Louisiana Senate Bill SCR96

Louisiana 2018 Regular Session

• Introduced: 4/26/18
• Refer: 4/30/18
• Report Pass: 5/7/18
• Passed: 5/8/18
• Engrossed: 5/9/18
• Refer: 5/10/18

Caption

Requests the Louisiana State University Center for Energy Studies, Louisiana State University Public Administration Institute, and the Louisiana Tax Institute to analyze mineral revenues, taxes, and exemptions and to submit a written report of its findings to the legislature. (EG NO IMPACT GF EX See Note)

Impact

SCR96 targets existing mineral tax laws that currently privilege horizontal wells over traditional drilling methods. It seeks to create a more equitable tax framework that eliminates discrepancies in tax exemptions and aims to stabilize or enhance state revenue derived from mineral extraction activities. The proposed analysis is expected to yield recommendations that could lead to significant legislative changes impacting the oil and gas industry and state financial health.

Summary

Senate Concurrent Resolution 96 (SCR96) requests an analysis of Louisiana's mineral revenues, taxes, and exemptions by the LSU Center for Energy Studies, the LSU Public Administration Institute, and the Louisiana Tax Institute. The resolution emphasizes the need for a comprehensive review to ensure that the state’s tax laws support and enhance the competitiveness of the oil and gas extraction sector while maintaining adequate mineral revenues. The analysis will help to identify any disparities in tax treatments between different well types and recommend adjustments as needed.

Sentiment

The sentiment surrounding SCR96 is generally supportive among stakeholder groups involved in the mineral extraction industry, as they advocate for a fairer tax system. Nevertheless, there are voices of caution regarding the execution of any proposed changes, particularly the fear that altering tax structures could inadvertently weaken state revenues in the long term. The resolution represents a proactive approach by the legislature to ensure that Louisiana can effectively compete in the oil and gas sector.

Contention

Notable points of contention may emerge during the analysis phase, especially concerning how adjusting severance tax policies could affect different types of wells and their operational viability. Critics might raise concerns about the implications of equitable tax systems on the state’s overall revenue, emphasizing the need for a thorough examination of economic outcomes. Furthermore, there is potential for debate over balancing the interests of established oil firms versus smaller operations which may be more heavily impacted by changes in tax statutes.