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HB 495

TAX/SEVERANCE TAX: Limits the severance tax exemption for gas produced from certain horizontally drilled wells (EN +$8,600,000 GF RV See Note)

2025 Regular Session Introduced by Brett Geymann

Louisiana narrows severance tax exemptions for horizontally drilled gas wells, raising state revenue by approximately $8.6 million annually while potentially affecting industry investment decisions.

Signed by the Governor. Becomes Act No. 284.
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Bill Summary · HB 495

Legislative bill overview

HB 495 modifies Louisiana's severance tax structure by narrowing the exemption that previously applied to natural gas produced from horizontally drilled wells. The bill reduces tax exemptions for certain horizontal drilling operations, effectively increasing the state's severance tax revenue from gas production.

Why is this important

This change is expected to generate approximately $8.6 million in additional general fund revenue for Louisiana annually. The modification affects the oil and gas industry's tax obligations and represents a shift in the state's fiscal policy regarding resource extraction incentives, potentially impacting drilling investment decisions and state budget resources.

Potential points of contention

  • Industry competitiveness: Reducing tax exemptions may make Louisiana's gas operations less financially attractive compared to other drilling jurisdictions, potentially affecting investment and job creation in the energy sector
  • Selective application: The bill targets specifically horizontal drilling, which could be viewed as unfairly singling out a particular extraction method while leaving others relatively untouched
  • Revenue trade-offs: While generating $8.6 million in immediate tax revenue, the policy may discourage future drilling activity that could have produced larger long-term economic benefits through jobs and broader tax bases

Compiled from official sources — confirm details with the bill’s official record.

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