Louisiana House Bill HB444

Louisiana 2020 Regular Session

• Introduced: 2/27/20
• Refer: 2/27/20
• Refer: 3/9/20

Caption

(Constitutional Amendment) Provides relative to the amount of severance tax collected by the state and remitted to parishes (OR DECREASE GF RV See Note)

Impact

If enacted, the amendment would allow the Louisiana legislature to increase the severance tax remittance by law, which could significantly impact funding for local parishes. As it stands, the cap on these funds can hinder the ability of local authorities to address their specific needs efficiently. The change is expected to enhance local government financial resources, thereby potentially fostering economic development at the parish level and better enabling local authorities to respond to community needs.

Summary

House Bill 444 proposes an amendment to the Louisiana Constitution regarding the allocation of severance tax revenues from natural resources excluding sulphur, lignite, and timber. The bill aims to modify the existing framework by removing the maximum limit on the amount of severance tax that can be remitted to parish governing authorities. Currently, one-fifth of the severance tax collected is allocated to parishes, but this is subject to a cap which HB444 seeks to eliminate, allowing more flexible financial support to local governments.

Sentiment

The sentiment surrounding HB444 appears to be generally supportive among local government advocates who view the increased financial autonomy as beneficial for local governance and essential for managing local affairs effectively. However, concerns may arise regarding fiscal responsibility and the potential for increasing reliance on severance taxes, which are inherently volatile and tied to the extraction industry. This aspect of the bill could lead to some contention among legislators, particularly those advocating for sustainable funding sources.

Contention

Key points of contention likely revolve around the implications of removing the cap on severance tax remittances, such as the risk of local governments becoming overly dependent on these funds. Critics may argue that this shift could lead to unpredictable financial planning for local governments and a disproportionate focus on resource extraction at the expense of other funding sources. Additionally, the bill's proponents must address how to ensure that these funds are utilized effectively within the parishes after being allocated more freely.