HLS 23RS-1347 REENGROSSED
2023 Regular Session
HOUSE BILL NO. 634
BY REPRESENTATIVES MCFARLAND, BAGLEY, FIRMENT, HORTON, CHARLES
OWEN, SCHAMERHORN, AND THOMPSON
TAX/SEVERANCE TAX: Provides relative to a severance tax exemption for deep-well oil
and gas production
1 AN ACT
2To amend and reenact R.S. 47:633(9)(d)(v), relative to severance tax; to provide with
3 respect to a severance tax exemption for production of oil and gas from wells drilled
4 to a certain depth; to provide for eligibility for the exemption; to provide with respect
5 to certain applications for well status determination filed with the Department of
6 Natural Resources; to provide for the application of certain laws; to provide for an
7 effective date; and to provide for related matters.
8Be it enacted by the Legislature of Louisiana:
9 Section 1. R.S. 47:633(9)(d)(v) is hereby amended and reenacted to read as follows:
10 ยง633. Rates of tax
11 The taxes on natural resources severed from the soil or water levied by R.S.
12 47:631 shall be predicated on the quantity or value of the products or resources
13 severed and shall be paid at the following rates:
14 * * *
15 (9)
16 * * *
17 (d)
18 * * *
19 (v) Production of natural gas, gas condensate, and oil from any well drilled
20 to a true vertical depth of more than fifteen thousand feet, where production
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HB NO. 634
1 commences after July 31, 1994, shall be exempt from severance tax, from the date
2 commercial production begins, for twenty-four months or until payout of the well
3 cost, whichever comes first. For the purpose of this exemption, the date commercial
4 production begins shall be the first day the well produces into the permanent
5 production equipment and the facilities have been constructed to process and deliver
6 natural gas, gas condensate, or oil to a sales point. The date of a drill-stem test,
7 production test, or any other related production shall not be considered, construed,
8 or deemed the date commercial production begins regardless of whether such
9 activities are classified as active production by the office of conservation of the
10 Department of Natural Resources. The date commercial production begins may be
11 a date subsequent to the well completion date.
12 * * *
13 Section 2. The provisions of this Act shall apply to each Application for Well Status
14Determination (Deep Well) filed with the office of conservation of the Department of
15Natural Resources on or after January 1, 2023. Each applicant who filed such an application
16on or after January 1, 2023, and prior to the effective date of this Act shall be permitted to
17amend its application to conform with the provisions of this Act.
18 Section 3. The provisions of this Act are procedural and interpretive.
19 Section 4. This Act shall become effective upon signature by the governor or, if not
20signed by the governor, upon expiration of the time for bills to become law without signature
21by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
22vetoed by the governor and subsequently approved by the legislature, this Act shall become
23effective on the day following such approval.
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 634 Reengrossed 2023 Regular Session McFarland
Abstract: Provides for eligibility for a severance tax exemption for production of natural
gas, gas condensate, and oil from any well drilled to a depth of more than 15,000
feet.
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HB NO. 634
Present law, pursuant to the authority of present constitution, levies severance taxes on all
natural resources severed from the soil or water, including all forms of timber, including
pulp woods, turpentine, and other forest products; minerals such as oil, gas, natural gasoline,
distillate, condensate, casinghead gasoline, sulphur, salt, coal, lignite, and ores; marble,
stone, sand, shells, and other natural deposits; and the salt content in brine.
Present law provides that production of natural gas, gas condensate, and oil from any well
drilled to a true vertical depth of more than 15,000 feet shall be exempt from severance tax,
from the date production begins, for 24 months or until payout of the well cost, whichever
comes first.
Proposed law amends present law to specify that the 24-month severance tax exemption
period commences with the date commercial production begins.
Proposed law provides that for purposes of eligibility for the exemption, the date commercial
production begins shall be the first day the well produces into the permanent production
equipment and the facilities have been constructed to process and deliver oil or gas to a sales
point. Stipulates that the date of a drill-stem test, production test, or any other related
production shall not be considered, construed, or deemed the date commercial production
begins regardless of whether such activities are classified as active production by the Dept.
of Natural Resources. Provides further that the date commercial production begins may be
a date subsequent to the well completion date.
Proposed law stipulates that its provisions shall apply to each Application for Well Status
Determination (Deep Well) filed with the office of conservation of the Dept. of Natural
Resources on or after Jan. 1, 2023. Provides that each applicant who filed such an
application on or after Jan. 1, 2023, and prior to the effective date of proposed law shall be
permitted to amend its application to conform with the provisions of proposed law.
Proposed law establishes that its provisions are procedural and interpretive.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:633(9)(d)(v))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Specify that the type of production to which present law and proposed law apply
is commercial production.
2. Revise proposed law relative to establishment of the date production begins to
stipulate all of the following:
a. The date commercial production begins shall be the first day the well
produces into the permanent production equipment and the facilities have
been constructed to process and deliver oil or gas to a sales point.
b. The date of a drill-stem test, production test, or any other related
production shall not be considered, construed, or deemed the date
commercial production begins regardless of whether such activities are
classified as active production by the Dept. of Natural Resources.
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HB NO. 634
The House Floor Amendments to the engrossed bill:
1. Delete the effective date specified for proposed law (July 1, 2023) and provide
instead that proposed law becomes effective upon signature of the governor or
lapse of time for gubernatorial action.
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.