Directs the legislative auditor to conduct certain audits to identify unpaid severance tax payments
Impact
The passage of HCR45 is poised to have a substantial impact on Louisiana's revenue generation from natural resource extraction. By mandating annual audits, the state aims to identify unpaid severance taxes, which, if collected, could bolster funding for public services. The resolution highlights the importance of accurate reporting and revenue collection practices by the Department of Revenue, as underreported taxes can lead to significant losses in potential state revenue. The directive for the Department of Natural Resources to provide quarterly reports underscores the need for accurate monitoring of oil and gas production to verify tax obligations.
Summary
HCR45, a House Concurrent Resolution, aims to ensure that severance taxes owed to the state of Louisiana are thoroughly audited and collected. The resolution directs the legislative auditor to conduct audits for the fiscal years 2011 through 2014 and on an annual basis thereafter. This initiative is significant as severance taxes represent about 10% of the state's general fund revenues, and the resolution emphasizes the need for stringent collection of these taxes to support state services, particularly in light of recent budget cuts affecting essential areas such as education and healthcare.
Sentiment
Overall, the sentiment surrounding HCR45 appears to be supportive among legislators who recognize the critical need for enhanced revenue oversight. The resolution reflects a proactive stance toward ensuring that companies comply with tax obligations, which is especially relevant given the state’s financial challenges. However, the topic of severance taxes can be contentious, as it touches on broader discussions about resource management and regulatory responsibilities, invoking varying opinions about the balance between industry profitability and public resource stewardship.
Contention
A notable point of contention arises from the relationship between severance taxes and the obligations of the industry towards coastal restoration. HCR45 clearly delineates that the collection of severance taxes should be viewed independently from responsibilities related to environmental damages or restoration efforts. This separation aims to clarify funding sources, yet it also opens up discussions on how the state allocates resources derived from natural resource extraction. As the resolution directs the legislative auditor to identify uncollected or underpaid taxes, there may be concerns from industry stakeholders regarding potential implications for their financial liabilities.
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
Requests the Department of Revenue and the Department of Natural Resources, in consultation with the Legislative Auditor, to take all action necessary to collect oil and gas severance tax and mineral royalties and to establish procedures to verify the accuracy of payments and refunds thereof, all to be monitored by the Legislative Auditor and reported to the legislature. (OR1 SEE FISC NOTE GF RV)
Relative to the legislative auditor, requires the auditor to provide for certain notifications of noncompliant auditees and requires auditees to designate an individual to file reports with the auditor and notify the auditor
Directing the Legislative Budget and Finance Committee to conduct a study to compare impact fees and severance taxes in the largest natural gas producing states and examine the competitive business climate for the industry in those states.
Requires local auditees and vendors who collect taxes on behalf of others to have certain annual audits and to submit certain sworn statements regarding tax collections to the legislative auditor (EN NO IMPACT LF EX See Note)
Provides relative to the duties of the Legislative Auditor relative to conducting certain audits of postsecondary education institutions (EN +$256,500 SG EX See Note)