LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 571 HLS 23RS 105
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 12, 2023 8:40 AM Author: SCHEXNAYDER
Dept./Agy.: Natural Resources
Subject: Geologic Sequestration of Carbon Dioxide Analyst: Chris Henry
ENERGY EN SEE FISC NOTE LF RV Page 1 of 2
Provides relative to carbon capture and sequestration
Proposed law establishes regulations and redistributes fees for various aspects of carbon capture and sequestration.
Requires notice be given to parish governing authorities on applications for class V or VI well permits and for applications to
conduct geophysical surveys in their respective parish. Provides for the allocation of funding received from contractual
agreements entered into by the Office of Mineral Resources related to the storage of carbon dioxide on state owned lands
and water bottoms. Proposed law changes the fee levied by the commissioner of conservation from a charge per individual
operator to a charge on each carbon storage facility. Proceeds from this fee are deposited into the statutorily dedicated
Carbon Dioxide Geologic Storage Trust Fund (Trust Fund). Proposed law adds to the purposes of the Trust Fund remediation
associated with, arising from, or related to the site including property remediation.
EXPENDITURES 2023-24 2024-25 2025-26 2026-27 2027-28 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 SEE BELOW SEE BELOW SEE BELOW SEE BELOW $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0
REVENUES 2023-24 2024-25 2025-26 2026-27 2027-28 5 -YEAR TOTAL
State Gen. Fd. INCREASE INCREASE INCREASE DECREASE DECREASE
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other DECREASE DECREASE DECREASE DECREASE INCREASE
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds INCREASE INCREASE INCREASE INCREASE INCREASE
Annual Total
EXPENDITURE EXPLANATION
There will be an increase in expenditures from the Carbon Dioxide Geologic Storage Trust Fund resulting from the increase in
collections beginning when the first operators commence injection. This could occur as early as FY 25 and will gradually
increase as more facilities begin operations. The monies in the fund can only be used by the Office of Conservation for
specific purposes enumerated in R.S. 30:1110 (E); proposed legislation also adds language requiring a two-thirds vote of the
legislature to add new, additional uses for monies in the Trust Fund.
The change in distributions collected from carbon capture agreements is not anticipated to result in increased expenditures
for the Department of Natural Resources (DNR). The effects of the distribution change on collections is detailed on page 2.
REVENUE EXPLANATION
The proposed legislation changes the distribution of funds collected on contractual agreements with the Office of Mineral
Resources and operators engaging in carbon capture and sequestration on state owned lands and water bottoms. In the
current system, all bonus payments are deposited into the SGF, all liquidated damages payments are deposited into the
statutorily dedicated Mineral and Energy Operation Fund (M&EO Fund), and injection payments are split with 75% deposited
into the SGF and 25% into the M&EO Fund. The proposed law changes the distribution of collections regardless of its
originating source to where 30% is deposited into the M&EO Fund, 30% remitted back to the parish governing authority in
which the injection site is located, and 40% is deposited to the SGF. Timing of the payments in an agreement varies, but
typically bonus payments are made in the initial years, followed by liquidated damages payments, and finally injection
payments. Based on the four current carbon capture and sequestration agreements on state owned property and assuming
the minimum injection payments beginning in the fifth year of the agreements (FY 27), this would result in the following net
changes during the next five fiscal years: decrease of $1,256,534 to SGF, decrease of $11,919,816 to the M&EO fund, and
an increase of $13,176,350 to the parish governing authorities.
Continued on page two
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Evan Brasseaux
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Interim Deputy Fiscal Officer
 LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 571 HLS 23RS 105
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 12, 2023 8:40 AM Author: SCHEXNAYDER
Dept./Agy.: Natural Resources
Subject: Geologic Sequestration of Carbon Dioxide Analyst: Chris Henry
CONTINUED EXPLANATION from page one: Page 2 of 2
The proposed legislation would increase revenue deposited into the Carbon Dioxide Geologic Storage Trust Fund (Trust
Fund). Current law authorizes a fee charged on storage operators over 144 months (12 years) based on the tonnage of
carbon injected, not to exceed a total of $5 M regardless of how many facilities they operate. Proposed legislation changes
the levy from operator based to facility based, retaining the $5 M cap but also changing it to a per facility basis. Includes
additional provisions that an individual operator with more than one facility ceases to have to pay the fee once it has
contributed a total of $10 M to the Trust Fund, regardless if more than two facilities are operated. Should expenditures from
the fund cause the balance to fall below $4 M for a facility, the fees will resume. Similarly, if the balance falls below $8 M for
an operator with more than one facility the commissioner of conservation can resume collections of the fee. This change has
the potential to significantly increase revenues deposited into the Trust Fund depending on the number of operators with
more than two facilities. The tables below are an illustrative example which compares this change presuming no operator
has more than two facilities:
CURRENT LAW PROPOSED LAW
($5 M over 12 years per Operator) ($5 M over 12 years per Facility)
Fiscal # Operators Max. Annual Fee Fiscal # Facilities Max. Annual Fee
Year Injecting (Per Operator) Year Injecting (Per Facility)
2023-24 0 $0 2023-24 0 $0
2024-25 1 $416,667 2024-25 1 $416,667
2025-26 1 $416,667 2025-26 2 $833,333
2026-27 2 $833,333 2026-27 3 $1,250,000
2027-28 5 $2,083,333 2027-28 8 $3,333,333
2028-29 9 $3,750,000 2028-29 16 $6,666,667
2029-30 13 $5,416,667 2029-30 22 $9,166,667
2030-31 15 $6,250,000 2030-31 24 $10,000,000
2031-32 15 $6,250,000 2031-32 24 $10,000,000
2032-33 15 $6,250,000 2032-33 24 $10,000,000
2033-34 15 $6,250,000 2033-34 24 $10,000,000
2034-35 15 $6,250,000 2034-35 24 $10,000,000
2035-36 15 $6,250,000 2035-36 24 $10,000,000
2036-37 14 $5,833,333 2036-37 23 $9,583,333
2037-38 14 $5,833,333 2037-38 22 $9,166,667
2038-39 13 $5,416,667 2038-39 21 $8,750,000
2039-40 10 $4,166,667 2039-40 16 $6,666,667
2040-41 6 $2,500,000 2040-41 8 $3,333,333
2041-42 2 $833,333 2041-42 2 $833,333
TOTAL $75,000,000 TOTAL $120,000,000
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Evan Brasseaux
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Interim Deputy Fiscal Officer


Statutes affected:
HB571 Original: 30:209(4), 30:1109(A), 30:1110(C)
HB571 Engrossed: 30:209(4), 30:1105(A), 30:1109(A), 30:1110(C)
HB571 Reengrossed: 30:209(4), 30:1105(A), 30:1109(A), 30:1110(C)
HB571 Re-Reengrossed: 30:209(4), 30:1105(A), 30:1109(A), 30:1110(C)
HB571 Enrolled: 30:209(4), 30:1105(A), 30:1107(C), 30:1109(A), 30:1110(C)
HB571 Act : 30:209(4), 30:1105(A), 30:1107(C), 30:1109(A), 30:1110(C)