HLS 14RS-3222 ORIGINAL
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Regular Session, 2014
HOUSE CONCURRENT RESOLUTI ON NO. 111
BY REPRESENTATIVE HARRISON
TAX/SEVERANCE TAX: Directs the legislative auditor to conduct annual audits of
severance tax payments and directs the Department of Revenue to establish
procedures to verify self-reported information regarding severance taxes
A CONCURRENT RESOLUTI ON1
To authorize and direct the Louisiana Legislative Auditor to conduct annual audits of2
severance tax payments and to authorize and direct the Department of Revenue to3
develop, implement, and maintain a procedure to verify the accuracy of the data that4
companies self-report regarding the amount of severance taxes they owe.5
WHEREAS, a recent performance audit by the Louisiana Legislative Auditor found6
that severance taxes owed to the state but not paid, in an amount that could not be7
determined, may have gone undetected by the Department of Revenue over the past three8
years; and9
WHEREAS, the amount of unpaid severance taxes identified through field audits10
decreased by 99.8% from $26 million in fiscal year 2010 to $40,729 in fiscal year 2012 as11
a result of changes in audit procedures; and12
WHEREAS, the legislative auditor's performance audit found that the Department13
of Revenue's review of severance tax refund requests is inadequate and that the department14
does not adequately verify the accuracy of the data companies self-report regarding the15
amount of severance taxes they owe to the state and its citizens; and16
WHEREAS, severance taxes are the legal manifestation of the limited claim of every17
Louisiana citizen on the mineral wealth of the state, and as such, payment of severance taxes18
is separate from and should not be confused with the oil and gas industry's obligation to pay19
for the repair of damages to and restoration of Louisiana's coast, and taxpayers should not20
have to pay for such restoration with severance tax proceeds because severance taxes are21
levied on profits generated by extracting the state's natural resources; and22 HLS 14RS-3222 ORIGINAL
HCR NO. 111
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WHEREAS, the state has severely cut funding for education, health care, and other1
programs that assist citizens because of inadequate revenue, and it is in need of the2
additional revenue that is not being collected due to inadequate monitoring of severance3
taxes.4
THEREFORE, BE IT RESOLVED that the Legislature of Louisiana does hereby5
authorize and direct the Louisiana Legislative Auditor to conduct annual audits of oil and6
gas severance tax payments to ensure that the state receives complete, accurate, and timely7
severance tax payments and to conduct such audits of severance tax payments for the past8
five years.9
BE IT FURTHER RESOLVED that the annual audits shall be completed by the last10
day in October so that additional revenue discovered can be considered by the Revenue11
Estimating Conference.12
BE IT FURTHER RESOLVED that the Department of Revenue is hereby authorized13
and directed to develop, implement, and maintain a procedure to verify the accuracy of the14
data that companies self-report regarding the amount of severance taxes they owe to the state15
and its citizens.16
BE IT FURTHER RESOLVED that the Legislature of Louisiana hereby finds that17
severance tax payments are independently owed to the state and its citizens and do not18
diminish the responsibility of oil and gas companies to pay for coastal restoration or repair19
of damages.20
BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the21
Louisiana Legislative Auditor and the secretary of the Louisiana Department of Revenue.22
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)]
Harrison HCR No. 111
Directs the La. Legislative Auditor to conduct annual audits of severance tax reports and
authorizes and directs the Dept. of Revenue to implement a procedure to verify self-reported
severance tax information. Finds that severance tax payments do not diminish responsibility
to pay for coastal restoration and damage repair.