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HB 879

ENERGY: Requires carbon dioxide storage facility operators pay twenty-five percent of their gross tax credit amount to the landowners of the area of operations

2026 Regular Session Introduced by Robby Carter

Louisiana HB 879 requires carbon storage operators to pay at least 25% of their gross 45Q tax credits to landowners, allocated by each owner's share of contributed acreage.

Read by title, under the rules, referred to the Committee on Natural Resources and Environment.
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Bill Summary · HB 879

Overview

HB 879 (2026, Louisiana) would require carbon dioxide storage facility operators to pay at least 25% of the gross sequestration tax credit they earn under federal law to landowners who hold an interest in the storage facility. Payments would be allocated in proportion to each landowner’s share of the total surface acreage contributed to the facility. The bill adds a new statutory provision (R.S. 30:1116) to govern these payments.

Purpose and intent

  • Create a mechanism for sharing a portion of the federal sequestration tax credit (the 45Q credit) with landowners who contribute land area for CO2 storage operations.
  • Ensure landowners with an ownership interest in the storage facility receive a defined portion of the tax credit indirectly through payments tied to acreage contributions.

Key provisions and changes

  • Adds new law: R.S. 30:1116, Payments to landowners.
  • Requirement: Carbon dioxide storage facility operators must pay at least one-quarter (25%) of the gross sequestration tax credits earned under 26 U.S.C. § 45Q to landowners with an ownership interest in the storage facility.
  • Allocation: Payments must be distributed according to each landowner’s proportionate share of the total surface acreage contributed to the storage facility.
  • Source of credits: The provision references the sequestration tax credits available under federal law (26 U.S.C. § 45Q).
  • Nature of payments: Payments are to landowners who have an ownership interest in the storage facility, not necessarily to lessees unless they hold an ownership stake in the acreage.

Affected parties

  • Primary: Operators of carbon dioxide storage facilities in Louisiana who claim 45Q sequestration tax credits.
  • Landowners: Individuals or entities with an ownership interest in land or acreage used for CO2 storage operations, who would receive a portion of the tax credit via the mandated payments.
  • Secondary: Possible downstream contractors or tenants if they hold an ownership interest; the bill specifies allocations by proportionate acreage contributed.

Procedural and timeline aspects

  • Effective date: The text provided does not specify an effective date beyond enactment, so the bill would take effect as provided by Louisiana’s general rules for new laws (often upon signing or a specified effective date in the enacted law).
  • Legislative progress: The bill was introduced in the 2026 Regular Session, referred to the Committee on Natural Resources and Environment, with a read-by-title action taken on March 9, 2026. It has a sponsor (Rep. Robby Carter) and a co-sponsor.
  • Implementation considerations: The bill would require administrative mechanisms to determine landowner ownership interests, measure acres contributed, and calculate proportional payment shares and distributions in compliance with 26 U.S.C. § 45Q credits.

Practical considerations and potential impact

  • Financial impact on operators: Operators would need to set aside and distribute at least 25% of their gross 45Q credits to landowners, which could affect net benefits or cash flow from sequestration projects. Operators will need to track acreage contributions and calculate allocations precisely.
  • Landowner benefits: Landowners with ownership interests could receive a predictable share of the federal tax credit value, potentially improving land-use negotiations and willingness to participate in CO2 storage projects.
  • Administrative burden: The requirement adds reporting and payment duties for operators and may necessitate new recordkeeping, verification of ownership interests, and allocation methodologies.

Summary

HB 879 seeks to codify a landowner compensation mechanism tied to Louisiana-based CO2 sequestration operations by requiring operators to pay at least 25% of their gross 45Q sequestration tax credits to landowners in proportion to acreage contributed. The measure aims to align landowner interests with storage projects while establishing a clear, formula-based allocation method.

Compiled from official sources — confirm details with the bill’s official record.

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