News -> INDReporter TUE, MAY 24 9:43AM by Heather Miller

Another tax bill bites the dust

In yet another indication that taxes of any kind to deal with the looming budget deficit are a nearly impossible sell this session, a bill that would have taxed natural gas flowing through the state was killed in a House committee Monday.

The Advocate
reports that the House Committee on Ways and Means involuntarily deferred House Bill 436 by state Rep. Reed Henderson, D-Violet, thanks to what Henderson called political pressure from the Jindal administration to make sure lawmakers didn’t push the bill through to the full House floor for debate:
The money generated would have gone into a Fair Share Fund and then would have been divvied up among state government expenses.

Henderson said the state has provided much of the country’s energy needs over the past 100 years without getting much in return.

Through a companion bill, voters would have been asked to amend the state constitution in October to authorize a tax on natural gas transported in Louisiana. To go before voters, the proposal first would have to be approved by two-thirds of the Legislature.
One of the only people who testified in support of the bill was Louisiana Association of Educators Executive Director Michael Walker-Jones, who told the committee that the $3 billion a year in new revenue could make the state less dependent on federal grants and less financially depressed.

The majority of those who attended the hearing were opposed to the bill and say the new taxes on natural gas would hurt the boom in investment in the industry, particularly in north Louisiana with the Haynesville Shale.

Read more on the bill and committee meeting here

Comments (3)add
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written by RODEOCLOWN , May 24, 2011 - 08:28 pm
Bills of this nature are absolutely worthless. Similar types of legislation periodically find their way to various state legislatures. The last one I can remember was introduced during the Roemer administration. Such legislation is illegal because it constitutes a violation of the commerce clause, Article 1, Section 8, Clause 3 of the Constitution, in as much as such legislation, if allowed, would result inhibiting the free, unimpeded flow of goods and services through the country. If allowed, such legislation would result in a restriction of free trade and would cripple commerce in the United States. Such legislation is always of a populist nature, i.e, something politicians propose to look good. I refer to such attempts as the "Charlie Tuna Technique". The proposals "look good" but the reality is such proposals never/ever taste good because the proposals are totally illegal and unenforceable.
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written by RODEOCLOWN , May 24, 2011 - 08:58 pm
If the legislature was truly devoted to raising revenue for the state, the severance tax exemption granted to wells drilled horizontally would be repealed. This exemption was granted by the Foster Administration in 1994 in a effort of increasing drilling in Louisiana. In 1994, horizontal drilling was an experimental and developmental approach to drilling wells. Such is no longer the case. However, today, horizontally drilled wells are the predominate method employed for drilling either oil or gas wells. Because of this severance tax exemption, any oil or gas produced from a well drilled horizontally is exempt from paying any severance taxes. As such, all of the natural gas produced in the Haynesville Trend here in Louisiana is exempted from paying severance taxes. The USGS in February of '11 assessed the Haynesville Trend as the most productive natural gas field in the United States, surpassing even the Barnett Trend in Texas, and that production from the Trend averages 5.50BCG(that's billion cubic feet) per day. All of this production as well as the production from any other oil or gas well in Louisiana is exempted from paying severance taxes. Texas, Oklahoma, Arkansas, and Mississippi do not provide such an exemption but Louisiana continues to allow such. The loss of revenue from production in the Haynesville Trend alone has been estimated to be between 250-400 million dollars a year--from this one production area alone! God only knows how much money Louisiana is losing because horizontally drilled wells allow the producers to take advantage of such an exemption. It could literally amount to billions of revenue the state needs ever so badly.
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written by The Original Northsidian , May 26, 2011 - 12:43 am
If all property in the state were taxed fairly we would never be short of funds again. That is until the politicians and the political elite would get their greedy hands on the money. We are taxed enough already. Consumers pay taxes, not corporations!! My God, leave the energy industry alone!! If they leave Louisiana we will all be in the bread line. Doesn't anyone remember the OIL BUST OF THE 80'S?
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