The legislative instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Alan Miller.
CONFERENCE COMMITTEE REP ORT DIGEST
SB 242 2019 Regular Session Allain
Keyword and summary of the bill as proposed by the Conference Committee
MINERALS. Provides for a continuing security interest clause in mineral leases. (8/1/19)
Report adopts House amendments to:
1. Remove the provision that made the bill applicable to leases that are subsequently
assigned, amended, or modified by agreement of the parties after July 31, 2019.
2. Allow the State Mineral and Energy Board to subordinate a certain amount of the
state's continuing security interest.
Report rejects House amendments which would have:
1. Required the Senate Committee on Natural Resources and the House Committee on
Natural Resources and Environment to approve the continuing security interest
clause in a mineral lease.
Report amends the bill to:
1. Require the board to submit the proposed clause language to the House Committee
on Natural Resources and Environment and the Senate Committee on Natural
Resources for review, no less than thirty days prior to entering into the first lease that
contains a clause granting a continuing security interest.
Digest of the bill as proposed by the Conference Committee
Proposed law authorizes the State Mineral and Energy Board (board) to include in any lease entered
into by the state, any state agency, or any political subdivision after July 31, 2019, a clause which
grants a continuing security interest in and to all as-extracted collateral attributable to, produced, or
to be produced, from the leased premises or from lands pooled or unitized therewith, as security for
the prompt and complete payment and performance of the lessee's obligation to pay royalties or other
sums of money that may become due under the lease, as contemplated by the Uniform Commercial Code.
Proposed law allows the board to subordinate the state's security interest in any amounts in excess
of the royalties and other sums due to the state, to the security interest of one or more lenders.
Proposed law requires the board to submit the proposed clause language to the House Committee
on Natural Resources and Environment and the Senate Committee on Natural Resources for review,
no less than thirty days prior to entering into the first lease that contains a clause granting a
continuing security interest.
Effective August 1, 2019.
(Adds R.S. 30:127(H))