§136. Funds; disposition and appropriation; 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 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 Conservation and Energy pursuant to his general authority in regard to
the functions of that office as provided in R.S. 36:921 through 926. A payor of royalty
whose total monthly
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§136. Funds; disposition and appropriation; 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 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 Conservation and Energy pursuant to his general authority in regard to
the functions of that office as provided in R.S. 36:921 through 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 Conservation and Energy 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.
*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.