HLS 15RS-1189 ORIGINAL
2015 Regular Session
HOUSE CONCURRENT RESOL UTION NO. 45
BY REPRESENTATIVE BOUIE AND SENATOR MURRAY
AUDITS/AUDITING: Directs the legislative auditor to conduct certain audits to identify
unpaid severance tax payments
1 A CONCURRENT RESOL UTION
2To direct the legislative auditor to conduct audits, for certain prior fiscal years and annually
3 thereafter, of severance taxes that are owed but have not been paid to the state; to
4 direct the Department of Revenue to promptly collect taxes identified by the
5 legislative auditor; and to direct the Department of Natural Resources, through the
6 office of conservation, to provide the Department of Revenue with quarterly reports
7 on oil and gas production.
8 WHEREAS, severance taxes make up approximately ten percent of the state's general
9fund revenues each year; and
10 WHEREAS, the Department of Revenue (LDR) is responsible for ensuring that the
11state collects severance tax payments; and
12 WHEREAS, the Supreme Court of Louisiana stated in Dominion Land Co. v. Stark,
13100 So. 244, 247 (La. 1924): "There is no law which demands more attention for its
14enforcement from public officers or in which the individual citizen is more concerned and
15interested than one which fixes the amount of contribution by the citizen and regulates the
16collection of that contribution for the support of our government"; and
17 WHEREAS, the legislative auditor conducted a performance audit on the collection
18by LDR of severance tax payments between 2009 and 2012; and
19 WHEREAS, the legislative auditor concluded that the LDR needed to improve its
20processes for collecting oil and gas severance taxes because the state could be losing
21millions of dollars of revenues under the existing program; and
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HCR NO. 45
1 WHEREAS, the legislative auditor found that prior to September 2010, LDR used
2an automated non-filer identification program to automatically detect companies that did not
3file required tax returns, including severance tax returns, and sent these non-filers proposed
4tax assessments; and
5 WHEREAS, data provided by LDR for the audit showed that for fiscal years 2009
6and 2010, the non-filer program identified an average of one thousand ninety-six instances
7of non-filed severance tax returns and proposed assessments totaling approximately $11.7
8million per year; and
9 WHEREAS, LDR suspended the non-filer program for all tax types in September of
102010 and did not resume the program for severance taxes until the end of 2013; and
11 WHEREAS, the legislative auditor additionally found that LDR did not adequately
12verify the accuracy of the self-reported data that companies use to determine the amount of
13severance taxes owed to the state; and
14 WHEREAS, severance tax payments are based on data that is reported by the
15companies that owe the tax, including oil and gas production amounts and sale price, and
16certain costs that are allowed to be deducted; and
17 WHEREAS, if a company under-reports production or sale price data, the company
18will miscalculate and underpay severance taxes owed to the state; and
19 WHEREAS, the legislative auditor determined that LDR could better ensure that it
20is identifying all underpaid severance taxes by comparing its data with data from the office
21of conservation within the Department of Natural Resources, because the office of
22conservation receives production data for all oil and gas wells in Louisiana; and
23 WHEREAS, severance taxes are the legal manifestation of the limited claim of every
24Louisiana citizen on the mineral wealth of the state; and
25 WHEREAS, payment of severance taxes is separate from and should not be confused
26with the industry's obligation to pay for coastal restoration or to repair damages; and
27 WHEREAS, citizens should not have to pay for coastal restoration and repair of
28damages out of severance taxes; and
29 WHEREAS, underpaid severance taxes result in less revenue for vital state services;
30and
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HCR NO. 45
1 WHEREAS, the state has made severe cuts to education, health care, and other
2programs assisting citizens because of its limited revenues and is in need of the additional
3revenue that should have been reported and collected in the form of severance taxes; and
4 WHEREAS, the agencies of this state, including but not limited to the Department
5of Natural Resources, the Department of Environmental Quality, and LDR, do not have the
6resources, including staff, to adequately monitor and regulate the natural resources of the
7state and the revenue derived therefrom, upon which the state so vitally depends; and
8 WHEREAS, a portion of the revenue generated from the collection of unreported and
9uncollected severance taxes could be used not only to increase funding to programs assisting
10citizens of the state in the form of education and health care, but also to provide resources,
11including staff, to agencies that monitor and regulate those who sever our natural resources;
12and
13 WHEREAS, the agencies of this state must regulate and enforce the responsible
14severing of our state's most vital resources, which must include at a minimum gathering
15accurate information such as production and pricing data; continuous monitoring; penalizing
16persons for violations, including but not limited to contamination; and efficiently and
17effectively collecting all severance taxes owed to the state and the citizens thereof derived
18from the privilege of severing our natural resources.
19 THEREFORE, BE IT RESOLVED that the Legislature of Louisiana does hereby
20determine that severance tax payments owed to the state and its citizens are independent
21from and do not diminish the responsibility for payments made for coastal restoration or
22repair of damages.
23 BE IT FURTHER RESOLVED that the Legislature of Louisiana does hereby direct
24the legislative auditor to conduct audits to identify severance taxes that are owed but have
25not been paid to the state for fiscal years 2011 through 2014.
26 BE IT FURTHER RESOLVED that the legislative auditor shall complete the audits
27and report thereon no later than January 31, 2016.
28 BE IT FURTHER RESOLVED that the Department of Revenue shall thereafter
29promptly issue the required notices, including all penalties and interest, which shall not be
30waived, and collect the unpaid severance taxes identified by the legislative auditor.
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HCR NO. 45
1 BE IT FURTHER RESOLVED that the Legislature of Louisiana hereby directs the
2legislative auditor to conduct these audits each year, beginning with fiscal year 2015, and
3to complete the audits and report thereon no later than October thirty-first each year so that
4the audit information can be used by the Revenue Estimating Conference.
5 BE IT FURTHER RESOLVED that the Department of Natural Resources through
6the office of conservation shall provide to the Department of Revenue quarterly reports on
7oil and gas production to be used by the Department of Revenue to verify the accuracy of
8the self-reported data used to determine the amount of severance taxes owed to the state and
9its citizens.
10 BE IT FURTHER RESOLVED that a suitable copy of this Resolution be transmitted
11to the legislative auditor, the commissioner of conservation, and the secretary of the
12Department of Revenue.
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)]
HCR 45 Original 2015 Regular Session Bouie
Directs the legislative auditor to conduct audits for fiscal years 2011 through 2014 and
annually thereafter of severance taxes that are owed but have not been paid to the state.
Directs the Dept. of Revenue to promptly collect taxes identified by the legislative auditor.
Directs the Dept. of Natural Resources through the office of conservation to provide the
Dept. of Revenue with quarterly reports on oil and gas production.
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