§ 99-99-301 — Use of surface waters and tributaries for transportation of coal to other states

(a) On the advice of the state engineer the legislature of
the state of Wyoming hereby grants to Texas Eastern Wyoming,
Inc., a Delaware corporation (to the extent that it is or may be
the holder of a permit, certificate or application to
appropriate, store or divert water), all approval required by
W.S. 41-3-105 and 41-3-115 to use outside of the state of
Wyoming not more than twenty thousand (20,000) acre-feet
annually of the surface waters of the Little Bighorn River and
its tributaries (including intrastate and interstate
tributaries) as a medium of pipeline transportation of coal to
another state or states and for uses related to or connected
with a pipeline system of transportation of coal. No more than
ten thousand (10,000) acre-feet of such water shall be used
annually to transport coal other than coal mined within the
boundaries of Wyoming.
(b) The approval granted by this act to use not more than
twenty thousand (20,000) acre-feet annually of such surface
waters outside the state of Wyoming shall automatically
terminate if there is a permanent termination of the use of such
surface waters as a medium of pipeline transportation of coal.
(c) The use of such surface waters outside the state of
Wyoming pursuant to this approval shall not require a grant of
reciprocal rights from any adjoining states as set forth in W.S.
41-3-115(c).
(d) If any portion of the twenty thousand (20,000)
acre-feet of surface water is conveyed outside the state of
Wyoming and then returned to the state of Wyoming, any such
water may be again conveyed outside the state but shall not be
counted again in determining the total twenty thousand (20,000)
acre-feet annual quantity of water.
(e) Appropriation of the surface waters to be used
pursuant to this section shall be in accordance with Title 41,
Chapters 3 and 4, Wyoming Statutes 1977. Nothing in this section
shall be construed as a directive to the state engineer to grant
any approval or issue or amend permits, or in any way infringe
on his discretion under the state law.
(f) The approvals, rights and benefits granted by this
section may be pledged, mortgaged or otherwise hypothecated in
connection with any financing and shall also inure to the
benefit of any successors or assigns of Texas Eastern Wyoming,
Inc. Provided that each such successor or assign is a
corporation, partnership, joint venture or other entity with
respect to which Texas Eastern Wyoming, Inc., or a parent,
subsidiary or other affiliate thereof, is a member or the holder
of equity interest.
(g) Notwithstanding the effective date of this section,
the approval granted by this section shall terminate and expire
unless, within ninety (90) days after the effective date of this
section, an initial contract is entered into by and between but
not limited to the state and Texas Eastern Wyoming, Inc., which
is signed by the governor upon the advice of the attorney
general that the contract contains in appropriate form and
detail the provisions set forth in subsection (h) of this
section.
(h) The contract referred to in subsection (g) of this
section shall contain provisions as follows:
(i) There shall be a joint study, conducted pursuant
to W.S. 41-2-114(c), to be funded entirely by Texas Eastern
Wyoming, Inc., (hereinafter referred to as "Texas Eastern") to
evaluate the feasibility of a water project to develop the
surface waters of the Little Bighorn River including its
interstate and intrastate tributaries. The present description
of the water project, based upon engineering estimates of the
water which will be available from the Little Bighorn River,
consists of a maximum diversion of three hundred (300) cubic
feet per second from the Little Bighorn River through a water
pipeline to a reservoir or two (2) reservoirs to store forty-two
thousand five hundred eighty (42,580) acre-feet of water
annually;
(ii) If, after completion of the joint feasibility
study, Texas Eastern desires to proceed with development, the
state will have three (3) options. The state will have the
exclusive right to determine which option it desires to select;
(iii) First option:
(A) If the state determines to select the first
option, Texas Eastern will finance, construct and own the water
project and the related water rights, and Texas Eastern will
operate and maintain the water project and pay all costs in
connection therewith;
(B) The water in excess of a firm yield of
twenty thousand (20,000) acre-feet per annum (or any lesser
quantity which is required for the slurry pipeline
transportation system) will be made available for sale at the
reservoir to the state at a cost equal to a pro rata share of
all operating and maintenance costs of the water project;
(C) The state will be entitled to sell the water
it purchases from Texas Eastern at such prices as the state may
determine but the state will agree that it will not sell water
for industrial use at a price less than the cost per acre-foot
of water to Texas Eastern. The state will also agree that it
will not sell water for industrial use unless the purchaser
contracts with Texas Eastern to pay an annual amount equal to
the actual sums Texas Eastern is required to pay to the present
owners of the water rights, but the state will have no liability
for such payments to Texas Eastern or to the present owners of
the water rights;
(D) The state will be entitled to all revenues
from water sales;
(E) If the state sells water from the water
project for industrial use, the state will sell the water only
after complying with the review and public hearing processes
provided by W.S. 41-2-115, and any water sale for industrial use
will be contingent upon the industrial user's obtaining any
permit required by law;
(F) The reservoirs will be available for public
recreational uses;
(G) Texas Eastern will provide the state,
political subdivisions or special districts an opportunity to
obtain capacity in any water pipeline Texas Eastern constructs
to transport water from the water project at a capital cost and
operating cost equal only to the incremental cost of
constructing and operating a larger water pipeline to provide
additional capacity for use of the state, political subdivisions
or special districts;
(H) After the use of water from the water
project for the slurry pipeline transportation system is
permanently terminated, good and marketable title to the water
project and the related water rights will be conveyed to the
state without cost to the state.
(iv) Second option:
(A) If the state determines to select the second
option, the state will issue its tax exempt revenue bonds to
finance the water project and the state will construct, own and
operate the water project and will own the related water rights.
Good and marketable title to the related water rights will be
conveyed to the state without cost to the state;
(B) The state will sell and Texas Eastern will
purchase a firm yield of twenty thousand (20,000) acre-feet per
annum from the state (or any lesser quantity which is required
for the pipeline transportation system);
(C) Texas Eastern will pay the present owners of
the water rights an annual amount for use of the water for the
slurry pipeline transportation system pursuant to the water
rights. In addition, Texas Eastern will pay the following
amounts to the parties indicated for the water purchased,
regardless of the amount of water actually used by Texas
Eastern:
(I) An annual amount equal to all principal
and interest payable on the revenue bonds of the state;
(II) An annual amount to be determined by
the state treasurer equal to the difference between the actual
interest on the tax exempt revenue bonds of the state and the
interest which would have been paid if corporate bonds had been
issued to finance the water project as a part of the slurry
pipeline transportation system payable to the Wyoming Water
Development Account;
(III) An annual amount in lieu of taxes
equal to all ad valorem taxes for all taxing jurisdictions
payable to the taxing jurisdictions to the same extent as if
Texas Eastern owned the water project;
(IV) An annual amount equal to all
operating and maintenance costs of the water project.
(D) The state will be entitled to sell water in
excess of the water committed to Texas Eastern at such prices as
the state may determine but the state will agree that it will
not sell water for industrial use at a price less than the cost
per acre-foot of water to Texas Eastern. The state will also
agree that it will not sell water for industrial use unless the
purchaser contracts with Texas Eastern to pay an annual amount
equal to the actual sums Texas Eastern is required to pay to the
present owners of the water rights, but the state will have no
liability for such payments to Texas Eastern or to the present
owners of the water rights;
(E) To the extent that the state sells water
from the water project other than to Texas Eastern, the state
will pay a pro rata share of the operating and maintenance costs
of the water project and will to such extent credit Texas
Eastern's obligation to pay all operating and maintenance costs;
(F) The state will be entitled to all revenues
from water sales under subparagraph (D) of this subsection;
(G) If the state sells water from the water
project for industrial use, the state will sell the water only
after complying with the review and public hearing processes
provided by law and any water sale for industrial use will be
contingent upon the industrial user's obtaining any permit
required by law;
(H) Texas Eastern will provide the state,
political subdivisions or special districts an opportunity to
obtain capacity in any water pipeline Texas Eastern constructs
to transport water from the water project at a capital cost and
operating cost equal only to the incremental cost of
constructing and operating the water pipeline to provide
additional capacity for use of the state, political subdivisions
or special districts.
(v) Third option:
(A) If the state determines to select the third
option, Texas Eastern will finance, construct and operate the
water project and will own the related water rights without
participation by the state;
(B) Texas Eastern will amend the water permits
so that the water is not authorized to be used for industrial
use other than for a slurry pipeline transportation system;
(C) The reservoir will be available for public
recreational uses;
(D) Texas Eastern will provide the state,
political subdivisions or special districts an opportunity to
obtain capacity in any water pipeline Texas Eastern constructs
to transport water from the water project at a capital cost and
operating cost equal only to the incremental cost of
constructing and operating a larger water pipeline to provide
additional capacity for use in the state, political subdivisions
and special districts;
(E) After the use of water for the slurry
pipeline system is permanently terminated, good and marketable
title to the water project and the related water rights will be
conveyed to the state without cost to the state, if agreed to by
the state.
(vi) As a material consideration for and as a
condition of the use of the water described in subsection (a) of
this section, Texas Eastern Wyoming, Inc., shall agree, by
contract, that if any coal slurry preparation plant utilizing
water authorized under this section is constructed outside of
the state of Wyoming, then Texas Eastern Wyoming, Inc. shall
annually pay to each entity involved an amount equal to the ad
valorem taxes which would be due to any taxing entity having
authority to levy an ad valorem tax on the plant if the
preparation plant facilities were located at the principal
reservoir site in Sheridan County, Wyoming.
(j) In connection with the implementation of this section,
on behalf of the state, the governor may enter into contracts on
such terms and conditions as may be deemed desirable with any
persons or entities with regard to development of a water
project using the waters of the Little Bighorn River or
connected with the project. Nothing in this section may be
construed as requiring the governor to enter into any contract.
(Laws 1979, Ch. 97, § 1; 2005, Ch. 231, § 1; Renumbered from
41-2-301 by Laws 2009, Ch. 168, § 401.)