HLS 11RS-291 ORIGINAL
Page 1 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2011
HOUSE BILL NO. 212
BY REPRESENTATIVE MORRIS
NATURAL RESOURCES DEPT: Authorizes the issuance of bonds for remediation and
restoration of certain oilfield sites
AN ACT1
To amend and reenact R.S. 30:82, 84(A)(1), 86(B), (C), and (E)(1), and 95(A) and to enact2
R.S. 30:83(F)(2) and 83.1, relative to the Oilfield Site Restoration Commission; to3
provide for definitions; to authorize the issuance of bonds for certain purposes; to4
provide for the pledge and dedication of the monies deposited in the Oilfield Site5
Restoration Fund derived from certain sources; to provide for the duties and powers6
of the secretary of the Department of Natural Resources; to provide for the liability7
of the state; to provide relative to the requirements and limitations for issuance of8
revenue bonds; to authorize the execution of certain documents; and to provide for9
related matters.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 30:82, 84(A)(1), 86(B), (C), and (E)(1), and 95(A) are hereby12
amended and reenacted and R.S. 30:83(F)(2) and 83.1 are hereby enacted to read as follows:13
§82. Definitions14
As used in this Part, the following terms shall have the meanings ascribed to15
them in this Section, unless the context or use clearly indicates otherwise:16
(1) "Assistant secretary" means the assistant secretary of the office of17
conservation within the Department of Natural Resources or his authorized18
representatives.19
(2) "Bonds" means revenue bonds, notes, certificates, or other evidences of20
indebtedness issued by an issuer pursuant to R.S. 30:83.1.21 HLS 11RS-291 ORIGINAL
HB NO. 212
Page 2 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(2) (3) "Commission" means the Oilfield Site Restoration Commission.1
(3) (4) "Department" means the Department of Natural Resources.2
(4) (5) "Fund" means the Oilfield Site Restoration Fund.3
(6) "Issuer" means a public trust and public corporation organized and4
existing by, under, and pursuant to the provisions of R.S. 9:2341 through 2347,5
whose beneficiary is the state of Louisiana, authorized to issue revenue bonds on6
behalf of the state of Louisiana.7
(5) (7) "Nonproducing oilfield site" means an oilfield site which is not a8
producing oilfield site and which has not been declared an orphaned oilfield site by9
the assistant secretary.10
(6) (8) "Oilfield site" or "exploration and production (E&P) site" means any11
oilfield site or exploration and production site as defined in R.S. 30:29(I)(4).12
(7) (9) "Orphaned oilfield site" means an oilfield site which has no continued13
useful purpose for the exploration, production, or development of oil or gas and14
which has been declared to be an orphaned oilfield site by the assistant secretary15
under R.S. 30:91.16
(8) (10) "Producing oilfield site" means an oilfield site which is associated17
with the production of oil or gas for at least six months of the preceding calendar18
year.19
(9) (11) "Responsible party" means the operator of record according to the20
office of conservation records, who last operated the property on which the oilfield21
site is located at the time the site is about to be abandoned, ceases operation, or22
becomes an unusable oilfield site, and that operator's partners and working interest23
owners of that oilfield site. A working interest owner is the owner of a mineral right24
who is under an obligation to share in the costs of drilling or producing a well on the25
oilfield site.26
(12) "Revenues" means the revenues described in R.S. 30:83.1(A)(2).27
(10) (13) "Secretary" means the secretary of the Department of Natural28
Resources.29 HLS 11RS-291 ORIGINAL
HB NO. 212
Page 3 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(11) (14) "Site restoration" means any and all oilfield site restoration1
activities required of a responsible party of an oil or gas property by regulations2
adopted by the office of conservation pursuant to this Subtitle, including without3
limitation plugging of oil and gas wells, pit closure, site remediation, and removal4
of oilfield equipment.5
(12) (15) "Unusable oilfield site" means an oilfield site which has no6
continued useful purpose for the exploration, production, or development of oil or7
gas and for which a responsible party can be located.8
§83. Oilfield Site Restoration Commission; Department of Natural Resources9
* * *10
F. The powers of the commission shall be limited to the following:11
* * *12
(2) The commission, at the direction of the secretary, is authorized to pledge13
the sources available to fund authorized purposes and to secure the issuance of bonds14
to fund such purposes provided in R.S. 30.83.1.15
* * *16
§83.1. Authorization of bonds17
A.(1) An issuer is authorized to issue bonds pursuant to the provisions of18
R.S. 9:2341 through 2347 for the benefit of the commission, at the direction of the19
secretary, to raise funds for authorized purposes in accordance with the provisions20
of this Section and the constitutional and statutory provisions governing the issuance21
of bonds by such entities.22
(2) The bonds may be secured by an irrevocable pledge and dedication of23
revenues of the commission, at the direction of the secretary, which shall consist of24
all monies deposited in the fund pursuant to R.S. 30:86(D), collected, derived from,25
or received from the oilfield site restoration fees and penalties imposed pursuant to26
R.S. 30:87 or any other lawfully available revenues, if any, to the extent27
appropriated, but shall not include site specific trust account monies as identified in28
R.S. 30:86(D)(6) and 88. The bonds of the issuer shall be revenue bonds payable29 HLS 11RS-291 ORIGINAL
HB NO. 212
Page 4 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
solely from the above-described sources, to the extent appropriated and released1
from the state, and such pledge shall not constitute a pledge of the full faith and2
credit of the state.3
(3) The bonds shall be entitled to priorities on the revenues pledged and4
dedicated pursuant to Paragraph (2) of this Subsection, subject to the prior pledge5
applicable to outstanding bonds, if any, as provided for in a loan agreement, trust6
indenture, or other instrument entered into with the issuer or otherwise in connection7
with the bonds.8
B.(1) When any bonds have been issued and secured in accordance with the9
provisions of this Section, neither the commission, the department, the state, nor any10
other entity may act to impair any obligation or contract for the benefit of the holders11
of the bonds or discontinue or decrease any fee, penalties, or other revenue in12
anticipation of the collection of which the bonds have been issued until all of the13
bonds have been retired as to principal and interest or irrevocable provision14
otherwise made for their complete redemption and payment in principal, interest, and15
redemption premium, if any, and the complete payment of all amounts due under the16
trust agreement pursuant to which the bonds are issued.17
(2) Any pledge of revenues for the security of the bonds shall be valid and18
binding from the time the pledge is made and shall be subject to the lien of such19
pledge without any physical delivery thereof or further act, and the lien of any such20
pledge shall be valid and binding as against all parties having claims of any kind in21
tort, contract, or otherwise against the state, the department, or the commission22
whether or not such parties have notice thereof. Any trust agreement by which a23
pledge is created need not be filed or recorded.24
(3) The secretary or the undersecretary is hereby authorized on behalf of the25
commission to execute loan agreements, reimbursement agreements, investment26
agreements, bond purchase agreements, and all documents as may be necessary or27
desirable to carry out the provisions of this Section and is further authorized to take28
any and all further actions and execute and deliver all other documents as may be29 HLS 11RS-291 ORIGINAL
HB NO. 212
Page 5 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
necessary in connection with the issuance of any bonds, notes, certificates,1
reimbursement obligations, or other evidences of indebtedness referred to in this2
Section. The provisions of R.S. 9:2347(J) shall not apply to bonds or any contractual3
obligation, including the pledge of state funds, to be undertaken or incurred in4
connection therewith.5
(4) At the direction of the secretary, the commission is authorized to create6
funds or accounts for the deposit of the revenues or the proceeds of the bonds,7
including funds described above or other revenues and monies pledged in connection8
therewith or respect thereto.9
(5) The department and, at the direction of the secretary, the commission are10
authorized to enter into any and all agreements or contracts, execute any and all11
instruments, and do and perform any and all acts necessary, convenient, or desirable12
for the issuance of the bonds or to carry out any power expressly given in this13
Section.14
C. Notwithstanding any provision of law to the contrary, any revenues15
received by the commission pledged to the repayment of any bonds issued in16
accordance with this Section may be collected and disbursed as set forth in the17
documents providing for the issuance of the bonds or other documents related18
thereto.19
§84. Powers of the secretary20
A. The powers of the secretary shall include without limitation the power to21
do the following:22
(1) Make expenditures or commitments to make expenditures from the fund23
or disburse funds for the restoration of oilfield sites as he deems necessary and24
appropriate, including but not limited to disbursement of monies in the fund pursuant25
to R.S. 30:86(E)(2) to pay principal, interest, and related costs in connection with the26
issuance of bonds.27
* * *28 HLS 11RS-291 ORIGINAL
HB NO. 212
Page 6 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
§86. Oilfield Site Restoration Fund1
* * *2
B. The funds received shall be placed in the special trust fund in the custody3
of the state treasurer to be used only in accordance with this Part and shall not be4
placed in the general fund. The funds provided to the commission pursuant to this5
Section shall at all times be and remain the property of the commission. The funds6
shall only be used for the purposes set forth in this Part and for no other7
governmental purposes, nor shall any portion hereof ever be available to borrow8
from by any branch of government. Except for the pledge of the revenues provided9
in R.S. 30:83.1, it is the intent of the legislature that this fund and its increments shall10
remain intact and inviolate. Any interest or earnings of the fund shall be credited11
only to the fund.12
C. The treasurer of the state of Louisiana shall certify, to the secretary of the13
Department of Revenue, the date on which the balance in the fund equals or exceeds14
ten million dollars. The oilfield site restoration fees on oil and gas provided for in15
R.S. 30:87 shall not be collected or required to be paid on or after the first day of the16
second month following the certification, except that the secretary of the Department17
of Revenue shall resume collecting the fees on receipt of a certification from the18
treasurer that, based on the expenditures or commitments to expend monies, the fund19
has fallen below six million dollars. The secretary of the Department of Revenue20
shall continue collecting the fees until collections are again suspended in the manner21
provided by this Section. The sums in the site-specific trust accounts within the fund22
and sums generated from the issuance of bonds pursuant to R.S. 30:83.1 shall not be23
counted to determine the balance of the fund for the purposes of this Subsection.24
* * *25
E. The monies in the fund may be disbursed and expended pursuant to the26
authority and direction of the secretary or assistant secretary for the following27
purposes and uses:28 HLS 11RS-291 ORIGINAL
HB NO. 212
Page 7 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(1) Any oilfield site assessment or restoration conducted by the Department1
of Natural Resources pursuant to this Part, and the payment of the principal, interest,2
and legal fees, credit enhancement fees, trustee fees, and other related costs of3
issuance or ongoing expenses in connection with issuance of bonds or other debt4
obligations on behalf of the commission, at the direction of the secretary, pursuant5
to R.S. 30:83.1 for the purpose of financing the costs of such oilfield site assessments6
and restorations.7
* * *8
§95. No inference of liability on the part of the state9
A. Nothing in this Part shall establish or create any liability or responsibility10
on the part of the commission or the state of Louisiana to pay any costs associated11
with site restoration from any source sources other than the fund created by R.S.12
30:86 or the funds established in connection with the issuance of bonds on behalf of13
the commission, at the direction of the secretary, pursuant to R.S. 30:83.1 nor shall14
the commission or the state of Louisiana have any liability or responsibility to make15
any payments for costs associated with site restoration if the trust created herein is16
insufficient to do so.17
* * *18
Section 2. This Act shall become effective on July 1, 2011; if vetoed by the governor19
and subsequently approved by the legislature, this Act shall become effective on July 1,20
2011, or on the day following such approval by the legislature, whichever is later.21
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)]
Morris HB No. 212
Abstract: Authorizes an issuer, on behalf of the Oilfield Site Restoration Commission, to
issue bonds to raise funds to use for the authorized purposes of the commission. HLS 11RS-291 ORIGINAL
HB NO. 212
Page 8 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Present law provides for the creation of the Oilfield Site Restoration Commission within the
office of the secretary of the Dept. of Natural Resources. Further provides for the powers
of the commission.
Proposed law retains present law.
Proposed law authorizes an issuer, on behalf of the commission and at the direction of the
secretary, to issue bonds to raise funds to use for the authorized purposes of the commission.
Proposed law provides that the bonds may be secured by an irrevocable and dedication of
revenues consisting of the oilfield site restoration fees and penalties and any other revenue
to the extent appropriated, but shall not include site specific trust account monies. Such
pledge shall not constitute a pledge of the full faith and credit of the state.
Proposed law provides the bonds to be entitled to priorities on the revenues of the
commission as provided in a loan agreement, trust indenture, or other instrument.
Proposed law provides that when any bonds have been issued and secured in accordance
with proposed law, neither the commission, the department, the state, nor any other entity
may act to impair any obligation or contract for the benefit of the holders of the bonds or
discontinue or decrease any fee, rate, or other revenue in anticipation of the collection of
which the bonds have been issued until all of the bonds have been retired as to principal and
interest or irrevocable provision otherwise made for their complete redemption and payment
in principal, interest, and redemption premium, if any, and the complete payment of all
amounts due under the trust agreement pursuant to which the bonds are issued.
Proposed law provides for the validity of the pledge of revenues without physical delivery,
notice, or recordation.
Proposed law authorizes the secretary or undersecretary of the department to execute certain
agreements and documents necessary or desirable to carry out proposed law.
Proposed law authorizes the creation of funds or accounts for the revenues and proceeds of
the bonds and the pledged revenues and authorizes the collection and disbursement of
revenues in accordance with documents providing for the issuance of the bonds.
Proposed law authorizes the secretary to distribute revenue pursuant to proposed law to pay
principal, interest, and related costs in connection with the issuance of bonds.
Present law provides the funds in the Oilfield Site Restoration Fund shall not be available
to borrow. Proposed law provides the funds may be pledged in accordance with proposed
law.
Present law imposes oilfield site restoration fees as follows: 1-1/2¢ per barrel on oil and
condensate and up to 3/10ths of 1¢ per thousand cubic feet on gas. Present law additionally
provides for a reduced fee for reduced-rate production, such as stripper wells and incapable
wells, which is a proportional reduction based on the reduction from the full rate severance
tax.
Present law provides that oilfield site restoration fees shall not be collected once the
treasurer certifies the Oilfield Site Restoration Fund reaches or exceeds $10 million and shall
not again be collected until the fund has fallen below $6 million. The funds in site-specific
trust accounts are not counted in determining the balance of the fund for this purpose.
Proposed law retains present law except provides that the funds generated from proposed
law shall also not be counted in determining the balance of the fund with such limitation. HLS 11RS-291 ORIGINAL
HB NO. 212
Page 9 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Present law limits the liability or responsibility of the commission or the state to pay for site
restoration beyond the Oilfield Site Restoration Fund. Proposed law retains present law and
includes funds established from the issuance of bonds.
Effective July 1, 2011.
(Amends R.S. 30:82, 84(A)(1), 86(B), (C), and (E)(1), and 95(A); Adds R.S. 30:83(F)(2) and
83.1)