House Bill No. 25RS-219, introduced by Representative Geymann, seeks to amend and reenact R.S. 47:633, focusing on the severance tax on oil, gas, and other natural resources in Louisiana. The bill establishes a severance tax rate of twelve and one-half percent on oil, with reduced rates for specific classifications of wells, such as those producing less than twenty-five barrels of oil per day or classified as stripper wells. It also introduces exemptions for oil production from orphan wells undergoing enhancements and sets criteria for qualifying for reduced tax rates on inactive or orphan wells. The Department of Energy and Natural Resources will oversee the certification of these wells, and operators can apply for tax credits if they have previously paid severance tax at the full rate.

Additionally, the bill outlines a new framework for tax exemptions on horizontal wells producing oil and natural gas, with specific exemption percentages based on market prices. For oil, exemptions range from 100% at or below $70 per barrel to none above $110 per barrel, while for natural gas, exemptions start at 100% for prices at or below $4.50 per million BTU and decrease to none above $7.00 per million BTU. The bill also clarifies definitions related to well costs, specifies that gas used for drilling fuel is not taxable, and updates terminology regarding gas consumption and production. Furthermore, it empowers the Louisiana Forestry Commission to determine the market value of timber and related resources, ensuring a streamlined and accurate administration of the severance tax in the state.

Statutes affected:
HB518 Original:
HB518 Engrossed: