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Regular Session, 2012
HOUSE BILL NO. 1037
BY REPRESENTATIVE MONTOUCET
MINERALS/MINING: Provides for the Louisiana Land Owners Protection Act
AN ACT1
To enact Chapter 10 of Title 30 of the Louisiana Revised Statutes of 1950, to be comprised2
of R.S. 30:1001 through 1010, relative to oil and gas well operators; to provide for3
duties of oil and gas well operators; to provide for notice of operations and surface4
use and compensation agreement; to provide for entry without surface use5
compensation agreement; to provide for restriction on issuance of permits for wells;6
to provide for attorney fees and costs; to provide for emergency situations; and to7
provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. Chapter 10 of Title 30 of the Louisiana Revised Statutes of 1950,10
comprised of R.S. 30:1001 through 1010, is hereby enacted to read as follows:11
§1001. Short Title12
This Act shall be known and may be cited as the "Louisiana Land Owners'13
Protection Act".14
§1002. Definitions15
The following words and phrases when used in this Chapter shall have the16
following meanings unless the context clearly indicates otherwise:17
(1) "Department" means the Department of Natural Resources.18
(2) "Gas" means fluid, either combustible or noncombustible, which is19
produced in a natural state from the earth and which maintains a gaseous or rarified20 HLS 12RS-2196 ORIGINAL
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state at a standard temperature of sixty degrees Fahrenheit and a pressure of 14.71
PSIA, manufactured gas, byproduct gas, or any mixture of gases.2
(3) "Oil" or "petroleum" means hydrocarbons in liquid form at a standard3
temperature of sixty degrees Fahrenheit and a pressure of 14.7 PSIA.4
(4) "Oil or gas operations" or "operations" means activities affecting land or5
water sources, no matter how slight, that are associated with oil or gas exploration6
or production, including but not limited to:7
(a) Construction, installation, maintenance, or removal of oil or gas wells.8
(b) Construction, installation, maintenance, or removal of pipelines and9
equipment for gas, oil, or water.10
(c) Installation, maintenance, and removal of all access or service roads.11
(d) Installation, maintenance, or removal of oil or gas production or storage12
equipment and facilities.13
(e) Rework of oil and gas wells.14
(f) Plugging of oil or gas wells.15
(g) Actions taken to reclaim well sites.16
(h) Actions taken regarding road and pipeline rights-of-way.17
(5) "Operator" means a mineral lessee who performs its operations on the18
surface as a prudent, competent, and experienced operator, having in mind the best19
interests of the mineral lessor and surface owner.20
(6) "Person" means any natural person, association, partnership, corporation,21
political subdivision, or agency of the federal or state government or other legal22
entity.23
(7) "Prudent operator obligations" means mineral lessee obligations24
consisting of the following:25
(a) Obligation to perform the contract in good faith.26
(b) Obligation to develop and operate the leased property as a reasonably27
prudent operator for the mutual benefit of lessee and lessor.28 HLS 12RS-2196 ORIGINAL
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(c) Obligation to develop the known mineral producing formations in the1
manner of a reasonable, prudent operator.2
(d) Obligation to explore and test all portions of the leased premises after3
discovery of minerals in paying quantities in the manner of a reasonable, prudent4
operator.5
(e) Obligation to protect the leased property against drainage by wells6
located on neighboring property in the manner of a reasonable, prudent operator.7
(f) Obligation to produce and market minerals discovered and capable of8
production in paying quantities in the manner of a reasonable, prudent operator.9
(g) Obligation of the lessee to restore the surface of the leased premises on10
completion of operations where there is evidence of unreasonable or excessive use11
of the surface.12
(8) "Reclaim" means to restore any portion of land affected by oil or gas13
operations to the same or substantially similar condition that existed prior to oil or14
gas operations, or as otherwise agreed to in a memorialized agreement between the15
operator and the landowner or tenants.16
(9) "Surface" means the uppermost portion of the earth's crust, including17
land and aquatic features.18
(10) "Surface owner" means a person who holds legal or equitable title to the19
surface of a parcel of real property.20
(11) "Surface use and compensation agreement" means an agreement21
written, signed, and notarized between a surface owner and an operator stipulating22
the location of proposed oil or gas wells, access roads, and any other uses of the23
surface during oil or gas exploration and production. An oil or gas operation lease24
agreement entered into by a surface owner and an operator shall be deemed a surface25
use and compensation agreement for the purposes of this Chapter.26
(12) "Tenant" means a person who occupies a parcel of real property27
belonging to the surface owner in subordination to the surface owner's title and with28
the surface owner's assent, expressed or implied.29 HLS 12RS-2196 ORIGINAL
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(13) "Water sources" means rivers, streams, creeks, rivulets, impoundments,1
ditches, water courses, storm sewers, lakes, dammed water, ponds, springs, or all2
other bodies of surface water, or parts thereof, whether natural or artificial, within3
or on the boundaries of the surface owner.4
(14) "Well" means a borehole drilled or being drilled for the purpose of or5
to be used for producing, extracting, or injecting any gas, petroleum or other liquid6
related to oil or gas production or storage, including brine disposal, CO27
sequestration, but excluding boreholes drilled to produce potable water to be used8
as such. The term does not include a borehole drilled or being drilled for the purpose9
of or to be used for systems of monitoring, producing, or extracting gas from solid10
waste disposal facilities, as long as the wells are subject to the rules and regulations11
of the Department of Environmental Quality.12
§1003. Construction13
The provisions of this Chapter shall not affect the continued existence and14
operation of any provision of the Mineral Code or provisions governing oilfield site15
trust accounts and site-specific trust accounts, including but not limited to R.S.16
30:88, providing for oilfield trust accounts; R.S. 31:11, providing for the correlative17
rights of a landowner and a owner of a mineral right and between owners of mineral18
rights; R.S. 31:22, providing for the rights and obligations of a mineral servitude19
owner; R.S. 31:122, providing for a lessee's obligation to act as a reasonably prudent20
operator; and R.S.31:196, providing for the obligations of a naked owner arising21
from enjoyment of rights in minerals.22
§1004. Duties of operators23
A. Except to the extent otherwise provided in a surface use and24
compensation agreement duly executed by a surface owner and an operator, an25
operator shall:26
(1) Compensate fully the surface owner for damages resulting in any27
diminution in value of the real property and any real estate upon the tract, including28
but not limited to:29 HLS 12RS-2196 ORIGINAL
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(a) Lost agricultural production and income.1
(b) Lost timber production.2
(c) Lost land value.3
(d) Lost use of and access to the surface owner's land or water sources.4
(e) Lost value of property improvements caused by operations.5
(2) Reclaim entirely the surface affected by oil or gas operations within nine6
months of the cessation of extracting oil or gas from any well on a surface owner's7
tract of land.8
B. An operator shall not be responsible for negotiating or allocating9
compensation between the surface owner and any tenant, except that an operator10
shall compensate fully any tenant of the surface owner for any diminution in value11
of leasehold improvements, made by said tenant, damaged as a result of the12
operator's oil or gas operations.13
C. The operator shall file with the department proof that the operator has14
public liability insurance coverage in an amount not less than two million dollars in15
the aggregate and five hundred thousand dollars per occurrence for damages to16
persons and property caused by its operations.17
D. Notwithstanding any provision of this Chapter to the contrary, the18
operator shall use only so much of the surface land as is reasonably necessary in19
order to construct, maintain, and operate any facility necessary for completion of and20
production resulting from the drilling conducted in accordance with the surface use21
and compensation agreement and the operator shall utilize the best available22
technology, including directional drilling, so as to minimize interference with the23
ongoing or planned usage of the surface by the landowner.24
§1005. Notice of operations and surface use and compensation agreement25
A. No less than thirty days prior to initial entry upon a tract of land for26
activities that will not disturb the surface, including inspections, staking, surveys,27
measurements, and general evaluations of proposed routes and sites for oil or gas28
operations, an operator shall provide notice by certified mail to the surface owner of29 HLS 12RS-2196 ORIGINAL
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each tract on which the operator proposes activity as well as a statement citing deeds,1
leases, rights-of-way, easements, and other rights relating to the right of access of the2
operator to the tract of land.3
B. Prior to submission of an application for a permit to the department, and4
no less than thirty days before entering the surface of the land to conduct any oil or5
gas operations, an operator shall, by certified mail, provide the surface owner with6
notice of the planned operations. Copies of the notice shall also be sent to surface7
owners within a one-half mile radius of each proposed well site. The notice shall8
include:9
(1) Sufficient disclosure of the planned operations, including topographical10
maps of the relevant areas, permits, and materials submitted by the operator to obtain11
permits to enable the surface owner to evaluate the effects the operations might have12
on the lands of the surface owner.13
(2) A copy of the Louisiana Land Owners' Protection Act and a copy of the14
Mineral Code.15
(3) The name, address, telephone number and, if available, facsimile number16
and electronic mail address of the operator and the authorized representative of the17
operator.18
(4) Information regarding required or recommended predrilling surveys and19
other provisions relating to:20
(a) Protection of water sources.21
(b) Well location restrictions.22
(c) Casing, cementing, and plugging plans for wells and production-related23
horizontal boreholes under the rules and regulations of the department.24
(5) A proposed surface use and compensation agreement addressing, to the25
extent known, the following:26
(a) Placement, specifications, maintenance, and design of well pads,27
gathering pipelines, water pipelines, storage facilities for water, oil, or gas,28
compressor stations, pump stations, meter pits, and roads to be constructed and other29 HLS 12RS-2196 ORIGINAL
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facilities of every type to be constructed and utilized either temporarily or1
permanently for operations.2
(b) The proposed frequency of ingress and egress across or under the surface3
of the land for operations, including pipelines, and the routes for the same.4
(c) Construction, maintenance, and placement of pits used or planned for5
operations.6
(d) Use and impoundment of water on the surface of the land.7
(e) Restoration of the property existing prior to commencement of any8
operations on areas to be impacted by those operations.9
(f) Surface water drainage changes.10
(g) Plans and actions to limit and effectively control precipitation runoff,11
sedimentation, and erosion.12
(h) Control and management of noise, weeds, dust, traffic, trespass, litter,13
and other interferences with the use and enjoyment of the surface by the surface14
owner or tenant.15
(i) Interim and final proposals to reclaim the surface.16
(j) Plans or actions to be undertaken to minimize damages to the surface.17
(k) Operator indemnification for injury to persons or properties other than18
that of the surface owner when caused by the operations.19
(l) Efforts to restrict access to the land of the surface owner by third parties20
utilizing the access roads and rights-of-way of the operator.21
(m) An offer of compensation for damages to the surface affected by22
operations.23
(6) A plat that shows:24
(a) The tract of land upon which each well is to be located.25
(b) The name of the surface landowner of record and lessor, if any.26
(c) The name of all surface landowners or water purveyors whose water27
supplies are within one-half mile of the proposed well location.28
(d) The location of water sources.29 HLS 12RS-2196 ORIGINAL
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(e) Placement of well pads, gathering pipelines, water pipelines, storage1
facilities for oil, gas, or water, compressor stations, meter pits, and pump stations and2
roads to be constructed for oil and gas operations.3
(f) Placement of pits and equipment used or planned, and use and4
impoundment of water on the surface of the land.5
(g) The acreage in the tract to be drilled.6
(h) The proposed location of each well determined by survey.7
(i) The courses and distances of the proposed well locations from two or8
more permanent identifiable points or landmarks on the tract boundary corners.9
(j) The number or other identification to be given to the wells.10
C. The notices required under this Section shall be sent to the surface owner11
at the address shown by the property tax records at the time the notice is given. If12
the property tax records for the parish or the conveyance records in the clerk of13
court's office for the parish where the property is located disclose that legal and14
equitable title of the land are not held by the same person, notice shall be given to15
both the holder of the legal title and to the holder of the equitable title at the16
addresses shown by the property tax records at the time the notice is given.17
D. Upon receipt of the notice required under Subsection B of this Section,18
the surface owner may do either of the following:19
(1) Agree to the proposed surface use and compensation agreement within20
thirty days of receipt.21
(2) Reject the proposed surface use and compensation agreement and enter22
into a mutually acceptable surface use and compensation agreement that sets forth23
the rights and obligations of the parties. As long as the surface use and24
compensation agreement negotiations between the surface owner and the mineral25
lessee is actively being pursued in good faith, prescription of the minerals will not26
be subject to expiration.27
E. Notices to the surface owners required under this Section shall be deemed28
to have been received fifteen days after mailing by certified mail.29 HLS 12RS-2196 ORIGINAL
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§1006. Entry without surface use and compensation agreement1
A. If, after thirty days from the date on which a surface owner receives2
notice under R.S. 30:1004(B), no surface use and compensation agreement has been3
executed by the operator and surface owner, the operator may file applications for4
permits with the department for the oil or gas wells proposed to be located on the5
surface owner's property after depositing a surety bond, letter of credit from a6
banking institution, cash, certificate of deposit with a Louisiana surety company or7
financial institution or financial institutions, or executing a site-specific trust account8
for the benefit of a surface owner in an amount equal to the greater of the following:9
(1) One hundred twenty percent of the operator's best compensation offer as10
to each oil or gas production facility's location.11
(2) Two hundred fifty thousand dollars per production facility location.12
B. The surety bond, letter of credit, cash, or certificate of deposit shall only13
be released by the surety company or financial institution back to the operator if any14
of the follow occur:15
(1) The surface owner provides an affidavit that compensation for use of and16
damages to the surface owner's land have been paid in full to the surface owner.17
(2) The surface owner and the operator have executed a surface use and18
compensation agreement or otherwise agreed the surety should be released.19
(3) There has been a final resolution of the judicial appeal in any action for20
damages brought by the surface owner and any awarded damages have been paid.21
(4) All wells on the land of the surface owner have been plugged and22
abandoned in accordance with law, and the operator has not conducted oil or gas23
operations on the property of the surface owner for a period of four years.24
§1007. Restriction on issuance of permits for wells25
The department shall not issue new permits or renew existing permits for26
wells where an operator is not complying with the terms of this Chapter. The27
department may resume issuing permits to the operator only when the operator28
demonstrates to the department it is in compliance with this Act.29 HLS 12RS-2196 ORIGINAL
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§1008. Attorney fees and costs1
A. In an action brought under this Chapter, if a court finds that compensation2
is owed under R.S. 30:1003, the court may also award the prevailing party attorney3
fees and costs if any of the following occurred:4
(1) The operator conducted operations without providing notice as required5
under R.S. 30:1004(B).6
(2) The operator conducted operations without a surface use and7
compensation agreement and before either depositing or maintaining a bond or other8
surety as required under R.S. 30:1005.9
(3) The operator conducted operations outside the scope of a surface use and10
compensation agreement and, when entering into the agreement, knew or should11
have known that operations would be conducted outside the scope of the agreement.12
(4) The surface owner failed to exercise good faith in complying with the13
provisions of this Act or the terms of a surface use and compensation agreement.14
B. In an action brought under this Chapter, if a court finds that compensation15
is owed under R.S. 30:1003, the court may also award the prevailing party attorney16
fees, costs, and treble damages if the court finds, by clear and convincing evidence,17
that any of the following occurred:18
(1) The operator willfully and knowingly entered upon the premises for the19
purpose of commencing the drilling of a well without giving notice as required under20
R.S. 30:1004(B) or without a surface use and compensation agreement with the21
surface owner and before depositing a bond or other surety under R.S. 30:1005.22
(2) Either the surface owner or the operator willfully and knowingly violated23
the terms of a surface use and compensation agreement between them.24
§1009. Remedies not exclusive25
The remedies provided for by this Chapter are not exclusive and do not26
preclude a person from utilizing any other remedies allowed by statute, common law,27
deed, or contract.28 HLS 12RS-2196 ORIGINAL
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§1010. Emergency situations1
Notwithstanding any provision of this Chapter to the contrary, no notice,2
surface use and compensation agreement, or bond shall be required in emergency3
situations for activities determined by the department to be necessary to protect4
public health and safety or the environment.5
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)]
Montoucet HB No. 1037
Abstract: Creates the Louisiana Land Owners Protection Act.
Proposed law provides for definitions.
Proposed law provides that proposed law shall not affect the continued existence and
operation of any provision of the Mineral Code or provisions governing oilfield site trust
accounts and site-specific trust accounts.
Proposed law provides that in absence of an agreement between the operator and the surface
owner, the operator shall fully compensate the surface owner for damages and reclaim the
affected surface within nine months of cessation of operations.
Proposed law requires the operator to compensate any tenant of the surface owner for
damages as a result of the operations.
Proposed law requires the operator to notify the surface owner by certified mail 30 days
prior to initial entry.
Proposed law requires the operator to notify the surface owner and owners within 1.5 mile
radius of planned operations by certified mail 30 days prior to initial entry and submission
of an application to the department.
Proposed law requires the notice shall include operation plans, a copy of proposed law and
the Mineral Code, the operator's contact information, predrilling surveys, a proposed surface
use and compensation agreement, and an area plat.
Proposed law provides that the proposed surface use and compensation agreement
addressing, to the extent known, the specifications of the drilling operation; the proposed
frequency of ingress and egress; the construction, maintenance, and placement of pits to be
used; the use and impoundment of water; restoration of the property existing prior to
operations; surface water drainage changes; the control of precipitation runoff,
sedimentation, and erosion; the control and management of noise, weeds, dust, traffic,
trespass, litter; interim and final proposals to reclaim the surface; plans or actions to be
undertaken to minimize damages to the surface; indemnification for injury to persons or
properties; efforts to restrict access; and an offer of compensation for damages to the surface.
Proposed law provides that upon receipt of the notice, the surface owner may agree or reject
the proposed surface use compensation agreement within 45 days. HLS 12RS-2196 ORIGINAL
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Proposed law if the surface owner has not agreed after 30 days, the operator may enter after
posting a bond or letter of credit or creating a site-specific trust account for the highest
compensation offered, or $250,000, whichever is greater.
Proposed law prohibits the department from renewing a permit without compliance with
proposed law.
Proposed law authorizes the award of attorney fees and costs if the operator fails to provide
notice, providing the required surety, or exceeds the scope of the surface use and
compensation agreement, or if the surface owner fails to exercise good faith in complying
with the surface use and compensation agreement.
Proposed law provides that no notice, surface use and compensation agreement, or bond
shall be required in emergency situations for activities determined by the department to be
necessary to protect public health and safety or the environment.
(Adds R.S. 30:1001-1010)