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)]
HB 571 Original 2023 Regular Session Schexnayder
Abstract: Provides relative to the regulation of carbon capture and sequestration.
NOTICE REQUIREMENTS
Present law provides procedures for notice and hearings by the office of conservation.
Proposed law retains present law and adds that the commissioner must notify the chief executive
officer of the parish of completed applications for Class V or Class VI well permits related to the
geologic sequestration of carbon dioxide at the same time that notice is required to be published and
that such notice may be by email.
Present law imposes requirements on the State Mineral and Energy Board to enter into operating
agreements for the storage of carbon dioxide, including a public hearing in the affected parish.
Proposed law adds a requirement that the chief executive officer of any affected parish be given
notice, which may be made by email, requires that a hearing be held in each parish affected, and
provides that the assistant secretary for the office of mineral resources may appoint a hearing officer
to conduct the required public hearings.
Present law gives the La. Dept. of Wildlife and Fisheries authority to regulate geophysical
and geological surveys.
Proposed law requires an applicant seeking to conduct geophysical and geological surveys
related to exploration for carbon dioxide sequestration to notify the chief executive officer of any
parish where the proposed surveys would occur in accordance with rules promulgated
by the department.
DISTRIBUTION OF FUNDS
Proposed law provides for the following allocation of funds collected by the office of mineral
resources from any contractual agreements for the storage of carbon dioxide on state-owned lands
or water bottoms:
(1)30% will be remitted to the Mineral and Energy Operation Fund.
(2)30% will be remitted to parishes included in the agreement. If one or more parishes is included in the agreement, the 30% will be divided based on the amount of land
in each parish included in the agreement.
(3)The remaining funds will be deposited into the state general fund.
LIABILITY
Present law allows a storage facility operator to apply for a certificate of completion of injection
operations 10 years after injection into a storage facility has ceased, or any other
time frame established by rule.
Proposed law changes the time period from 10 years to 50 years, or any other time frame established
by rule, after the injection has ceased for a storage operator to apply for a certificate of completion
of injection operations.
Proposed law provides for additional criteria the storage operator shall meet to receive the certificate
of completion of injection operations.
Present law provides that upon issuance of the certificate of completion of injection operations, all
generators of any injected carbon dioxide, owners of carbon dioxide stored in the storage facility,
and all owners otherwise having any interest in the storage facility, will be released from any and all
duties or obligations under present law and any and all liability associated with or related to that
storage facility which arises after the issuance of the certificate of completion of injection operations.
Proposed law adds that the release from the duties or obligations from proposed law will not apply
to a current or former owner or operator of a storage facility when the duties or obligations arise from
the owner or operator's non-compliance with applicable underground injection control regulations
prior to issuance of the certificate of completion of injection operations.
Proposed law requires the commissioner to implement provisions of present law and proposed law
in accordance with the federal Safe Drinking Water Act.
CARBON DIOXIDE GEOLOGIC STORAGE TRUST FUND
Present law establishes the Carbon Dioxide Geologic Storage Trust Fund and provides for
fees to be collected by the commissioner for deposit into the fund.
Present law authorizes the commissioner to levy a fee on each storage operator based on a
rate of tonnage injected over a minimum of 144 months. Present law further provides that
fee assessments will be suspended once the balance of the fund associated with that storage
operator has reached $5 million and will be resumed if the balance of the fund falls below
$4 million.
Proposed law authorizes the commissioner to levy the fee under present law on each storage
facility, rather than each storage operator, where payments will be suspended once $5 million has been paid by each facility and resumed if the balance associated with that facility
falls below $4 million.
Proposed law further provides that, regardless of the total number of storage facilities owned
or operated by the storage operator, a storage operator's payments will be suspended when
they have contributed a total of $10 million and that the commissioner must resume collecting the
fee if the balance of the fund attributable to that operator has fallen below $8 million.
Present law provides purposes for which the fund shall be used, including remediation of mechanical
problems with wells and surface infrastructure.
Proposed law retains the purposes provided under present law and adds remediation associated with,
arising from, or related to the site, including property remediation.
Proposed law further provides that no additional uses of the fund may be added to proposed law
purposes without a 2/3 vote of the elected members of each house of the legislature.
Present law authorizes the commissioner to spend money in the fund for specified purposes,
including remediation of mechanical problems with wells and surface infrastructure.
Proposed law retains the purposes provided under present law and adds remediation associated with,
arising from, or related to the site, including property remediation.
RECORDATION
Present law preserves the rights and obligations established in certain instruments related to
immovable property against third parties if the instrument is filed in the appropriate mortgage or
conveyance records.
Proposed law retains present law and provides the same protection to the rights and obligations in
agreements for the geologic storage of carbon dioxide upon filing a notice thereof.
Proposed law requires certain information to be contained in the notice. Proposed law further
requires the grantee to notify the chief executive officer in the parish in which the notice is recorded
within 30 days after recordation and authorizes the notice to be made by email.
EXTRACTION TAX
Proposed law creates a carbon extraction tax at a rate of 20 cents per ton extracted when the
extraction occurs subsequent to the storage of carbon dioxide pursuant to the La. Geologic
Sequestration of Carbon Dioxide Act.
Proposed law remits 75% to the governing authority of the parish in which the extracted occurs.
Further provides that if the storage facility is located in more than one parish, the revenue will be
divided between the parishes based on the amount of property located in each parish. Proposed law provides that the tax will become effective if and when the Dept. of Natural Resources
promulgates rules for the extraction of carbon dioxide which was stored in accordance with the La.
Geologic Sequestration of Carbon Dioxide Act.
All other provisions are effective upon signature of governor or lapse of time for gubernatorial
action.
(Amends the heading of Subpart A-3 of Part II of Chapter 2 of Subtitle I of Title 30, R.S.
30:209(4)(e)(intro. para.), 1109(A), 1110(C)(introductory paragraph) and (1)(intro. para.) and (f) and
(g), (E)(2), (F), (G)(3), and (H); Adds R.S. 30:6(H) and 149, the heading of Subpart A-4 of Part II
of Chapter 2 of Subtitle I of Title 30, R.S. 30:209.2, 1109(G), 1110(C)(1)(h) and (I), and 1112, R.S.
47:651, and R.S. 56:30.5)