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Program A: Mineral Resources Management

Program Authorization: La. Const. Article IX, Sec. 3 - 6; R.S. 36:351; R.S. 30:121

PROGRAM DESCRIPTION

The State of Louisiana holds title to vast areas of land and water bottoms which produce or have the potential to produce minerals (primarily oil and gas). Leasing of these areas for mineral production provides a large revenue source for the state. The Mineral Resources Management Program provides staff support to the State Mineral Board which ensures that the state is obtaining the highest possible returns from the leasing of these lands. The mission of this program is to provide staff support to the State Mineral Board in granting and administering leases on state-owned lands and waterbottoms for the production and development of minerals, primarily oil and gas. The goal of this program is to support the Mineral Board and to ensure that the state-owned lands and water bottoms produce an optimal return on investments for the State of Louisiana annually. There are two activities in this program: Mineral Resources Management, and Mineral Income Auditing.

OBJECTIVES AND PERFORMANCE INDICATORS

Unless otherwise indicated, all objectives are to be accomplished during or by the end of FY 1999-2000. Performance indicators are made up of two parts: name and value. The indicator name describes what is being measured. The indicator value is the numeric value or level achieved within a given measurement period. For budgeting purposes, performance indicator values are shown for the prior fiscal year, the current fiscal year, and alternative funding scenarios (continuation budget level and Executive Budget recommendation level) for the ensuing fiscal year (the fiscal year of the budget document).

 

 

 

 

 

 

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded with Fees and Self-generated Revenues, Statutory Dedications, and Federal Funds. The Fees and Self-generated Revenues are derived from the following: (1) assessing a 10% fee on the bonus amount for each lease awarded; (2) assessing a $100 fee for each assignment and $500 for each unitization proposal or other instrument requiring advertisement; (3) assessing fees for geophysical permits; (4) assessing fees or liquidated damages as specified in certain lease forms for failure to timely submit releases of leases and production on unleased acreage; (5) assessing a fee of $35 per hour for staff time required to process claims for refunds of overpayment of royalties caused by the payer's errors; (6) assessing a fee for reproduction expenses; (7) assessing a fee of $120 per year for each subscription for Notices of Publication which describe tracts being offered for lease and contain lease sale results and other special notices; (8) assessing a fee of $200 for mineral lease nominations; (9) assessing a 10% late royalty payment penalty; (10) assessing a 5% incorrect royalty reporting penalty; (11) the sale of lease maps; and (12) assessing a $100 per day penalty for late assignments. These Self-generated Revenues provide for the operational expenses of this office. The Statutory Dedications are derived from the Legal Support fund per Act 1293 of 1995. (Per R.S. 39:32B. (8), see table below for a listing of expenditures out of each statutory dedicated fund.) The Federal Funds are derived from the Department of Interior's Mineral Management Service.

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

DESCRIPTION

 

 

 

 

 

$0

$8,042,259

81

 

ACT 19 FISCAL YEAR 1998-1999

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

 

 

 

 

 

$0

$8,042,259

81

 

EXISTING OPERATING BUDGET November 20, 1998

 

 

 

 

 

$0

$78,110

0

 

Annualization of FY 1998 -1999 Classified State Employees Merit Increase

$0

$64,205

0

 

Classified State Employees Merit Increases for FY 1999-2000

$0

$42,247

0

 

Risk Management Adjustment(s)

$0

$4,889

0

 

Acquisitions and Major Repairs

$0

($18,000)

0

 

Nonrecurring Acquisitions and Major Repairs

$0

$37,838

0

 

Salary Adjustment

$0

($66,144)

0

 

Attrition Adjustment

$0

$420,000

0

 

Workload IAT to LSU for LA Geological Survey to prepare the digitization of State lease maps

$0

$241,740

0

 

Workload Funds for a contract to provide DNR with eleven software modules, installation testing and training for the purpose of providing digital geographic information (GIS)

$0

$2,943

0

 

Other Adjustments Civil Service reallocation of professional engineers

 $0

 $11,159

 0

 

Other Adjustments An increase in retirees group insurance premium 

$0

$30,000

0

 

Other Adjustments Continuing education of employees

$0

$3,292,965

0

 

Other Adjustments - IAT to the Office of the Secretary for indirect costs

         

$0

$12,184,211

81

 

TOTAL RECOMMENDED

 

 

 

 

 

$0

$4,141,952

0

 

DIFFERENCE (TOTAL RECOMMENDED AND EXISTING OPERATING BUDGET)

The total means of financing for this program is recommended at 151.4% of the existing operating budget. It represents 121.0% of the total request ($10,068,475) for this program. The 51.4% increase is due to an increase in indirect costs to be transferred to the Office of the Secretary for administrative services. This recommendation results in a general fund reduction in the Office of the Secretary. This program does not have any positions that have been vacant for one (1) year or more.

PROFESSIONAL SERVICES

$1,000,000

 

To Be Assigned - Legal services to pursue recovery of mineral underpayments per Act 1293 of 1995

$20,000

 

To Be Assigned - Computer consultation relative to the royalty accounting and the leasing information systems

 

 

 

$1,020,000

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

$1,160,000

 

Upgrade royalty accounting and leasing information systems computer for the Department

$3,395

 

Recordation of leases and other documents for the re-leasing of state acreage

 $30,000

 

Continuing education of professional employees to maintain certification in their respective fields 

$241,740

 

Upgrade computer system with GIS software for digital mapping and spatial analysis for the Department

     

$1,435,135

 

TOTAL OTHER CHARGES

 

 

 

 

 

Interagency Transfers:

$71,143

 

DNR - Secretary - Executive Program - indirect cost of the legal section for services rendered

$1,563,616

 

DNR - Secretary - Management and Finance Program - indirect cost for administrative services and data processing

$720,000

 

LSU - Transferred the Louisiana Geological Survey

$50,000

 

Division of Administration - Office of State Lands for lease preparation

 $3,292,965

 

DNR Office of the Secretary for indirect cost

     

$5,697,724

 

TOTAL INTERAGENCY TRANSFERS

ACQUISITIONS AND MAJOR REPAIRS

$4,889

 

Replacement of one seven (7) lateral file cabinets, three (3) secretarial chairs, three (3) legal file cabinets, one (1) printer table, one (1) work table

 

$4,889

 

TOTAL ACQUISITIONS AND MAJOR REPAIRS


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