§ 30:127 — Opening bids; minimum royalties; terms of lease; deposit; security

§127. Opening bids; minimum royalties; terms of lease; deposit; security
A. Only those bidders who are registered prospective leaseholders with the office of
mineral resources, or those who register within two business days after the lease sale at
which the bid is opened and prior to the conditional issuance of the lease, shall be allowed
to obtain a mineral lease from the state of Louisiana. Any bidder who is not properly
registered with the office of mineral resources at the time bids are opened, but whose bid is
otherwise acceptable, shall have until the end of the second business day following the date
on which the bid was conditionally accepted by the State Mineral and Energy Board to
become properly registered with the office of mineral resources. If the bidder remains
unregistered by the close of business of the second business day following the day the
mineral lease sale at which the bid was conditionally accepted, the conditionally accepted bid
shall be deemed rejected. The provisions of this Subsection shall also apply in cases where
there is no more than one bid made by unregistered prospective leaseholders. Bids may be
for the whole or any particularly described portion of land advertised. At the time and place
mentioned in the advertisement for the consideration of bids, they shall be publicly opened.
Bids received by the mineral board shall be opened at any state-owned buildings situated in
the city in which the capitol is located. The mineral board has authority to accept the bid
most advantageous to the state and may lease upon whatever terms it considers proper.
However, the minimum royalties to be stipulated in any mineral lease, other than a mineral
lease executed by or on behalf of a school board, shall be:
(1) One-eighth of all oil and gas produced and saved.
(2) One-eighth of the value per long ton of sulphur produced and saved which shall
yield not less than two dollars per long ton.
(3) One-eighth of the value per ton for all potash produced and saved, which shall
yield not less than ten cents per ton.
(4) Five percent of all lignite produced and saved.
(5) Five percent of the value per ton on a dry salt basis for all salt produced and
saved, which shall yield not less than ten cents per ton.
(6) One-eighth of all other minerals produced and saved.
B. The minimum royalties to be stipulated in any mineral lease executed by or on
behalf of any school board shall be:
(1) One-sixth of all oil and gas produced and saved.
(2) One-sixth of the value per long ton of sulphur produced and saved which shall
yield not less than two dollars per long ton.
(3) One-sixth of the value per ton for all potash produced and saved, which shall
yield not less than ten cents per ton.
(4) Five percent of all lignite produced and saved.
(5) Five percent of the value per ton on a dry salt basis for all salt produced and
saved, which shall yield not less than ten cents per ton.
(6) One-sixth of all other minerals produced and saved.
C. Each mineral lease where ascertainable shall clearly describe the land leased by
section, township, and range, or where authorized by the office of mineral resources, by
points along the lease boundary delineated by Lambert X,Y coordinates connected by lines
having distances and bearing, or in any other manner authorized by the office of mineral
resources, and shall contain a provision permitting the state, at its option, to take in kind the
portion due it as royalty of any minerals produced and saved from the leased premises. The
office of mineral resources may collect a fee of five dollars each to furnish a proof of lease.
D. The board may reject any and all bids, or may lease a lesser quantity of property
than advertised and withdraw the rest.
E. If all written bids are rejected, the board may immediately offer for competitive
bidding a lease upon all or any designated part of the land advertised, upon terms appearing
most advantageous to the state. This offering shall be subject to the board's right to reject
any and all bids. No lease shall be for more than five thousand acres, except leases for wind
energy production which shall not exceed twenty-five thousand acres. No lease for solar
energy production shall exceed thirty-five acres, except upon approval by the Senate
Committee on Natural Resources and the House Committee on Natural Resources and
Environment such lease may exceed thirty-five acres up to a maximum of five thousand
acres. Where a lease provides for delay rental, the annual rental shall not be for less than
one-half the cash bonus. All lands shall be accurately described in a lease.
F. Deposit that may be required to be submitted with each bid shall be in the form
of certified check, cashier's check, bank money order, or electronic funds transfer.
G. Any contract entered into for the lease of state lands for any purpose shall require
that access by the public to public waterways through the state lands covered by the lease
shall be maintained and preserved for the public by the lessee. The provisions of this Section
shall not prohibit the secretary of the agency having control over the property from restricting
access to public waterways if he determines that a danger to the public welfare exists. The
provisions of this Section shall not apply in cases involving title disputes.
H. The board may 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 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.
The board may 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.
However, no less than thirty days prior to entering into the first lease that contains a clause
granting a continuing security interest under the provisions of this Section, the board shall
submit the proposed clause language to the House Committee on Natural Resources and
Environment and the Senate Committee on Natural Resources for review.

Legislative History

Amended by Acts 1965, No. 44, §1; Acts 1970, No. 599, §1, Acts 1973, No. 123, §1; Acts 1975, No. 688, §1; Acts 1976, 2nd Ex.Sess. No. 6, §1, eff. Oct. 14, 1976; Acts 1979, No. 292, §1, eff. July 10, 1979; Acts 1980, No. 216, §1; Acts 1982, No. 289, §1; Acts 1984, No. 302, §1; Acts 1999, No. 1142, §1; Acts 2002, 1st Ex. Sess., No. 106, §1, eff. April 18, 2002; Acts 2005, No. 449, §1, eff. July 11, 2005; Acts 2007, No. 451, §1; Acts 2009, No. 196, §2, eff. July 1, 2009; Acts 2014, No. 48, §1; Acts 2019, No. 403, §1; Acts 2022, No. 443, §1; Acts 2024, 3rd Ex. Sess., No. 17, §1, eff. Jan. 1, 2025.