The 2013 Louisiana State legislative session has now adjourned for the year. Each year leading up to session, typically one conversation dominates the press. This year, the topic of discussion was regarding the Governor’s tax plan that was set to do away with personal, corporate and franchise taxes as well as restructure many important tax incentives.
Tax incentives especially important to the oil and gas industry were up for modification if the tax plan were to move forward. The horizontal drilling and inactive well incentives are two examples of items that play a crucial role for our state’s economic development and their modification was a part of the conversation for saving money in the tax plan. Early on in the session, the Jindal tax plan was shelved, but budgetary talks continued as to how restructuring incentives might occur. However, by the end of session, no changes were made to the tax incentive structure.
Besides the vital incentives being on the table, many other bills were up for a vote that could have had a potential impact on the oil and gas industry. Bills that could have affected operator expenses, royalties, leases and water management did not pass or were turned into study resolutions.
In addition to incentives and a broad range of bills, one package of bills in particular, was passed that will ensure additional safety of storage domes. The goal of these bills is to provide additional safeguards to our citizens from having to deal with another Bayou Corne incident that is still problematic for some Assumption Parish residents.
Finally, an issue that is important to the oil and gas industry as well as the recreational fishermen and divers is the Rigs to Reef funding. The Rigs to Reef program allows decommissioned rigs to be sunk under certain guidelines and regulations and turned into natural reefs for the aquatic life of the Gulf of Mexico.
While bills were filed to sweep the funds for this great program, ultimately the funds were retained within the program. Additionally, a constitutional amendment was passed to protect the funds from future sweeping attempts and to ensure the program sustainability for the future.
No legislative session is perfect for any industry. Give and take is a common theme as legislators convene upon Baton Rouge each year. Whether or not the oil and gas industry, the business community or the local municipalities were able to leave happy on all fronts, this was a positive year for our state. Anytime persons elected by the people, vote and pass laws, while having differing opinions, and peace is maintained, we can thank God for our democracy. But, as our democracy goes, the 2014 conversations and negotiations began as soon as the closing gavel was banged for 2013.