• 2013 Legislative and Regulatory Update
  • September 30, 2013 | Authors: Jesse R. Adams; Marjorie A. McKeithen; Brett S. Venn
  • Law Firm: Jones Walker LLP - New Orleans Office
  • Primarily in response to the Bayou Corne sinkhole at the Napoleonville Salt Dome, three bills increasing regulations related to salt dome caverns and salt dome solution mining obtained legislative approval during the 2013 session and were signed by Governor Jindal on June 12, 2013. The new laws require the Commissioner of Conservation to create stricter guidelines for monitoring and assessing areas around salt dome caverns and solution mining wells and provide for significant penalties for violations. The laws also impose new public notification requirements for operators and require sellers of property to disclose to buyers any known salt dome caverns within one-half mile of their property. The new laws are summarized below.

    HB 493. Representative Karen St. Germain (D-Pierre Part) authored HB 493, which requires the Commissioner of Conservation to implement regulations to control solution mining injection wells, the permitting of such wells, and the resulting solution mined caverns. The new regulations must include requirements for, among other things: submission of the locations of caverns in relation to other caverns and the periphery of the salt stock every five years, setback distances for new caverns from the edge of the salt stock, enhanced monitoring of existing caverns, and site assessments and updates on the stability of the salt stock and surrounding sediment.

    HB 493 was unanimously passed by the House and the Senate. The Act became law on August 1, 2013 and is codified at La. R.S. 30:3(16), (17), and 4(M).

    HB 494. Representative St. Germain also authored HB 494, which imposes new requirements on sellers of property located near salt dome cavities, as well as salt dome owners and operators. Sellers of property are now required to disclose to buyers whether a salt dome cavity is located within one-half mile of the property being sold. Additionally, owners or operators of salt dome caverns are required to provide public notice of the location of their caverns by filing the survey plats of their cavern well locations in the parish mortgage and conveyance records. The Commissioner of Conservation may record such notice if an owner or operator fails or refuses to do so. The failure of an owner to file, or ensure that the operator has filed, the required public notice may constitute grounds for an action of redhibition by a purchaser of the owner's property.

    HB 494 was unanimously passed by the House and the Senate. It became law on August 1, 2013, and is codified at La. R.S. 9:3198(A)(2)(c) and 30:23.1.

    SB 139. Senator Rick Ward, III (R-Port Allen) authored SB 139, which authorizes the Commissioner of Conservation to assess substantial penalties for noncompliance with regulations for salt dome storage caverns or solution mining. The new law allows for a penalty of up to $32,500 per day for each violation. However, an additional penalty of $1 million is authorized for intentional, willful, or knowing violations that result in discharges or disposals which (a) cause severe environmental damage, or (b) endanger human life or health. Noncompliance with regulations can also result in revocation or suspension of a permit, license, or variance. Additionally, failure to timely correct noncompliance with a compliance or cease and desist order could result in an additional penalty of up to $50,000 per day for each day of continued noncompliance. The law provides criteria for assessing the amount of the penalties.

    SB 139 was unanimously passed by the Senate and the House. The Act became law on June 12, 2013, and is codified at La. R.S. 30:148.9(B) and 30:18(A)(6)).

    Other bills. Two bills related to salt domes failed to reach final passage in the 2013 legislative session. A bill by Senator Fred Mills was rejected twice by the Senate: first by a vote of 15 to 20, and later by a vote of 17 to 19. Senator Mills' proposal sought to suspend the issuance of new permits for solution mined caverns and storage facilities in any area where there had been a man-made structural failure in a dome underlying state waterbottoms. A bill by Senator Troy Brown failed to move out of committee. Senator Brown's bill proposed a statewide moratorium on salt dome storage and solution mining.

    Regulatory response. New regulations, in response to the legislation, are expected to be published for public comment in October by the Department of Natural Resources, Office of Conservation, and are expected to become effective after the first of the year.