House committee backs constitutional amendment to remove severance-tax dollar cap for producing parishes

House members on the House Committee on Ways and Means voted April 22 to report House Bill 2 94 favorably, a proposed constitutional amendment that would remove the dollar cap on the share of severance tax revenue returned to the parishes where oil and gas are produced.

Representative Dodie Bagley, the bill sponsor, told the committee the amendment would "repeal the dollar cap on severance tax dollars remitted to the parishes in which the associated severance occurs." He said the bill would allow parishes that produce oil and gas to retain the full 20% share of severance collections rather than losing amounts once the current cap is reached.

Why it matters: Parish officials and local administrators told the committee they rely on severance remittances to fund local roads, drainage, water systems and other infrastructure. DeSoto Parish officials said the cap has limited their ability to respond to damage and maintain a long rural road network.

Parish perspective and examples

Michael Norton, parish administrator for DeSoto Parish, told members DeSoto has a population of about 27,000 and that "since 2002, the amount of exploration that has come out of our parish tops almost a billion dollars. Severance tax, a billion dollars has been sent to the state out of DeSoto Parish alone." Norton said the parish has received roughly $17 million back under the cap through fiscal 2023 and cited a local road repair that cost about $1.1 million as an example of the scale of needs.

Guy Cormier, representing the Police Jury Association of Louisiana, said parishes had long sought the change. "The ones that don't" — he said referring to parishes affected by the cap — "collect the true 20%." Cormier told committee members that statewide, the cap has meant the state retains an outsized share of severance revenue and that lifting the cap would help parishes address mandates and local costs.

Questions from members and sponsor response

Members asked whether the list of affected parishes is fixed; Representative Bagley said it is not an enumerated list in the bill but rather reflects parishes that currently produce oil and gas. Asked about whether the measure is a tax increase, Bagley replied, "No. No tax increase. The money comes out of the districts, the parishes, and it'll just get some of their money back." Several members pressed on fiscal impacts and whether the measure would require additional appropriations review; a committee staffer indicated current referral patterns do not place the bill in Appropriations at this time.

Formal action

Representative Ordras moved favorable reporting. The chair asked if there was any objection; seeing none, the committee reported House Bill 2 94 favorably.

What the bill would (and would not) do

The measure is a constitutional amendment proposal that would remove a statutory dollar cap on the amount of severance-tax revenue remitted to producing parishes so that parishes would receive the full 20% share rather than the capped amount. The committee recorded no final appropriation or policy details beyond reporting the bill favorably; any implementation details would be addressed in later stages if the amendment proceeds.

Who testified

Supporters included parish administrators and police-jury association representatives from DeSoto, Bossier and other producing parishes; a list of supporters was entered into the record during the hearing.

Ending

With broad support from parish officials and members who represent producing areas, the committee sent House Bill 2 94 forward. The bill text and any implementing language will be considered in subsequent committee stages and on the House floor if calendared.