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Regular Session, 2013
HOUSE CONCURRENT RESOLUTI ON NO. 73
BY REPRESENTATIVE HENRY BURNS
A CONCURRENT RESOLUTI ON
To urge and request the Louisiana Mineral Law Institute to study and make specific
recommendations relative to legislation to define "timely payment" of mineral
royalties and to establish parameters as to what constitutes "reasonable cause" for
untimely or nonpayment of mineral royalties.
WHEREAS, pursuant to R.S. 31:137, a mineral lessee is required to make timely and
proper payment of royalties; and
WHEREAS, present law provides remedies for a lessor who has not been paid timely
or properly, and present law also provides that the mineral lessee shall not be subject to
penalties, provided that the mineral lessee has reasonable cause for nonpayment; and
WHEREAS, the terms, "timely payment" and "reasonable cause" are not statutorily
defined, and no parameters have been provided by statutory law as to what constitutes timely
payment or what constitutes reasonable cause for failing to make timely payment; and
WHEREAS, House Bill No. 223 of the 2013 Regular Session was introduced to
define or provide some parameters as to what constitutes timely payment; and
WHEREAS, while most mineral lessees make a good faith effort to timely and
properly pay mineral royalties to their lessors, there are lessees who take advantage of the
lack of specificity in the law as to what constitutes timely payment, particularly when
dealing with mineral owners of small tracts of land and who are less knowledgeable of the
Mineral Code; and
WHEREAS, mineral lessees frequently raise the inability to complete property title
work as a reasonable cause for nonpayment; and
WHEREAS, since there is no statutory law establishing any time parameters in
which to complete such title work, it is most frequently raised as a reasonable cause for ENROLLEDHCR NO. 73
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nonpayment, and may at times be applied to all owners within a unit when it does not
necessarily affect the calculation of royalties to all owners within the unit; and
WHEREAS, some states with a very strong oil and gas industry, such as Oklahoma,
have enacted laws which are more specific when addressing the issues of timeliness of
royalty payments and marketability of title; and
WHEREAS, with the increased activity and complexity with oil and gas exploration
and production in Louisiana over the past several years, there is a growing need to amend
the laws relative to defining "timely payment" and as to what constitutes a "reasonable
cause" for late payment or nonpayment.
THEREFORE, BE IT RESOLVED that the Legislature of Louisiana does hereby
urge and request the Louisiana Mineral Law Institute to study and make specific
recommendations relative to legislation to define "timely payment" of mineral royalties and
to establish parameters as to what constitutes "reasonable cause" for untimely or nonpayment
of mineral royalties.
BE IT FURTHER RESOLVED that a suitable copy of this Resolution be transmitted
to Mr. Keith B. Hall, the director of the Louisiana Mineral Law Institute.
BE IT FURTHER RESOLVED the Louisiana Mineral Law Institute report its
findings and recommendations in the form of specific proposed legislation to the Legislature
of Louisiana on or before January 1, 2014.
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE