2020 Louisiana Laws
Revised Statutes
Title 30 - Minerals, Oil, and Gas and Environmental Quality
§136. Funds, disposition and appropriation of; penalties
RS 136 - Funds, disposition and appropriation of; penalties
A.(1)(a) All bonuses, rentals, royalties, shut-in payments, or other sums payable to the state as the lessor under the terms of valid existing mineral leases entered into under this Subpart or previously granted by the state and under the supervision of the board or from leases hereafter granted shall be paid to the office of mineral resources, by check or electronic wire transfers only, and all such payments if made payable to the register of the state land office as previously required, may be endorsed and otherwise processed by the secretary of the Department of Natural Resources pursuant to his general authority in regard to the functions of that office as provided in R.S. 36:921 through R.S. 36:926. A payor of royalty whose total monthly payment is fifty thousand dollars or more shall pay the royalty payment by electronic wire transfer.
(b) The office of mineral resources shall maintain a log in which shall be noted the date, time, and payor of each payment and the nature thereof, whether check or electronic wire transfer, so that the board may determine whether such payment was correct, sufficient, and timely made. The board shall then transmit these payments by electronic transfer, or hand-carry these payments, on the day received, to the state treasurer. If the board cannot make such determination promptly, it shall nevertheless transmit these payments by electronic transfer, or hand-carry these payments, on the day received, to the state treasurer and request the treasurer to place such funds as are being reviewed by the board under this Section in a suspense account until such time as the board makes the determination herein required and notifies the state treasurer of the disposition to be made by them. If the payor attributable to a lease unit well (LUW) code changes between monthly payment dates without notification to the office of mineral resources of the change and with submission of the current mailing address, telephone number, and email address for the new payor prior to the next month's payment, the new payor shall be subject to a liquidated damage penalty of one thousand dollars. The State Mineral and Energy Board shall have authority to waive all or any part of said damages based on a consideration of all factors bearing on the issue.
(c) The immediate acceptance of such payments shall not prejudice either the right of the state as lessor or the rights of the state's lessee or lessees as provided under the terms of the validly existing mineral leases. A lessee, operator, or other person directly involved in developing, producing, transporting, purchasing, or selling oil, gas, or other minerals from state leases shall establish, maintain, and make available for inspection by office of mineral resources auditors any information that is reasonably relevant to the computation of royalties, and upon the request by any such auditor, the appropriate records, reports, or information shall be made available for duplication.
(2) Overpayments or underpayments of sums other than bonuses, rentals, or shut-in payments, may be corrected in the following manner: An underpayment will be made up at a later date upon proper notification by the board to the lessee, and overpayments may be offset, compensated for, or recovered from royalty thereafter accruing to the state of Louisiana as authorized under the provisions of R.S. 30:137 and R.S. 30:138. The board may adopt rules in accordance with the Administrative Procedure Act providing for the assessment of fees to recover the costs associated with the processing of requests submitted by lessees or royalty payors for the reimbursement of overpayments. The failure or delay of the board to take any action or perform any function with respect to any payment shall not affect the validity of any payment made or tendered.
(3) The board shall implement procedures requiring that all mineral leases executed by or for the state on or after July 26, 1990* include provisions requiring the timely payment of all bonuses, rentals, royalties, shut-in payments, or other sums payable to the state as lessor.
B.(1) Any form required by the Department of Natural Resources or the office of mineral resources to be filed in conjunction with the payment of any sum, other than bonuses, rentals, or shut-in payments, which has been incorrectly completed in any part, and which error results in the inability of any agency or subdivision thereof to carry out any of its statutory or regulatory duties in a timely manner, unless corrected in full prior to the payment due date, shall render the royalty pay or subject to a penalty of five percent of the total sum due or paid, not to exceed five hundred dollars, as liquidated damages. The whole or any part of the damages provided for in this Paragraph may be waived by the State Mineral and Energy Board and said damages shall, as with any and all liquidated damages assessed and collected by the State Mineral and Energy Board in accordance with any statutory or contractual provision, be deemed self-generated funds to be deposited into the Mineral and Energy Operation Fund.
(2) The failure to pay or the underpayment of all sums other than bonuses, rentals, or shut-in payments, for whatever cause, shall subject the lessee, his successor, or assigns, to a penalty of ten percent of the total sum due not to exceed one thousand dollars, which penalty shall be assessed, and owing on the day following the date payment was due, and shall be deemed liquidated damages. The whole or any part of the penalty set forth herein may be waived by the State Mineral and Energy Board.
(3) When notice is given of the incorrect completion of any required form, or demand for payment is made for failure to pay or underpayment, or sixty days has elapsed from the date payment was due with the correctly filled out form, an additional penalty of two percent of the total sum then due shall accrue beginning on the sixty-first day on each thirty-day period thereafter, or fraction thereof, up to a maximum of twenty-four percent in additional penalty. The penalty therein provided shall be in addition to interest at the legal rate compounded monthly. Both the penalty and interest shall accrue to principal and interest accumulated at the end of each thirty-day period, or fraction thereof, also without necessity of further notice and shall be in addition to all remedies available under law, including those prescribed in R.S. 31:137 through 141. In the event the State Mineral and Energy Board finds, subject to judicial review, that a substantial and justiciable controversy exists as to whether any such royalties are legally due, it shall defer the commencement of the accrual of the aforesaid penalty until the controversy is resolved by amicable agreement or by final decree of any court of competent jurisdiction. The whole or any part of the penalties set for hereinabove may be waived by the State Mineral and Energy Board.
C. Subject to legislative appropriation, the state treasurer shall set aside from payments transmitted to him under this Section the sum of fifteen thousand dollars and shall maintain this balance from such future payments and the board is authorized to withdraw from this fund and pay in the manner provided by law any expenses incurred under R.S. 30:126 for advertising of state-owned lands. The state treasurer shall then credit and disburse these funds as follows:
First: One-tenth of the royalties from mineral leases on state-owned land, lake, and river beds and other water bottoms belonging to the state or the title to which is in the public for mineral development, except properties comprising the Russell Sage Wildlife and Game Refuge, in accordance with the provisions of Paragraph E of Section 6 of Article VII of the Constitution, shall be remitted to the governing authority of the parish in which severance or production occurs.
Second: All remaining funds, after complying with dedications heretofore made and after the distributions herein provided, shall be credited to the Bond Security and Redemption Fund and disbursed by the state treasurer according to law.
D. Of revenues received in each fiscal year by the state through judgments or settlements, even if a civil action is not commenced, resulting from underpayment to the state of severance taxes, royalty payments, bonus payments, rentals, shut-in payments or other sums payable to the state as lessor under the terms of a valid mineral lease, an amount equal to the actual costs expended from the Mineral and Energy Operation Fund and any attorney fees incurred shall be deposited into the Mineral and Energy Operation Fund.
Acts 1950, No. 290, §2; Acts 1954, No. 17, §1; Acts 1958, No. 353, §1; Acts 1959, No. 127, §1; Acts 1959, H.C.R. No. 52; Acts 1962, No. 420, §1; Acts 1969, No. 39, §1; Acts 1977, No. 667, §1, eff. July 20, 1977; Acts 1983, 1st Ex. Sess., No. 24, §1; Acts 1988, No. 963, §1; Acts 1990, No. 1018, §1, eff. July 26, 1990; Acts 1993, No. 267, §1, eff. June 2, 1993; Acts 2005, No. 449, §1, eff. July 11, 2005; Acts 2006, No. 519, §1, eff. Jan. 1, 2007; Acts 2009, No. 196, §2, eff. July 1, 2009; Acts 2010, No. 773, §1.
*NOTE: Paragraph (A)(3) was enacted by Acts 1988, No. 963, and was eff. Sept. 9, 1988. The date "July 26, 1990" was inserted following the enactment of Acts 1990, No. 1018.
