ENROLLED 2016 Regular Session HOUSE BILL NO. 902 BY REPRESENTATIVE LEOPOLD 1 AN ACT 2 To amend and reenact R.S. 56:423(A) and (B) and 429 and Sections 2(B) and (C) and 3 of 3 Act No. 808 of the 2008 Regular Session of the Legislature and to enact R.S. 4 56:425(F) and 427(F) and (G), relative to oyster leases; to provide for lifting the 5 moratorium on new oyster leases; to provide relative to liability under certain 6 circumstances; to provide relative to public notification and opportunity to protest 7 or withdraw oyster lease applications under certain circumstances; to eliminate 8 auction of rent-delinquent oyster leases; to provide certain terms, conditions, 9 procedures, and requirements; and to provide for related matters. 10 Be it enacted by the Legislature of Louisiana: 11 Section 1. R.S. 56:423(A) and (B) and 429 are hereby amended and reenacted and 12 R.S. 56:425(F) and 427(F) and (G) are hereby enacted to read as follows: 13 §423. Property rights, larceny or other public offenses concerning; leases heritable 14 and transferable; adjudication of claims 15 A. A lessee shall enjoy the exclusive use of the water bottoms leased and of 16 all oysters and cultch grown or placed thereon, subject to the restrictions and 17 regulations of this Subpart and Part II of Chapter 2 of Title 49 of the Louisiana 18 Revised Statues of 1950. 19 (1) This exclusive use of water bottoms is subordinate to the rights or 20 responsibilities of the state, any political subdivision of the state, the United States, 21 or any agency or agent thereof, to take any action in furtherance of coastal 22 protection, conservation, or restoration. For purposes of this Subpart, "coastal 23 protection, conservation, or restoration" means any project, plan, act, or activity for 24 the protection, conservation, restoration, enhancement, creation, preservation, Page 1 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 nourishment, maintenance, or management of the coast, coastal resources, coastal 2 wetlands, and barrier shorelines or islands, including but not limited to projects 3 authorized under any comprehensive coastal protection master plan or annual coastal 4 protection plan issued pursuant to Part II of Chapter 2 of Title 49 of the Louisiana 5 Revised Statutes of 1950 integrated coastal protection as defined in R.S. 49:214.2. 6 (2) This exclusive use of water bottoms for any oyster lease initially applied 7 for after July 1, 2016, or any renewal or judicial partition of such lease is also 8 subordinate to the rights of any person: 9 (a) To engage in any activity authorized by a coastal use permit, 10 determination, or coastal use authorization pursuant to R.S. 49:214.30 or a drilling 11 permit, for which the coastal use authorization or drilling permit application was 12 issued prior to the date the application for the oyster lease was issued. This 13 Subparagraph applies only in the following areas: 14 (i) The area from the centerline of the pipeline or area from the outside of the 15 well, platform, shell pad, or facility as designated by the coastal use permit, 16 determination, or other coastal use authorization pursuant to R.S. 49:214.30 or 17 drilling permit, or 18 (ii) If no such area delineated in Item (i) of this Subparagraph is designated, 19 then this Item applies in the following areas: 20 (aa) For a pipeline, within seventy-five feet from the centerline of the pipe. 21 (bb) For a well, platform, shell pad, or facility, within two hundred fifty feet 22 from the outside of the well, platform, shell pad, or facility. 23 (b) To operate, maintain, repair, replace, rehabilitate, or remove any pipeline, 24 well, platform, shell pad, or facility on or impacting an oyster lease in which the 25 pipeline, well, platform, shell pad, or facility was placed or constructed before 26 September 20, 1980, or was placed or constructed prior to the date the oyster lease 27 was issued. This Subparagraph applies only in the following areas: 28 (i) For a pipeline, within seventy-five feet from the centerline of the pipe. 29 (ii) For a well, platform, shell pad, or facility, within two hundred fifty feet 30 from the outside of the well, platform, shell pad, or facility. Page 2 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 (c) To cross an oyster lease to access any activity, pipeline, well, platform, 2 shell pad, or facility to which Subparagraph (2)(a) or (2)(b) of this Subsection 3 applies. This Subparagraph applies only to a single access channel across each oyster 4 lease per activity, pipeline, well, platform, shell pad, or facility, determined as 5 follows: 6 (i) For any activity, pipeline, well, platform, shell pad, or facility , including 7 the removal of any pipeline, well, platform, shell pad, or facility, to which 8 Subparagraph (2)(a) of this Subsection applies, if an access channel across each 9 oyster lease is identified in the coastal use authorization or permit, it shall be the sole 10 access channel for purposes of this Subparagraph. If more than one access channel 11 across each oyster lease is identified, the holder of the authorization or permit shall 12 designate a single access channel to the department in writing identifying the 13 centerline of the access channel using the North American Datum 1983 state plane 14 coordinates; and when the holder does so and the department consents to the 15 designated access channel in writing, it shall be the sole access channel for purposes 16 of this Item. 17 (ii) For any activity, pipeline, well, platform, shell pad, or facility to which 18 Subparagraph (2)(b) of this Subsection applies, the holder of the authorization or 19 permit shall designate a single access channel across each oyster lease to the 20 department in writing identifying its centerline using the North American Datum 21 1983 state plane coordinates; and when the holder does so and the department 22 consents to the designated access channel in writing, it shall be the sole access 23 channel for purposes of this Item. 24 (iii) This Subparagraph applies only within fifty feet from the centerline of 25 the access channel across each oyster lease. In addition, if a spoil area was 26 previously identified in an authorization or permit for an access channel designated 27 pursuant to this Item, this Item shall also apply to the same spoil area; however, such 28 spoil area shall be limited to eighty feet in width adjacent to one side of the access 29 channel. Page 3 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 (iv) The department shall be immune from any action or liability arising out 2 of or related to its consent or agreement to any access channel or spoil area 3 designated pursuant to this Subparagraph. 4 (v) The department shall consult with the lessee under any oyster lease 5 located within a proposed access channel, before consenting or agreeing to any 6 access channel pursuant to this Subparagraph. 7 (3) The provisions of Paragraph (2) of this Subsection shall not apply to any 8 oyster lease initially applied for before July 1, 2016, or any renewal or judicial 9 partition of such lease, or to any oyster lease issued pursuant to Section 2(B)(1) of 10 the Act that originated as House Bill No. 902 of the 2016 Regular Session or any 11 renewal of such lease. 12 B.(1) A lessee of oyster beds or grounds who has obtained, recorded, and 13 marked his lease in compliance with the law shall have the right to maintain an 14 action for damages against any person, partnership, corporation, or other entity 15 causing wrongful or negligent injury or damage to the beds or grounds under lease 16 to such lessee. 17 (a) However, no No lessee shall have any right to maintain any action 18 against the state, any political subdivision of the state, the United States, or any 19 agency, agent, contractor, or employee thereof for any claim arising from any 20 project, plan, act, or activity in relation to coastal protection, conservation, or 21 restoration integrated coastal protection, except as provided in R.S. 56:427.1. 22 (b) No lessee shall have any right to maintain any action against any person 23 arising from any activity to which R.S. 56:423(A)(2) applies provided that the person 24 has not violated any coastal use permit, determination, or other coastal use 25 authorization pursuant to R.S. 49:214.30, or drilling permit, or any Louisiana or 26 federal law or regulation applicable to the activity. 27 * * * 28 §425. Lease of water bottoms; stipulations; boundary disputes 29 * * * Page 4 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 F. The Coastal Protection and Restoration Authority shall determine areas 2 of the coast where buffer zones between oyster leases and the shoreline may be 3 necessary to protect sensitive and eroding coastal lands. The Coastal Protection and 4 Restoration Authority shall review each application for an oyster lease or renewal or 5 expansion of an oyster lease to determine if the water bottom applied for is located 6 in an area where a buffer zone may be necessary and shall delineate the extent of the 7 buffer zone necessary for each application. 8 * * * 9 §427. Initial application for lease 10 * * * 11 F. The secretary may not execute a lease until the department has posted 12 notice of the application for the lease on its website for ninety consecutive days. 13 (1) Any person claiming ownership of the water bottoms to be leased may 14 protest the issuance of the lease on the grounds that the protesting party owns the 15 water bottoms, but only by delivering via certified mail notice of the protest in 16 writing to the secretary, the administrator of the state land office, and the lease 17 applicant on or before the ninetieth day after notice of the application was posted. 18 The notice of protest shall include all information and documentation that the 19 protesting party believes is relevant to the question of ownership. The right to 20 protest issuance of the lease pursuant to this Subsection shall expire if a protest is not 21 made on or before the ninetieth day after notice of the application was posted. 22 (2) If a protest is timely made, the administrator of the state land office shall 23 review the state’s claim to ownership of the contested water bottoms and issue a 24 preliminary determination to the secretary, the protesting party, and the lease 25 applicant within ninety days of receiving the notice of protest, as to whether the state 26 claims ownership of the contested water bottoms. The administrator shall issue a 27 final written determination as to whether the state claims ownership of the water 28 bottom within one hundred eighty days of receiving the notice of protest. If a protest 29 is timely made, the secretary may execute the lease as otherwise authorized under 30 this Subpart only to the extent that the administrator of the state land office Page 5 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 determines that the state claims ownership of the contested water bottoms. The relief 2 available pursuant to and the results and effects of such a protest and determination 3 are limited to those set forth in this Subsection. The determination by the 4 administrator of the state land office shall not be reviewable under the 5 Administrative Procedure Act, and is appealable only to the Nineteenth Judicial 6 District Court. Any petition for judicial review of the determination pursuant to this 7 Subsection must be filed within sixty days after issuance of the determination. 8 Failure to make a protest pursuant to this Subsection has no effect on the right to 9 claim ownership of the leased water bottom authorized by R.S. 56:423(D) or the 10 reasonable investigation into the ownership of the water bottom by the state required 11 by R.S. 56:425(A). 12 (3) A lease applicant may withdraw a lease application and receive a full 13 refund from the department of all application fees, by submitting a written request 14 for withdrawal to the department within one hundred twenty days after the 15 department posts notice of the application on its website, within thirty days after 16 issuance of the determination of the administrator of the state land office regarding 17 the state’s claim to ownership pursuant to a protest authorized by this Subsection, or 18 within thirty days after final judgment in any proceeding for judicial review of the 19 determination, whichever is the later date. 20 G. The secretary shall not lease any water bottom located within seventy-five 21 feet of the centerline of a pipeline that is located on purchased right-of-way. 22 However, if the right-of-way is abandoned and returned to commerce, the secretary 23 may then lease such water bottom. 24 * * * 25 §429. Default in payment of rent; cancellation and forfeitures 26 The failure of the tenant lessee to pay the rent punctually on or before the 27 first of each January, or within thirty sixty days thereafter, ipso facto and without 28 demand or putting in default, terminates and cancels the lease and forfeits to the 29 department all the works, improvements, betterments, and oysters on the leased 30 water bottoms. The department may at once enter on the water bottoms and take Page 6 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 possession thereof. Such water bottoms shall then be open for lease in accordance 2 with R.S. 56:425 to the highest bidder. Ten days thereafter the department shall 3 enter the termination, cancellation, and forfeiture on its books and give public notice 4 thereof by publication in one local paper in the parish where the formerly leased 5 water bottoms are located. On or before the first day of each February, the 6 department shall issue a written notice of delinquency by certified mail to each lessee 7 who has not yet paid the rent. The department shall also publish notice of such 8 delinquency on its website and in the official journal of the parish in which the 9 delinquent lease is located. Any lessee who pays the rent on or after the first day of 10 February shall pay The department may waive the termination, cancellation, and 11 forfeiture, provided the rent due plus an additional ten percent penalty is paid at any 12 time before the water bottoms are leased to another person. 13 Section 2. Sections 2(B) and (C) of Act No. 808 of the 2008 Regular Session of the 14 Legislature are hereby amended and reenacted to read as follows: 15 Section 2. 16 * * * 17 B. Prior to the commencement of the phases contained in this Subsection, 18 the state land office shall make a determination of state ownership of all water 19 bottoms for all oyster lease applications submitted before the imposition of the 20 moratorium and the department shall act upon such applications as required by R.S. 21 56:427. The moratorium may not be lifted until the following preferential rights 22 have been claimed or forfeited: 23 (1) Phase One – Right of First Refusal for Non-Renewed Leases: 24 (a) Prior to lifting the moratorium, there shall be an examination of those 25 leases that were not renewed by the The Department of Wildlife and Fisheries shall 26 identify the leases that were not renewed since January 1, 1996, due to 27 recommendations from the Department of Natural Resources that such leases would 28 be in the operational or impact area of a planned coastal restoration integrated coastal 29 protection project, and those leases whose lessee voluntarily failed to renew the lease 30 between January 1, 1996, and October 19, 2004, and was a party to the class action Page 7 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 suit entitled Albert J. Avenal, Jr. et al. v. the State of Louisiana and the Department 2 of Natural Resources. The Department of Wildlife and Fisheries and the Department 3 of Natural Resources Coastal Protection and Restoration Authority shall cooperate 4 in the determination identification of these non-renewed leases those leases that are 5 eligible for a new lease for previously leased acreage under this phase of the 6 moratorium lifting. The lease holder lessee of record at the time the lease was not 7 renewed shall have the right of first right of refusal for a new lease for the previously 8 leased acreage under this phase of the moratorium lifting. Under the provisions of 9 R.S. 56:425, No lease may be granted under this phase unless the secretary of the 10 Department of Wildlife and Fisheries and the secretary of the Department of Natural 11 Resources shall executive director of the Coastal Protection and Restoration 12 Authority agree that issuing a new lease for previously leased acreage for such water 13 bottom is otherwise appropriate and the water bottom is not necessary for coastal 14 protection, conservation, or restoration integrated coastal protection. At a minimum, 15 the department shall advertise the availability of a new lease for previously leased 16 acreage on two separate days in the official journal of the parish where the acreage 17 is located. 18 (b) The Department of Wildlife and Fisheries shall post on its website for 19 sixty consecutive days a list of nonrenewed leases eligible for new leases under this 20 phase, together with notice of the right of first refusal for new leases for the 21 previously leased acreage and the deadline for applying for new leases under this 22 phase. The deadline for application shall be sixty days after notice is first posted. 23 If the lease holder lessee of record at the time the lease was not renewed does not 24 desire to be issued a new lease for previously leased acreage or fails to respond to the 25 notice of the availability of apply for a new lease for previously leased acreage 26 within these sixty days of the date of the last advertisement or notification, he shall 27 forfeit forfeits all rights to that lease. 28 (2) Phase Two - Incorporation of Adjacent Water Bottoms: 29 (a) A lessee may expand any lease existing as of January 1, 2016, under this 30 phase by amending the lease to incorporate immediately adjacent water bottom that Page 8 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 is not leased. Such expansion shall be limited to five hundred feet beyond the 2 existing lease boundary, and only toward previously existing Louisiana coastline as 3 shown on the last survey of the existing lease recorded with the department, existing 4 Louisiana coastline as of January 1, 2016 as shown in the 2015 U.S. Department of 5 Agriculture, Farm Service Agency, Aerial Photography Field Office, National 6 Agriculture Imagery Program 4 band aerial imagery for Louisiana, 1 meter resolution 7 (the "2015 NAIP imagery") located within one thousand feet of the existing lease 8 boundary, or another existing lease. No expansion is allowed toward another 9 existing lease as to the portions of the existing leases where there is more than five 10 hundred feet between them. As to the portions of the existing leases where there is 11 five hundred feet or less between them and the lessees under only two existing leases 12 apply to expand their leases into this area, the area shall be divided equally between 13 them. If the lessees under three or more existing leases apply to expand their leases 14 into this area, the lessees shall provide to the Department of Wildlife and Fisheries 15 a written agreement signed by each of them under authentic act agreeing to an 16 allocation of the area, and the area shall be divided among them in accordance with 17 this agreement. 18 (b) The Department of Wildlife and Fisheries shall post on its website for 19 one hundred eighty consecutive days notice of the availability of lease expansions 20 and the deadline for applying for expansions under this phase. The deadline for 21 application shall be one hundred eighty days after notice is first posted. If a lessee 22 does not apply for an expansion or if an agreement is not signed under authentic act 23 agreeing to allocation of expansions as provided in Subparagraph (a) of this 24 Paragraph of this phase within these one hundred eighty days, he forfeits all rights 25 to expansion under this phase. 26 (c) This phase of the moratorium lifting shall not begin before the time 27 period for applying for leases under Phase One has expired. 28 (d) The lease as amended pursuant to an expansion shall be treated as a 29 single existing lease, subject to all provisions of the existing lease including term; 30 except, solely for purposes of R.S. 56:423(A)(2) and (B)(1)(b), the lease shall be Page 9 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 considered to have been granted as to the expanded portion as of the date the 2 expansion is granted. 3 (3) Phase Three – Right of First Refusal for Lessees under Private Leases 4 (a) For any water bottom claimed by a private person that is under a private 5 oyster lease recorded in the public records of the parish where it is located by 6 February 1, 2016, the private lessee of that water bottom at the time of 7 implementation of Phase Three shall have the right of first refusal for a new state 8 lease on any water bottom claimed by the state within the area of the existing private 9 oyster lease under this phase. For purposes of this Paragraph, a “private oyster 10 lease” is one granted by a person other than the State of Louisiana. 11 (b) The Department of Wildlife and Fisheries shall post on its website for 12 sixty consecutive days notice of the right of first refusal for new state leases within 13 the area of private oyster leases and the deadline for applying for new state leases 14 under this phase. The deadline for application shall be sixty days after notice is first 15 posted. If a private lessee fails to apply for a state lease within these sixty days, he 16 forfeits all rights to a state lease under this phase. 17 (c) This phase of the moratorium lifting shall not begin before the time 18 periods for applying for leases or expansions under Phases One and Two have 19 expired. 20 (4) Phase Four – First Lottery for Appointments for New Leases: 21 (a) The Department of Wildlife and Fisheries shall establish a one-time 22 lottery system for submitting applications for new leases under this phase. The 23 department shall post on its website for sixty consecutive days notice of the lottery 24 and the deadline for entering the lottery. The deadline for submitting an entry shall 25 be sixty days after notice is first posted. Any person eligible for an oyster lease 26 under R.S. 56:425 may submit a single lottery entry for an appointment to apply for 27 a single lease under this phase. If any person fails to submit a lottery entry within 28 these sixty days, he forfeits all rights to a new lease under this phase. 29 (b) The Department of Wildlife and Fisheries shall randomly assign a 30 priority to all timely lottery entries, and shall schedule an appointment with each Page 10 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 lottery entry to receive a single application for leases during each appointment under 2 this phase in the order of this priority. Any lottery participant who fails to attend the 3 scheduled appointment shall be moved to the bottom of the priority list and his 4 appointment shall be rescheduled, but if he does not make the second scheduled 5 appointment, he forfeits all rights to a new lease under this phase. Any lottery 6 participant who fails to request a lease at his appointment forfeits all rights to a new 7 lease under this phase. 8 (c) This phase of the moratorium lifting shall not begin before all 9 applications for leases or expansions under the Phases One, Two, and Three have 10 been finally received by the department. Any water bottom for which there is a 11 pending application under Phases One, Two, or Three shall not be eligible for leasing 12 under Phase Four. 13 (5) Phase Five – Second Lottery for Appointments for New Leases: 14 (a) The Department of Wildlife and Fisheries may establish a second one- 15 time lottery system for submitting applications for new leases under this phase. If 16 the department establishes a second lottery, the department shall post on its website 17 for sixty consecutive days notice of the lottery and the deadline for entering the 18 lottery. The deadline for submitting an entry shall be sixty days after notice is first 19 posted. Any person eligible for an oyster lease under R.S. 56:425 may submit a 20 single lottery entry for an appointment to apply for a single lease under this phase. 21 If any person fails to submit a lottery entry within these sixty days, he forfeits all 22 rights to a new lease under this phase. 23 (b) The Department of Wildlife and Fisheries shall randomly assign a 24 priority to all timely lottery entries, and shall schedule an appointment with each 25 lottery entry to receive a single application for leases during each appointment under 26 this phase in the order of this priority. Any lottery participant who fails to attend the 27 scheduled appointment shall be moved to the bottom of the priority list and his 28 appointment shall be rescheduled, but if he does not make the second scheduled 29 appointment, he forfeits all rights to a new lease under this phase. Any lottery Page 11 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 participant who fails to request a lease at his appointment forfeits all rights to a new 2 lease under this phase. 3 (c) This phase of the moratorium lifting shall not begin before all 4 applications for leases or expansions under the Phases One, Two, Three, and Four 5 have been finally received by the department. Any water bottom for which there is 6 a pending application under Phases One, Two, Three, or Four shall not be eligible 7 for leasing under Phase Five. 8 (6) No lease or expansion may be granted under any phase of lifting the 9 moratorium required by this Act until all applications from prior phases have been 10 finally received by the department. In the event of multiple applications for the same 11 water bottoms within the same phase, the earlier-filed application shall have priority, 12 except as otherwise expressly provided in this Act. 13 (7) Except as otherwise expressly provided in this Act, all leasing of state 14 water bottoms for oyster production under this Act shall be in accordance with the 15 provisions of Subpart D of Part VII of Chapter 1 of Title 56 of the Louisiana Revised 16 Statutes of 1950. 17 C. Upon implementation of the provisions of this Act, the Louisiana Wildlife 18 and Fisheries Commission shall promulgate and implement rules necessary for the 19 final lifting of to lift the moratorium. Such rules shall be developed in conjunction 20 with a special committee composed of representatives from the Department of 21 Wildlife and Fisheries, the Department of Natural Resources, the Louisiana Oyster 22 Task Force, the Louisiana Landowner's Association, the Louisiana Oil and Gas 23 Association, and Louisiana Mid-Continent Oil and Gas Association and may include 24 offering lease holders the opportunity to expand their existing leases by 25 incorporation of immediately adjacent water bottom. Such expansion shall be limited 26 to five hundred feet beyond the existing lease boundary except in cases where there 27 is a lease held by another lease holder whose boundary line is less than five hundred 28 feet away. In those cases, the two lease holders may agree to divide the distance 29 equally or, if one lease holder declines to expand his lease, the other lease holder 30 may expand up to the boundary line of the other lease. The opportunity to expand Page 12 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions. HB NO. 902 ENROLLED 1 leases shall be provided for a limited period of time. The committee shall report 2 their recommendations to the Wildlife and Fisheries Commission prior to June 1, 3 2009. 4 * * * 5 Section 3. Section 3 of Act No. 808 of the 2008 Regular Session of the Legislature 6 is hereby amended and reenacted to read as follows: 7 Section 3. Once the oyster lease moratorium has been finally lifted by the 8 Louisiana Wildlife and Fisheries Commission, the provisions of Section 2 of this Act 9 shall cease to have effect, except the provisions of Section 2(B)(2)(d) of this Act 10 regarding designation of lease expansions as new or existing shall continue in full 11 force and effect; and except as provided in Section 2(B)(2)(d) of this Act, further 12 leasing of state water bottoms for oyster production shall be in accordance with the 13 provisions of Subpart D of Part VII of Chapter 1 of Title 56 of the Louisiana Revised 14 Statutes of 1950. 15 Section 4. This Act shall become effective on July 1, 2016, if and only if the 16 provisions of House Bill No. 1130 of the 2016 Regular Session are enacted into law. SPEAKER OF THE HOUSE OF REPRESENTATIVES PRESIDENT OF THE SENATE GOVERNOR OF THE STATE OF LOUISIANA APPROVED: Page 13 of 13 CODING: Words in struck through type are deletions from existing law; words underscored are additions.