RÉSUMÉ DIGEST
ACT 403 (SB 242) 2019 Regular Session Allain
New 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.
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.
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))