The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Alan Miller.
DIGEST
SB 427 Reengrossed 2016 Regular Session Allain
Proposed law authorizes transferrable plugging credits in lieu of the bond with security required by
present law in order to promote the plugging of orphaned oilfield sites and oilfield sites that have
been inactive for at least five years. A plugging credit shall be issued for the plugging of orphaned
oilfield sites and oilfield sites that have been inactive for at least five years, with the specific
requirements and procedures for issuance, transfer, and acceptance of such credits to be developed
by the commissioner.
Proposed law requires that the regulations will provide criteria under which plugging credits may
be earned, and approval by the commissioner for the earning, using, banking, or selling of the
plugging credits.
Present law grants the commissioner the discretionary authority to require reasonable bond with
security for the performance of the duty to plug wells and to perform site cleanup.
Proposed law repeals present law.
Proposed law requires the commissioner to make, after notice and public hearings as provided in
present law, any rules, regulations, and orders that are necessary to require reasonable bond with
security for the performance of the duty to plug each dry or abandoned well and to perform the site
cleanup required by proposed law. The rules, regulations, and orders may classify based on location
of well and shall not provide any exception from the reasonable bond with security requirement, but
may allow for the use of plugging credits.
Proposed law requires the commissioner to make, after notice and public hearings as provided in
present law, any rules, regulations, and orders that are necessary to require the plugging of each dry
or abandoned well and to perform site cleanup. The rules, regulations, and orders shall include but
not be limited to the following:
(1)Inactive wells classified as having future utility must be plugged within five years of being
classified as inactive, be returned to a producing oilfield site as defined in present law, or pay
the annual assessment as provided by rule.
(2)Inactive wells classified as having no future utility must be plugged within 90 days of being
classified as inactive.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 30:4(C)(1)(a)(i), (ii), (iii) and (iv); adds R.S. 30:4(R) and (S); repeals R.S. 30:4(C)(1)(a)(v))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Natural Resources to the
original bill
1. Technical changes.
2. Adds provision that operators of inactive wells classified as having future utility may
pay an annual assessment in lieu of plugging the well or returning it to a producing
site.
3. Deletes provision requiring financial security on all inactive wells, even if no
financial security was previously required.
Senate Floor Amendments to engrossed bill
1. Makes legislative bureau note technical changes.