RDCSB427 375 4610
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)]
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 for the following
exceptions from the reasonable bond with security requirement:
(1) Wells exempt prior to September 1, 2015, that remain with the operator of record as
of that date.
(2) Wells utilizing plugging credits pursuant to proposed law.
(3) Wells exempt pursuant to proposed law in House Bill 632 of the 2016 R.S.
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); 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
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1. Makes legislative bureau note technical changes.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Natural Resources and
Environment to the reengrossed bill:
1. Remove requirement for the commissioner to make rules, regulations, and orders
that are necessary to require the plugging of each dry or abandoned well and to
perform site cleanup that were to include provisions for inactive wells classified
as future utility.
2. Add exceptions from the reasonable bond with security requirement for wells
exempt prior to September 1, 2015, that remain with the operator of record as of
that date, wells utilizing plugging credits, and wells exempt pursuant to proposed
law in House Bill 632 of the 2016 R.S.
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