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Amendment 2 On The 2020 Louisiana Ballot: What To Know About Taxing Oil And Gas Wells


Here’s the language you’ll see on the ballot:

“Do you support an amendment to permit the presence or production of oil or gas to be included in the methodology used to determine the fair market value of an oil or gas well for the purpose of property assessment?”

How would it work?

The goal of this amendment is to help local tax assessors more accurately determine the value of oil and gas wells for the purposes of property tax assessment.

Right now, the state constitution does not allow local tax assessors to consider the value of the oil and gas that comes from a given oil and gas well when determining its market value for the purposes of property taxes.

Tax assessors have been forced to assess value based on other criteria, like how much it would cost to build a replacement well. That means wells with identical equipment receive identical tax assessments, even if one of them is producing and the other is not.

Amendment 2 would allow parish tax assessors to consider how productive a well is when determining its value. If it passes, the Louisiana Tax Commission would then start the process of creating rules for how local tax assessors should factor a well’s productiveness into its tax assessment.

This could mean that, eventually, companies that own less productive wells would pay lower local taxes on those wells, but higher local taxes on more productive wells.

Who’s for it and who’s against it?

The amendment is supported by the Louisiana Assessors’ Association, which represents parish tax assessors. It’s also supported by the Louisiana Mid-continent Oil and Gas Association (LMOGA) and the Louisiana Oil and Gas Association (LOGA), which represent the oil and gas industry.

This amendment came to the ballot via HB 360, legislation sponsored by Republican State Rep. Mike Huval. It passed with unanimous, bipartisan approval in both the House (98-0) and Senate (33-0).

No one spoke against HB 360 while the bill made its way through various House and Senate committees.

To learn more about what's on your 2020 ballot, check out our ballot guide.

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