Provides relative to rates, computation, and administration of severance tax on oil, gas, and other natural resources (EN NO IMPACT GF RV See Note)
HB 518 revises Louisiana’s severance tax law for oil, gas, timber, and other natural resources. The bill updates the statutory language governing how severance taxes are calculated, clarifies valuation rules for oil and gas, and makes technical corrections throughout R.S. 47:633 and 645. It preserves the existing framework of different tax rates for different resources while refining definitions, certification requirements, and administrative procedures used to determine when reduced rates or exemptions apply.
A major focus of the bill is oil and gas tax treatment. It maintains the general severance tax rate on oil and gas but adjusts and clarifies special provisions for incapable wells, stripper wells, horizontal wells, inactive wells, orphan wells, and certain deep wells. The bill also revises the price-based exemption schedule for horizontal oil and gas wells, updates the rules for determining well cost and requiring independent accountant verification, and continues exemptions for certain gas uses such as reinjection, flaring, drilling fuel, and gas lift operations. In addition, it keeps the existing parish allocation structure for severance tax collections and reiterates the limits on how much may be credited to local governments.
The bill’s impact on state law is primarily to modernize and reorganize severance tax administration rather than to create a new tax regime. It affects the Department of Revenue, the Department of Energy and Natural Resources, the Louisiana Forestry Commission, producers of oil and gas, and operators of qualifying wells. It also touches timber and pulpwood valuation, natural gas liquids, and the distribution of severance tax revenues to parishes, while leaving the core constitutional allocation rules intact.
The overall sentiment around HB 518 appears strongly favorable and noncontroversial. It passed the House and Senate unanimously at each recorded stage, including final passage, rejection of Senate amendments, and adoption of the conference report. The vote history suggests broad bipartisan support and little public or legislative resistance.
No major points of contention are reflected in the available record. The bill’s detailed tax exemptions and reduced rates for certain oil and gas wells could be of interest to fiscal watchdogs or those concerned about tax incentives for the energy sector, but the recorded votes show no opposition. The main policy issue is the balance between encouraging production from marginal, inactive, orphan, and horizontal wells and preserving severance tax revenue for the state and parishes.
HB 518 amends Louisiana Revised Statutes 47:633 and 47:645 to adjust severance tax rates, valuation methods, exemptions, and administrative rules for oil, gas, timber, and other natural resources. It affects how the Department of Revenue and the Department of Energy and Natural Resources certify wells and calculate tax liability, while also preserving and clarifying parish revenue allocations from severance tax collections. The bill is described as having no impact on the General Fund revenue estimate.
The bill’s legislative reception was uniformly positive. It passed both chambers unanimously at every recorded vote, including final passage and conference report adoption, indicating broad agreement on the need for the technical and policy updates to severance tax law. The absence of recorded dissent or committee controversy suggests the measure was viewed as routine, industry-related tax administration legislation rather than a divisive tax increase or cut.
No notable contention is evident in the available materials. The most policy-sensitive provisions are the special severance tax exemptions and reduced rates for horizontal wells, stripper wells, inactive wells, orphan wells, and certain deep wells, along with the accountant certification requirements used to verify well costs. Those provisions primarily benefit oil and gas operators and could raise concerns about foregone revenue, but the vote record shows no organized opposition or amendment dispute that survived to final enactment.