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Regular Session, 2014
SENATE BILL NO. 236
BY SENATORS GALLOT, BROOME, KOSTELKA, MORRELL AND GARY SMITH
TAX/TAXATION. Constitutional amendment to remove the "trigger", and instead start on
July 1, 2015, the new maximum allocation of certain severance taxes to parishes in which
severance occurs and the distribution to the Atchafalaya Basin Conservation Fund of a
certain amount of revenues received from severance taxes and royalties on state lands in the
Atchafalaya Basin. (2/3 - CA13s1(A)) (7/1/15)
A JOINT RESOLUTION1
Proposing to amend the introductory paragraph of Article VII, Section 4(D)(4), Section2
4(D)(4)(a), and the introductory paragraph of Section 4(D)(4)(b) of the Constitution3
of Louisiana, relative to severance tax allocation and distribution; to provide for a4
decrease in the amount of severance tax on certain natural resources which is5
retained by the state; to provide with respect to the use and allocation of certain6
severance tax revenues; to provide for amounts to be remitted to parish governing7
authorities; to provide for a certain amount of revenues received from severance8
taxes and royalties on state lands in the Atchafalaya Basin to be deposited in the9
Atchafalaya Basin Conservation Fund; and to specify an election for submission of10
the proposition to electors and provide a ballot proposition.11
Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members12
elected to each house concurring, that there shall be submitted to the electors of the state, for13
their approval or rejection in the manner provided by law, a proposal to amend the14
introductory paragraph of Article VII, Section 4(D)(4), Section 4(D)(4)(a), and the15
introductory paragraph of Section 4(D)(4)(b) of the Constitution of Louisiana, to read as16
follows:17 SB NO. 236
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ยง4. Income Tax; Severance Tax; Political Subdivisions1
* * *2
(D) * * *3
(4) Effective April 1, 2012 July 1, 2015, the provisions of this Subparagraph4
shall be implemented if and when the last official forecast of revenues adopted for5
a fiscal year before the start of that fiscal year contains an estimate of severance tax6
revenues derived from natural resources other than sulphur, lignite, or timber in an7
amount which exceeds the actual severance tax revenues from such natural resources8
collected in Fiscal Year 2008-2009. Upon the adoption of such official forecast, the9
Revenue Estimating Conference shall certify that the requirements for the10
implementation of the provisions contained in this Subparagraph have been met. In11
such event, the following distributions and allocations of severance tax revenues and12
other revenues provided in this Subparagraph shall be effective and implemented for13
the fiscal year for which the official forecast was adopted, and each year thereafter.14
The legislature shall provide by law for the administrative procedures necessary to15
change the severance tax allocation to parishes from a calendar year basis to a fiscal16
year basis.17
(a) Remittance to parishes.18
(i) In the first fiscal year of implementation of this Subparagraph For Fiscal19
Year 2015-2016, the maximum amount of severance tax on all natural resources20
other than sulphur, lignite, or timber which is remitted to the parish in which21
severance or production occurs shall not exceed one million eight hundred fifty22
thousand dollars. For all subsequent fiscal years, the maximum amount remitted to23
a parish shall not exceed two million eight hundred fifty thousand dollars.24
(ii) On July first of each year beginning July 1, 2017, the maximum amount25
remitted to the parish in which severance or production occurs, as provided in Item26
(i) of this Subsubparagraph, shall be increased by an amount equal to the average27
annual increase in the Consumer Price Index for all urban consumers for the previous28
calendar year, as published by the United States Department of Labor, which amount29 SB NO. 236
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shall be as calculated and adopted by the Revenue Estimating Conference.1
(iii) Of the total amount of severance tax revenues remitted in a fiscal year2
to a parish governing authority pursuant to the provisions of this Subparagraph, any3
portion which is in excess of the amount of such tax revenues remitted to that parish4
in Fiscal Year 2011-2012 Fiscal Year 2014-2015 shall be known as "excess5
severance tax". At least fifty percent of the excess severance tax received by a parish6
governing authority in a fiscal year shall be expended within the parish in the same7
manner and for the same purposes as monies received by the parish from the Parish8
Transportation Fund.9
(b) Deposit into the Atchafalaya Basin Conservation Fund to begin in Fiscal10
Year 2015-2016.11
* * *12
Section 2. Be it further resolved that this proposed amendment shall be submitted13
to the electors of the state of Louisiana at the statewide election to be held on November 4,14
2014.15
Section 3. Be it further resolved that on the official ballot to be used at said election16
there shall be printed a proposition, upon which the electors of the state shall be permitted17
to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as18
follows:19
Do you support an amendment to authorize the following for Fiscal Year20
2015-2016 and thereafter:21
(1) A decrease in the amount of taxes retained by the state on the22
severance of natural resources, other than sulphur, lignite, and timber, and to23
increase the maximum amount of such revenues which are remitted to the24
parish governing authority in which severance occurs from eight hundred25
fifty thousand dollars a fiscal year (increased each fiscal year for inflation)26
to one million eight hundred fifty thousand dollars for Fiscal Year 2015-27
2016, then two million eight hundred fifty thousand dollars for Fiscal Year28
2016-2017 and each fiscal year thereafter (such maximum increased each29 SB NO. 236
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fiscal year for inflation); fifty percent of the excess severance taxes received1
by the parish to be expended within the parish in the same manner and for the2
same purposes as monies received by the parish from the Parish3
Transportation Fund?4
(2) A distribution of an amount equal to fifty percent of the revenues5
received from severance taxes and royalties on state lands in the Atchafalaya6
Basin, not to exceed ten million dollars each fiscal year to be deposited into7
the Atchafalaya Basin Conservation Fund; subject to the approval of the8
appropriate subject matter committees of the legislature, the money to be9
expended exclusively for projects contained in the state or federal Basin10
master plans or an annual Basin plan developed and approved by the11
advisory or approval board created by law specifically for that purpose, or to12
provide match for the Atchafalaya Basin Floodway System, Louisiana13
Project, and in addition, eighty-five percent of the money appropriated in any14
fiscal year to be used for water management, water quality, or access15
projects, and the remaining fifteen percent to complete ongoing projects and16
for projects that are in accordance with the mission statement of the state17
master plan; provided that no more than five percent in any fiscal year may18
be used for the operational costs of the program or the department?19
(Amends Article VII, Section 4(D)(4) (intro para), Section 4(D)(4)(a), and20
Section 4(D)(4)(b) (intro para))21
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Riley Boudreaux.
DIGEST
Gallot (SB 236)
Present constitution, since July 1, 2007, requires 1/5th of the severance tax on all natural
resources other than sulphur, lignite, or timber ("oil and gas severance tax") to be remitted
to the governing authority of the parish in which severance or production occurs, not to
exceed $850,000, increased each July 1
st
thereafter by an amount equal to the average annual
increase in the CPI for all urban consumers for the previous calendar year, as calculated and
adopted by the Revenue Estimating Conference. The cap for FY 12-13 was $951,475. The
cap for FY13-14 is $971,266.
Present constitution provides for an increase of such maximum to $1,850,000 in the first SB NO. 236
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fiscal year after the contingency described below occurs (the "trigger"), and to $2,850,000
for each fiscal year thereafter. The maximum is also to be increased each fiscal year
thereafter by an amount equal to the average annual increase in the CPI for all urban
consumers for the previous calendar year, as calculated and adopted by the Revenue
Estimating Conference. Requires at least 50% of the "excess severance tax" received by a
parish governing authority in a fiscal year to be expended within the parish in the same
manner and for the same purposes as monies received by the parish from the Parish
Transportation Fund. "Excess severance tax" is defined as any portion of severance tax
received by a parish which is in excess of the amount of such tax revenues remitted to that
parish in FY2011-2012.
Present constitution also contains a provision requiring an amount equal to 50% of the
revenues received from severance taxes and royalties on state lands in the Atchafalaya Basin,
but not to exceed $10 million each fiscal year to be deposited into the Atchafalaya Basin
Conservation Fund. Subject to the approval of the appropriate subject matter committees
of the legislature, the money is to be expended exclusively for projects contained in the state
or federal Basin master plans or an annual Basin plan developed and approved by the
advisory or approval board created by law specifically for that purpose, or to provide match
for the Atchafalaya Basin Floodway System, Louisiana Project. In addition, 85% of the
money appropriated in any fiscal year, must be used for water management, water quality,
or access projects, and the remaining 15% to complete ongoing projects and for projects that
are in accordance with the mission statement of the state master plan. However, no more
than 5% in any fiscal year may be used for the operational costs of the program or the
department.
Present constitution has a trigger on the increases and distributions described above, that is,
a provision which provides that the increases and distributions cannot be implemented until
a fiscal year in which the last official forecast of revenues adopted for a fiscal year, before
the start of that fiscal year, contains an estimate of oil and gas severance tax revenues in an
amount which exceeds the actual oil and gas severance tax revenues collected in FY2008-
2009.
Proposed constitutional amendment removes the trigger described above for both the
increased maximums provided for parishes in which oil and gas severance and production
occurs and for the Atchafalaya Basin Conservation Fund distribution, and requires the
increases and distributions to begin in FY2015-2016.
Specifies submission of the amendment to the voters at the statewide election to be held on
November 4, 2014.
(Amends Const. Art. VII, Sec. 4(D)(4)(intro para), Sec. 4(D)(4)(a), and Sec. 4(D)(4)(b)(intro
para))