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Regular Session, 2010
HOUSE BILL NO. 977
BY REPRESENTATIVE HARRISON
MINERALS/LEASES: Provides relative to the administration and management of the
state's mineral resources
AN ACT1
To amend and reenact R.S. 30:136(A)(1)(a) and (c) and 209(4)(b) and (5) and to enact R.S.2
44:4(44), relative to the office of mineral resources; to provide for reporting of3
royalty payments for mineral leases on state lands; to authorize audits of royalty4
payments; to authorize the assessment and collection of liquidated damages in5
certain circumstances; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 30:136(A)(1)(a) and (c) and 209(4)(b) and (5) are hereby amended8
and reenacted to read as follows:9
§136. Funds, disposition and appropriation of; penalties10
A.(1)(a) All bonuses, rentals, royalties, shut-in payments, or other sums11
payable to the state as the lessor under the terms of valid existing mineral leases12
entered into under this Subpart or previously granted by the state and under the13
supervision of the board or from leases hereafter granted shall be paid to the office14
of mineral resources, by check or electronic wire transfers only, and all such15
payments if made payable to the register of the state land office as previously16
required, may be endorsed and otherwise processed by the secretary of the17
Department of Natural Resources pursuant to his general authority in regard to the18
functions of that office as provided in R.S. 36:921 through R.S. 36:926. All payors19 HLS 10RS-458 ORIGINAL
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of royalties under a mineral lease awarded by the state mineral board, or by a1
governmental entity whose mineral leases are administered by the office of mineral2
resources on behalf of that entity, shall file each month with the office of mineral3
resources, in a form with content set forth by the office of mineral resources, a4
written report on all royalty payments made. The state mineral board may adopt5
rules, in accordance with the Administrative Procedure Act, which provide for the6
assessment and collection of liquidated damages for failure to file such report. A7
payor of royalty whose total monthly payment is fifty thousand dollars or more shall8
pay the royalty payment by electronic wire transfer. A payor of royalties whose9
annual royalty payment is less than one thousand dollars, in lieu of monthly royalty10
reports, shall submit an annual report beginning on July 1, 2010; however, royalty11
payments shall remain due monthly. If the commissioner of conservation assigns a12
lease unit well code number to cover production attributable to all or a portion of one13
or more state mineral leases, whether by unit or otherwise, all royalties paid to the14
state from production attributable to that lease unit code number shall be paid by one15
payor.16
* * *17
(c) The immediate acceptance of such payments shall not prejudice either the18
right of the state as lessor or the rights of the state's lessee or lessees as provided19
under the terms of the validly existing mineral leases. A lessee, operator, or other20
person directly involved in developing, producing, transporting, purchasing, or21
selling oil, gas, or other minerals from state leases shall establish, maintain, and22
make available for inspection or audit by the office of mineral resources auditors any23
information that is reasonably relevant to the computation of royalties, and upon the24
request by any such auditor the office of mineral resources, the appropriate records,25
reports, or information shall be made available for duplication. All records which26
are filed by or received from any person by the office of mineral resources, or any27
official or employee in the office of mineral resources, or which in any manner is in28
the custody or control of the office of mineral resources, or any official or employee29 HLS 10RS-458 ORIGINAL
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in the office of mineral resources shall be deemed public record except where such1
record is designated as confidential by law; however, in order to prevent the2
impairment of an ongoing audit investigation by the office of mineral resources, all3
audit working papers, records, or any information provided by the entity being4
audited shall remain confidential during the investigation and until the audit is5
complete. Once the audit investigation has been deemed complete by the office of6
mineral resources, all audit working papers, records, and information obtained under7
this Subtitle shall be made available to the public except for all oil and gas sales8
contracts, natural gas liquids processing contracts, natural gas liquids sales contracts,9
and any other proprietary information received from the company being audited that10
has been determined by the secretary of the Department of Natural Resources to be11
confidential. If the secretary determines that a record shall be held confidential, he12
shall make that determination in writing. Records determined confidential by the13
secretary under the provisions of this Section shall be held confidential by the office14
of mineral resources and shall not be subject to the Public Records Act.15
* * *16
§209. State Mineral and Energy Board, authority of17
In order to carry out the provisions of R.S. 30:208, the State Mineral and18
Energy Board may:19
* * *20
(4)21
* * *22
(b) The office of mineral resources, on behalf of the mineral board, shall23
administer all operating agreements. After deposit of all production payments to the24
Bond Security and Redemption Fund, an amount equal to twenty-five percent of the25
production payments from any operating agreement entered into after August 15,26
1997, shall be credited to the Mineral and Energy Operation Fund for appropriation27
to the Department of Natural Resources. The board may also determine that it is in28
the best interest of the state to require the prospective operator to pay to the office29 HLS 10RS-458 ORIGINAL
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of mineral resources a reasonable liquidated damage assessment to offset any bonus1
which may have been realized from leasing such property.2
* * *3
(5) Do all other things which may appear to be necessary or desirable to4
manage and administer the exploration and development of the mineral resources on5
lands belonging to the state.6
Section 2. R.S. 44:4(44) is hereby enacted to read as follows:7
§4. Applicability8
This Chapter shall not apply:9
* * *10
(44) To any records, data, writings, accounts, reports, letters, exhibits,11
pictures, photographs, drawings, charts, maps, or copies or memoranda thereof,12
whether written or oral, which are related to a royalty audit conducted by the office13
of mineral resources of the Department of Natural Resources under the provisions14
of R.S. 30:136(A) and which are filed by or received from any person by the office15
of mineral resources of the Department of Natural Resources, or any official or16
employee in the office of mineral resources of the Department of Natural Resources,17
or which in any manner is in the custody or control of the office of mineral resources18
of the Department of Natural Resources, or any official or employee in the office of19
mineral resources of the Department of Natural Resources.20
Section 3. This Act shall become effective upon signature by the governor or, if not21
signed by the governor, upon expiration of the time for bills to become law without signature22
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If23
vetoed by the governor and subsequently approved by the legislature, this Act shall become24
effective on the day following such approval.25 HLS 10RS-458 ORIGINAL
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Harrison HB No. 977
Abstract: Provides for management of royalty and bonus payments by the State Mineral
and Energy Board and the office of mineral resources of the Dept. of Natural
Resources.
Relative to payment of royalties for leases awarded or administered by the office of mineral
resources of the Dept. of Natural Resources, proposed law requires payors to file a written
report each month to the office. Authorizes payors whose annual payment is less than
$1,000 to submit payments monthly by an annual report. Requires that all royalties due
under a unit be paid by one payor.
Proposed law further provides that if an audit is performed by the office of mineral
resources, while the audit is ongoing, any information provided for the audit or contained
in the audit shall be confidential. Delineates what will be public record after the audit and
what will remain confidential. Authorizes the secretary of the Dept. of Natural Resources
to determine that a record should remain confidential. Requires such determination to be in
writing and provides that those records are not subject to the Public Records Act.
Proposed law authorizes the State Mineral and Energy Board, under operating agreements
administered by the board, to require a prospective operator to pay a reasonable liquidated
damage assessment to offset any bonus which could have been realized from leasing state
property.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 30:136(A)(1)(a) and (c) and 209(4)(b) and (5); Adds R.S. 44:4(44))