiff that a trustee be appointed to
execute a lease granting the plaintiff the right to mine and
remove coal from the subject coal land.
(2) The legal description of the coal land.
(3) The interest of the plaintiff in the coal within the coal land.
(4) The apparent interest of each defendant in the coal within
the coal land.
(5) A statement that the plaintiff is willing to purchase a
mineral lease covering the interest of each defendant and that
the existence of these unleased mineral interests is detrimental
to and impairs the enjoyment of the interest of the plaintiff.
(c) The Indiana rules of trial procedure govern an action under
this chapter to make an unknown party a defendant.
(d) The court shall appoint a guardian ad litem for any
defendant to the proceeding who is a ward of the state or a ward to
another person.
(e) If it appears to the court that a person who is not in being,
but upon coming into being, is or may be entitled to any interest in
the property sought to be leased, the court shall appoint a guardian
ad litem to appear for and represent the interest in the proceeding
and to defend the proceeding on behalf of the person not in being.
A judgment or order entered by the circuit court in the proceeding
is effective against the person not in being.
(f) The court shall receive evidence and hear testimony
concerning:
(1) the matters in the plaintiff's petition; and
(2) the prevailing terms of similar coal leases obtained in the
vicinity of the coal land in the petition, including the length of
the lease term, bonus money, delay rentals, royalty rates, and
other forms of lease payments.
If, upon taking evidence and hearing testimony, the court
determines that the material allegations of the petition are true and
that there has been compliance with the required notice provisions,
the court shall enter an order determining the interest of each
defendant in the coal land sought to be leased. The court shall also
appoint a trustee for the purpose of executing in favor of the
plaintiff a coal lease covering the interest of each defendant. The
court's judgment appointing the trustee and authorizing the
execution of the lease must specify the minimum terms that may be
accepted by the trustee. Those terms must be substantially
consistent with the terms of other similar coal leases obtained in
the vicinity as determined by the court. The terms of the coal lease
also must be substantially consistent with the terms of other
existing leases, if any, covering the remaining coal interests in the
land described in the petition.
(g) The coal land to be covered by a coal lease must be
contiguous. To the extent that any of the coal land described in the
petition is not contiguous to other coal land in the petition, that
coal land must be subject to separate coal leases.
(h) The court shall determine a reasonable fee to be paid to the
trustee and the trustee's reasonable attorney's fees and costs of the
proceeding, which shall be paid by the plaintiff.
(i) Each plaintiff shall promptly furnish to the court a report of
proceedings of the evidence received and testimony taken at the
hearing on the petition. The report of proceedings shall be filed and
made a part of the case record.
(j) In proceedings under this chapter, the circuit or superior
court may:
(1) investigate and determine questions of conflicting or
controverted titles;
(2) remove invalid and inapplicable encumbrances from the
title to the coal land; and
(3) establish and confirm the title to the coal or the right to
mine and remove coal from any of the coal land.
Sec. 9. (a) The trustee shall:
(1) enter into negotiations with the plaintiff;
(2) execute a coal lease in favor of the plaintiff covering the
interest of the defendant that reflects the findings and
judgment of the circuit or superior court; and
(3) promptly prepare and file a report of the coal lease stating
the terms of the lease and the payments received for the lease
and give notice to all parties appearing of record.
(b) The circuit or superior court shall review the coal lease
under subsection (a) to determine if the sale is in accordance with
the court's findings and judgment. If the circuit or superior court
approves the sale of the coal lease, the court shall:
(1) issue an order confirming the sale; and
(2) issue an order terminating the trust.
Sec. 10. Any payment that is owed to a defendant under a coal
lease executed by the trustee must be paid by the plaintiff directly
to the defendant.
Sec. 11. The sale of and execution of any coal lease under this
chapter is binding concerning the interest in the coal and the right
to mine and remove the coal owned by any defendant to the action
in the same manner as if the defendant had personally signed and
delivered the lease. The coal lease is binding on the heirs, legatees,
personal representatives, successors, and assigns of the defendant.
Sec. 12. (a) If a trustee:
(1) dies or resigns; or
(2) refuses or is unable to act;
the circuit or superior court shall, upon either the court's motion
or the motion of a plaintiff, appoint a successor trustee.
(b) After the entry of the initial judgment authorizing a lease, all
subsequent proceedings pertaining to the coal land and the coal
interest involved in the initial litigation, including subsequent
leasing proceedings or proceedings by the trustee requesting
authority to execute and deliver additional documents pertaining
to a coal lease, must be commenced in the same court as the
proceedings for the initial lease. The acting trustee at the time of
any subsequent proceedings shall act as the trustee in the
subsequent proceedings. The circuit or superior court retains
continuing jurisdiction over any subsequent proceedings.
Sec. 13. The court costs related to the proceedings allowed
under this chapter must be paid by the plaintiff.
Sec. 14. This chapter shall be liberally construed so that any
lease issued under this chapter conveys marketable title.