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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

Re: Right of Mining Companies To Condemn Land For Mineral Haulage  Posted: October 9, 2001

Kentucky Resources Council, Inc.

Post Office Box 1070

Frankfort, Kentucky 40602

(502) 875-2428 phone (502) 875-2845 fax

e-mail FitzKRC@aol.com

October 3, 2001

To: Reid Paxton

From: Tom FitzGerald

Re: Right of Mining Companies To Condemn Land For Mineral Haulage

Question Presented:

Is there a Kentucky law that allows coal companies the right to condemn property for the purpose of hauling coal, either by road, conveyor, track or pipeline?

Conclusion of Law:

KRS 277.040 authorizes a private party to condemn private lands of another between a mine or quarry and a navigable stream or railroad for construction of a road, track, pipeline or conveyor, provided that each road, pipeline, track or conveyor cannot be more than sixty (60) feet wide. Up to two acres of land can also be condemned at the railroad or navigable water for any necessary buildings.

Under the Kentucky Constitution, KRS 277.040 is vulnerable to constitutional challenge as authorizing taking of private property for private purposes insofar as it is used by a mine or quarry operator to condemn land for construction and use of a private truck haul road, pipeline or conveyor.

Discussion:

Your letter requested confirmation as to whether there is an ancient law on the books that gives coal companies the right to condemn property for the purpose of hauling coal, either by road, conveyor, track, or pipeline. . . . I think it is KRS 416.540.

The statutory provision that you describe is KRS 277.040. Before turning to that provision, some general discussion of condemnation or eminent domain in Kentucky is appropriate.

KRS 416.540-416.990 is the Eminent Domain Act of Kentucky , adopted in 1976, and governs the process of condemning property in the Commonwealth. KRS Chapter 416 contains several grants of statutory power to condemn the lands of others, including:

* The right of a company authorized to construct a railroad to condemn land; (KRS 416.010)

* The right of a County Judge-Executive to condemn land for roads ( KRS 416.100, KRS 178.110) streets, alleys, ditches and bridges (KRS 416.110, KRS 178.120),

* The right of any corporation constructing a dam for hydropower or navigation, and any utility authorized under Kentucky law to produce and supply electricity to condemn needed lands;

(KRS 416.130);

* The right of companies supplying water, electricity, gas or gasoline to utilize rights-of-way of state and county roads to run lines along, under or through; (KRS 416.140); (This is not a grant of condemnation power but is found in this chapter of the state laws);

* The right of any telephone company to condemn a right-of-way; (KRS 416.150);

* The right of a burial association to condemn up to 40 acres for a cemetery (KRS 416.210);

* The right of a private landowner operating a hotel and restaurant to condemn another s land in order to site a water pumping station and a right-of-way for electric service for that pump, in order to provide water if pure water is not otherwise available. (KRS 416.220);

* The right of a corporation to condemn lands for oil or gas pipelines and related facilities including storage fields; (KRS 416.230, KRS 278.502);

* The right of a water association of more than 100 customers to condemn; (KRS 416.340);

* The right of a landowner to condemn a right-of-way across lands of another, up to thirty feet in width, as needed to gain access to the nearest public road; (KRS 416.350).

* Other statutes provide grants of condemnation power; among them KRS 65.530, which authorizes riverport authorities to condemn land; among them.

KRS 416.540 defines the terms used in the chapter, and defines a condemnor as any person, corporation or entity, including the Commonwealth of Kentucky, its agencies and departments, county, municipality and taxing district authorized and empowered by law to exercise the rights of eminent domain. KRS 416.540 does not provide, but simply recognizes the process for condemnation.

Concerning the use of condemnation powers relating to coal mining,

* KRS 152.750 authorizes condemnation by the Commonwealth of private lands for the construction, use or operation of any authorized demonstration project which deal specifically with commercially feasible technologies, techniques and processes for production, transportation, conversion and utilization of coal in liquid gaseous and solid forms.

* KRS 350.570 gives the Commonwealth a right of condemnation of abandoned coal mine sites for reclamation purposes under KRS 350.570.

* KRS 381.635-636 give an owner of land who needs access for the purpose of operating a coal mine or other mine, and marketing the products therefrom, and cannot practicably create surface access, the right to condemn such underground shafts, slopes, passageways or entries under another s land, including the right to install tracks, ventilation and power lines as may be necessary.

* KRS 351.110 requires all underground mines to have two openings, and gives the right of condemnation to create the second opening.

* KRS 277.040, the section of state law to which your request referred, is reprinted below in its entirety, and provides a right of a private owner of a mine or quarry to condemn the land necessary for transporting mined or quarried material to any navigable stream or railroad by conveyor, truck, pipeline or by rail, provided that each track, roadway, conveyor or pipeline cannot be wider than sixty (60) feet. The statute also allows up to 2 acres to be condemned at the railroad or stream for necessary buildings (such as tipples or loadouts). The statute reads:

Any person operating a mine or a stone quarry may, for the purpose of transporting material between any railroad or navigable stream and the mine or quarry, construct and operate a line of railroad, truck road, overhead conveyor, or pipeline from the mine or quarry to the most convenient and accessible point on the railroad or stream, and may, under the Eminent Domain Act of Kentucky, condemn the land necessary for track, truck road, or supports for conveyor, or pipeline, not exceeding sixty (60) feet in width for each track, roadway, conveyor, or pipeline necessarily constructed, and the land for necessary buildings at the railroad or stream, not exceeding two (2) acres. The owner or operator of such railroad shall be governed by the laws relating to other railroads, so far as applicable, and shall have the same rights and privileges granted to corporations owning and operating railroads.

The question posed by KRS 277.040 is whether the General Assembly is acting within the limits of state constitutional power in granting a private landowner the right to utilize the eminent domain act to force another private landowner to accept one or more pipelines, conveyors, roads or track spurs so as to facilitate the movement of mined material to the marketplace by barge or rail.

The Kentucky Constitution and the Eminent Domain Act of Kentucky require that the taking of private property by government must be for a "public purpose." City of Bowling Green v. Cooksey, 858 S.W.2d 190 (Ky.App. 1992). The courts, and not the legislature, decide whether the uses for which the legislature has authorized condemnation powers are legitimate under the constitution:

While it has been concluded that the "necessity" for the

exercise of eminent domain is one primarily and almost exclusively for the legislative branch, the question of

whether the proposed condemned property is to be used

for a "public" purpose is one to be determined by the

judiciary. See e.g., Idol v. Knuckles, Ky., 383 S.W.2d 910 (1964); Jefferson County v. Clausen, 297 Ky. 414, 180

S.W.2d 297 (1944); Spahn v. Stewart, 268 Ky. 97, 103

S.W.2d 651 (1937).

Cooksey, supra, 858 S.W.2d 192

The case of Greasy Creek Mineral Company v. Ely Jellico Coal Company,116 S.W. 1189, 132 Ky. 692 (Ky. 1909) involved the application of an earlier version of KRS 277.040. Under the earlier iteration of the statute, Kentucky Statute Section 815, which stated that:

Any person engaged in operating a mine or stone quarry

within three miles of any navigable stream or railroad, may,

for the purpose of transporting material to and from such stream or railroad and such mine or quarry, construct and operate a railroad from such mine or quarry to the most convenient and accessible point on such stream or road,

and may, under the general laws, condemn such land as

may be necessary, not exceeding fifty feet in width for each track necessarily constructed, and not exceeding two acres

of land at such railroad or stream for the purpose of necessary buildings. The owner or operator of such road shall be, so

far as they are applicable, governed and controlled by the

laws relating to other railroads, and shall have the same

rights and privileges granted to corporations owning and operating lines of railroad.

In Greasy Creek the Court rejected an objection of the owner of the rail spur objected to being required to allow another mine owner to utilize the rail line. The court responded that the statute granting the condemnation power allowing construction of a railroad line for moving minerals imposed an obligation on the mine owner to act as a common carrier, providing open access to the line.

KRS 277.040 as currently written still requires that if the mineral owner constructs a railroad that the rail line must be available for use as a common carrier.

However, the statute has been amended, in 1904, 1954 and 1976, and now also grants that private mine operator (it need not even be the landowner) may construct a road, pipeline or conveyor. The current statute does not require that the truck haulage road, pipeline or conveyor be open to public use.

The case of Chesapeake Stone Co. v. Moreland. 104 S.W. 762, 126 Ky. 656, (Ky. 1907) involved a separate former law that granted a right of condemnation over others lands in order to market mineral and timber, but provided that the condemnor would not have exclusive use of the passage and would have to allow others to use the passage upon payment of proper compensation.

Rejecting the proposition that the legislature defined whether the purpose is public, the Court ruled:

While the courts will not shut their eyes to the necessity

that exists for the development of the state, and will aid in every reasonable way the efforts of those who are trying to build it up, yet these considerations will not be permitted to destroy the ancient and valuable right that private property shall not be taken except for public use. The act in question goes to the very limit of legislative power and discretion.

Under it is provided a means by which the owner of land,

upon which may be found coal, oil, gas, timber, or mineral

of any character, may take land to enable him to carry the product to any of the natural or artificial highways of transportation. The only limitation upon the right of the individual to the exclusive use, operation, and control of the way is found in the provision that any other person desiring

so to do shall have the right to its use upon paying reasonable compensation. This is the only clause that saves the act from judicial condemnation. Giving to this provision the most liberal construction, it may be deemed to allow a use by the public of the way, although the person at whose instance it was taken opposes it; and hence it will be considered to have been taken for a public use, not upon the ground that the public will be benefited by the product gathered from the mine, well, or forest, but upon the ground that the public, or any number

so desiring, may use the way.

The court in Chesapeake Stone made clear that the existence of a clause giving any member of the public the right to use and enjoy the property taken was the only clause that saves the act from judicial condemnation, and that without such a clause the taking of land for a mineral haul road would be for a private use and would be in excess of the legislature s power to grant. The controlling question, as framed by the Chesapeake court and reiterated in later cases, is whether the public has the same right to use the road on the same terms as the person at whose instance the way was established.

In stark contrast, the current statute allows construction of conveyors, pipelines, and roads in addition to rail lines, and does not impose any obligation to allow public use of the road, pipeline, or conveyor. It would appear that the current statute allows an individual to take the property of another and to exercise absolute control over that road, pipeline or conveyor, in contradiction to the principle announced by the Chesapeake Stone Court that the public must have some right to use and enjoy the property taken in order for the statute granting a private party the power of condemnation to withstand constitutional scrutiny and to escape the prohibition that private property cannot be taken for private use. While the rule of Chesapeake Stone has been somewhat softened in the context of upholding drainage projects, it remains the law in the Commonwealth.

In sum, so much of KRS 277.040 as authorizes condemnation for a rail line by a mine or quarry operator would likely be found to be constitutional under Kentucky law, under the rule of the Greasy Creek decision, but so much of KRS 277.040 as purports to grant a right to a private mine operator to condemn other private lands in order to site and operate a private and exclusive coal conveyor belt, pipeline or truck haul road, appears to be vulnerable to a legal challenge as being violative of Kentucky Constitution Sections 13 and 242, under the test announced in Chesapeake Stone prohibiting the taking of private property for private use.



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