I was informed of this today from James Elder ( President of the Louisiana Chapter on the Nation Association of Royalty Owners)
This effects every mineral owner, suface owner, and every person residing in the state including any future land or royalty owner.
If this bill get passed it will probably cause a huge loss in revenue by the state in addition to any mineral owners who do not own the surface their minerals are under. Development of new leases and minerals would not be economically viable for the production company and would essentially disapear.
The following is a copy of the email received from Mr. Elder.
Dear NARO LA Members,
It has been brought to my attention that a bill is being brought to committee for review tomorrow that needs our attention as mineral owners. HB853 is a landowners protection act designed to protect the rights of surface owners, but has the ancillary and negative impact on operators and mineral owners alike.
Below is a digest of some of the main points of this proposal:
Proposed law provides that in absence of an agreement between the operator and the surface
owner and where the surface owner is not paid at least a 1/8 royalty from a mineral lease,
the operator shall fully compensate the surface owner for damages and reclaim the affected
surface within 9 months of cessation of operations.
Several onerous terms follow.
This law does not recognize situations of separation between surface and mineral servitude. In the above they are suggesting that the surface owner should be entitled to a 1/8th royalty, depending on the underlying circumstances, this could be separate, in lieu of, or in addition to whatever mineral lease is in place and that respective royalty owned by the rightful mineral owner. It usurps the rights and powers of the mineral owner and allows the surface owner to have power over drilling. Furthermore, the onerous terms outlined in the act deters the operator from developing in Louisiana and concurrently incentivizes the surface owner to not cooperate with the operator so that mineral ownership may revert back to the surface owner after 10 year prescription.
I encourage everyone to read this bill carefully.
The committee will meet tomorrow to begin review of HB853. We believe it is important to stop this bill in committee. Please submit your opposition, if you agree, to every member of the committee by e-mail. Please follow up tomorrow with a phone call to at least one committee member’s office.
The link to the House Committee is:
http://house.louisiana.gov/H_Cmtes/H_CMTE_NR.asp - will allow anyone to click directly on member and email
http://house.louisiana.gov/H_Cmtes/H_Cmte_NRaddresses.asp (with phone numbers)
We appreciate any time and/or effort you give to this matter, as it does affect operators and mineral owners alike.
James R. Elder
President & Co-Founder
NARO - Louisiana