House Bill 29 (LA HB29) was vetoed by Gov. John Bel Edwards. House Bill 29 would have exempted certain oil and gas wells from paying severance taxes on the product produced for up to two years, depending on the type well. The Governor’s veto remarks are attached here: Veto Message.
Louisiana House Bill No. 29 was passed October 2020 and has been sent to the Governor for approval. House Bill 29 will exempt certain oil and gas wells from paying severance taxes on the product produced for up to two years, depending on the type well.
Here is a portion taken directly from the House Bill:
There shall be an exemption from the severance tax levied in this part on oil production from an orphaned, newly drilled, or newly completed well that is undergoing or has undergone well enhancements that required a Department of Natural Resources permit, including but not limited to re-entries, workovers, or plugbacks, from which production commences on or after January 1, 2021, and or before December 31, 2023.
(aa) The exemption for wells that have undergone well enhancements shall last for a period of six months or until payout of the well cost is achieved, whichever occurs first.
(bb) The exemption for new wells shall last for a period of twelve months or until payout of the well cost is achieved, whichever occurs first.
(cc) The exemption for orphaned wells shall last for a period of twenty-four months or until payout of the well cost is achieved, whichever occurs first.
(dd) The exemption period shall begin the first day of the month after the operator notifies the Department of Revenue that new or post enhancement production has commenced. Notification shall be in a form approved by the secretary of the Department of Revenue.
(ee) There shall be no more than one exemption authorized pursuant to this Subparagraph for any wellhead.
Please see the Louisiana House Bill No. 29 for more details.
