HLS 13RS-1050 ORIGINAL
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2013
HOUSE BILL NO. 474
BY REPRESENTATIVE STUART BISHOP
ENERGY/DRILLING: Provides relative to the exemption from severance tax for inactive
wells
AN ACT1
To amend and reenact R.S. 47:633(7)(c)(iv) and (aa), relative to severance tax on oil and2
gas; to provide relative to a reduced tax rate on oil produced from a well classified3
as inactive; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 47:633(7)(c)(iv) and (aa) are hereby amended and reenacted to read6
as follows:7
ยง633. Rates of tax8
The taxes on natural resources severed from the soil or water levied by R.S.9
47:631 shall be predicated on the quantity or value of the products or resources10
severed and shall be paid at the following rates:11
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(7)13
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(c)15
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(iv) Production from oil and gas wells which have been returned to service17
after being inactive for two or more years or having thirty days or less of production18
during the past two years shall be exempt from subject to a severance tax of six and19
one-fourth percent of its value for a period of five ten years when returned to service20 HLS 13RS-1050 ORIGINAL
HB NO. 474
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
after being inactive for two or more years or having thirty days or less of production1
during the past two years. The exemption time period for the reduced tax rate shall2
be extended by the length of any inactivity of a well that has commenced production3
when such inactivity is caused by a force majeure.4
(aa) To qualify for inactive well status, an application for a two-year inactive5
well certification shall be made to the Department of Natural Resources, before6
commencement of production, during the period beginning July 31, 1994 and ending7
June 30, 2000, for the period beginning July 1, 2002 and ending June 30, 2006, and8
for the period beginning July 1, 2006 and ending June 30, 2010. Upon certification9
that a well is inactive, all production is exempt from severance tax shall be levied at10
the rate provided in this Paragraph for a period of five ten years from the date11
production begins or ninety days from the date of the application, whichever occurs12
first.13
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Stuart Bishop HB No. 474
Abstract: Provide for a severance tax rate of 6.25% for ten years on oil produced from a
well classified as inactive.
Present law levies a severance tax of 12.5% on oil produced in the state. Provides for a 5-
year exemption from such tax for oil produced from wells classified as inactive by the
commissioner of conservation.
Proposed law provides for a reduced rate of 6.25% for ten years on oil produced from wells
classified as inactive.
(Amends R.S. 47:633(7)(c)(iv) and (aa))