Richardson, Upton Release Mineral Revenue Report

June 26, 2019

BATON ROUGE - In the 2018 second extraordinary session of the Louisiana Legislature, Senate Concurrent Resolution (SCR) 4 was passed asking Jim Richardson and Greg Upton to make specific recommendations to the legislature regarding mineral taxes in Louisiana. The economists were asked to explore possible changes to the Louisiana mineral tax structure and consider the following goals:

  • Preserve or improve the competitiveness of the oil and gas extraction sector in Louisiana
  • Decrease or remove the difference in tax rates for oil and gas
  • Create an equitable system of severance tax exemptions on all wells, not just horizontal wells
  • Hold constant or increase mineral revenues for the state
  • Explore other reasons why oil and gas production are fluctuating in the state of Louisiana and any changes that need to be made to increase production.

This document, released in February, serves as the preliminary status report highlighting the work conducted in the first year of a three-year study process. The topics discussed include Valuation of Oil and Natural Gas for Tax Purposes, Differential Tax Rate for Oil and Natural Gas, Taxing Horizontal versus Vertical Wells, Use of Oil and Gas Collections, Orphan Well Fund, Alternative Oil and Gas Taxes in Other States and Severance Tax on Timber and Pulpwood. The report can be read in its entirety here.

James A. Richardson is the John Rhea Alumni Professor of Economics in the E. J. Ourso College of Business Administration at LSU. He co-edited in 1988 Louisiana Fiscal Alternatives; in 1999 Handbook on Taxation; and in 2018 Exploring Long-Term Solutions for Louisiana’s Tax System. Richardson has served as a member of the Louisiana Revenue Estimating Conference since 1987. He has consulted with the U.S. Department of State, the U.S. Department of Commerce, and the U.S. Department of Justice. He worked with the Financial Services Roundtable regarding recovering from disasters after Hurricane Katrina.

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Elizabeth Eaton
E. J. Ourso College of Business
225-578-7833