HLS 17RS-921 ORIGINAL
2017 Regular Session
HOUSE BILL NO. 461
BY REPRESENTATIVES BISHOP, BAGLEY, BROADWATER, COUSSAN, DAVIS,
DEVILLIER, DWIGHT, EDMONDS, HENSGENS, NANCY LANDRY, MAGEE,
MIGUEZ, AND SCHEXNAYDER AND SENATORS CHABERT, CORTEZ, AND
HEWITT
TAX/SEVERANCE-EXEMPTI ON: Provides for severance tax exemptions for certain
inactive and orphan wells
1 AN ACT
2To amend and reenact R.S. 47:633(7)(c)(iv)(introductory paragraph), relative to state
3 severance taxes on oil and gas; to provide with respect to incentives relating to
4 inactive and orphan wells; to provide for eligibility and the extent of tax exemptions;
5 to provide for requirements and limitations; and to provide for related matters.
6Be it enacted by the Legislature of Louisiana:
7 Section 1. R.S. 47:633(7)(c)(iv)(introductory paragraph) is hereby amended and
8reenacted to read as follows:
9 ยง633. Rates of tax
10 The taxes on natural resources severed from the soil or water levied by R.S.
11 47:631 shall be predicated on the quantity or value of the products or resources
12 severed and shall be paid at the following rates:
13 * * *
14 (7)
15 * * *
16 (c)
17 * * *
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 17RS-921 ORIGINAL
HB NO. 461
1 (iv) Production from an oil and gas wells shall be exempt from severance
2 taxa period of five years when returned to service after being well subsequent to the
3 well having been inactive for two or more years or having thirty days or less of
4 production during the past two years shall be subject to a severance tax rate equal to
5 fifty percent of the rate imposed under this Paragraph or Paragraph (9) of this Section
6 for a period of ten years. Production from an oil and gas well subsequent to the well
7 having been designated as an orphan well for longer than sixty months shall be
8 subject to a severance tax rate equal to twenty-five percent of the rate imposed under
9 this Paragraph or Paragraph (9) of this Section for a period of ten years. The
10 exemption shall be extended by the length of any inactivity of a well that has
11 commenced production when such inactivity is caused by a force majeure.
12 * * *
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)]
HB 461 Original 2017 Regular Session Bishop
Abstract: Changes the severance tax exemption for production of oil and gas from an
inactive well from a 100% tax exemption for five years to a 50% tax exemption for
10 years, and adds a new exemption for production from an orphan well that
provides a 75% rate reduction for 10 years.
Present law authorizes a five year exemption from severance tax for production from oil and
gas wells that are returned to service after being inactive for two or more years or having
thirty days or less of production during the past two years (inactive well).
Proposed law changes present law by changing the extent and duration of the exemption for
production from an inactive well from 5 years at 100% to 10 years at 50%.
Proposed law changes present law by establishing an exemption for production from a well
with orphan well designation for at least 60 months, which exemption provides a 50% rate
reduction for a duration of 10 years.
(Amends R.S. 47:633(7)(c)(iv)(intro. para.))
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.