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)]
HB 785 Original 2015 Regular Session Montoucet
Abstract: Authorizes the issuance of bonds secured by revenue deposited into the Oilfield Site
Restoration Fund and increases the fees on oil and gas production deposited into that fund.
Present law establishes the Oilfield Site Restoration Fund (Fund) into which are placed fees collected
on oil and gas production in the state, contributions, interest earned on the monies in the Fund, civil
penalties, or costs recovered from responsible parties to oilfield site restoration, grants and
donations, and site-specific trust accounts. Authorizes use of the monies in the Fund for oilfield site
restoration or assessment conducted by the Dept. of Natural Resources for administration of the
oilfield site restoration program.
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 pledge 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: 1½¢ per barrel on oil and condensate
and up to 3/10ths of 1¢ per 1,000 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.
Proposed law increases the fee from 1½¢ to 3¢ per barrel of oil and condensate and from 3/10th of
1¢ to 3/5th of 1¢ per 1,000 cubic feet of gas.
Present law suspends collections of the fee upon certification by the treasurer that the Fund balance
equals or exceeds $10 million. Collections of the fee resume upon certification that the Fund balance
is 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 increases the Fund balances necessary to suspend or resume fee collections from $10
million to $20 million to suspend and from $6 million to $12 million to resume and provides that
the funds generated from proposed law shall also not be counted in determining the balance of the
Fund with such limitation.
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.
(Amends R.S. 30:82, 84(A)(1), 86(B), (C), and (E)(1), 87(A), (B), (E), and (F)(1), and 95(A); Adds
R.S. 30:83(F)(2) and 83.1)