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SB 2335

AN ACT to create and enact a new section to chapter 38-11.1 of the North Dakota Century Code, relating to pretrial appraisals; and to amend and reenact section 38-11.1-09 of the North Dakota Century Code, relating to the recovery of attorney's fees in an action relating to oil and gas production.

69th Legislative Assembly (2025-26) Introduced by Mike Dwyer and 2 co-sponsors

ND SB 2335 requires a certified pre-litigation appraisal for oil/gas surface-damage claims; developers reimburse appraisal costs and get 30 days to rebid after appraisal.

Filed with Secretary Of State 04/08
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Bill Summary · SB 2335

Summary — SB 2335 (North Dakota)

Status: Introduced March 12, 2025; signed by Governor April 7, 2025; filed with Secretary of State April 8, 2025. Companion: HB 4822.

Purpose / Intent

SB 2335 adds a pre‑litigation appraisal requirement to North Dakota’s oil and gas surface damage statute (chapter 38‑11.1) and clarifies the fee‑and‑costs remedy available to surface owners who reject a developer’s offer and obtain a higher court award. The bill is intended to encourage early valuation, promote settlement, and allocate appraisal costs.

Key provisions

  1. New pretrial appraisal requirement (new section to chapter 38‑11.1)

    • Before bringing an action to recover compensation for surface damages from drilling operations, a person entitled to compensation (surface owner) must obtain a written appraisal valuing all parcels affected or foreseeably affected.
    • The appraisal must be performed by a “certified appraiser” (as defined in NDCC §43‑23.3‑01) or by an individual holding a temporary or specific appraisal permit (§43‑23.3‑11 or §43‑23.3‑04.1).
    • The surface owner must provide a copy of the appraisal to the mineral developer before a court may take jurisdiction. The developer has 30 days after receiving the appraisal to make a new settlement offer; that offer becomes the offer contemplated by §38‑11.1‑09.
    • The mineral developer must reimburse the surface owner’s reasonable actual appraisal costs or, at the surface owner’s election, pay the appraiser directly.
    • The required appraisal (or the opinion of value it contains) is inadmissible at trial unless the surface owner offers it; the statute does not otherwise limit the introduction of other specific evidence.

  2. Amendment to §38‑11.1‑09 (fees, costs, interest)

    • If a surface owner rejects a developer’s offer and the court awards a larger amount, the court shall award the surface owner: reasonable attorney’s fees, court costs and disbursements (under chapter 28‑26), and interest on the awarded amount from the day drilling commenced.
    • Interest is calculated at the Bank of North Dakota prime rate in effect on the date of judgment.
    • (Note: earlier drafts variably referenced expert witness fees; the enrolled language emphasizes attorney fees, costs/disbursements, and interest.)

Who is affected

  • Surface owners/landowners seeking compensation for damage from oil and gas drilling.
  • Mineral developers / oil and gas operators who may now be required to reimburse appraisal costs and may receive a new settlement offer after an appraisal.
  • Appraisers (must be certified or permitted under referenced ND appraisal statutes).
  • Courts handling chapter 38‑11.1 actions (jurisdiction is conditioned on appraisal notice).

Practical impacts / considerations

  • Likely increases upfront procedural and timing costs for surface owners (need to obtain an appraisal) but shifts payment responsibility to the mineral developer.
  • Encourages settlement by giving developers a 30‑day window to update offers based on an appraisal.
  • Limits automatic admission of appraisals at trial (protects against prejudicial admission unless offered by the surface owner).
  • Could reduce frivolous litigation and narrow disputes to contested valuation elements, but may also delay filing while appraisals are procured.
  • Establishes a clear fee/interest incentive for surface owners who obtain greater judicial awards than developers’ offers.

Procedural/timeline notes

  • Introduced March 12, 2025; committee and floor actions recorded through March–April 2025; enrolled and certified with unanimous chamber votes per enrollment pages; signed by Governor April 7, 2025 and filed with Secretary of State April 8, 2025.

Compiled from official sources — confirm details with the bill’s official record.

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