Subject: LMOGA's Post Session Legislative Meeting
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Fri, 13 Jul 2001 20:01:00 -0700 (PDT)

I attended the Louisiana Mid-Continent Oil and Gas Association's Annual Post-Session Legislative Meeting, July 9 - 12.

Presentations were made by Louisiana Representatives Damico, Daniel, Montgomery, Pierre; Senators Barham, Theunissen; and Governor Foster's Deputy Chief of Staff covering the 2001 session, the upcoming special session in October and next year's "Fiscal Only" Session.

Although the vast majority of issues of interest to the industry were dealt with without much media attention, three issues - retail gasoline pricing, water policy management and the processing tax - received considerable media attention. 

Except as noted below, no legislation actively opposed by the oil and gas industry survived the legislative process.

The only setback for the industry dealt with legislation brought by an array of local government groups - police jurors, school boards, sheriffs, assessors and municipalities - in response to the continuing controversy over the parish property taxes paid by interstate pipeline companies. As part of the dispute, many pipeline companies have paid a portion of their taxes under protest - and that portion paid under protest, prior to passage of SB 1046, could not be budgeted or spent by local governments. While the passage of SB 1046 will allow parish governing bodies to spend the protested taxes, a number of amendments offered by supporters of industry and taxpayer fairness were adopted that will work to assure that the taxpayers will get their money back in a timely manner if they prevail.

Although the Public Service Commission has the authority to open up the electric market to competition, the Legislature recognizes the importance of additional generation capacity and passed legislation urging the LA. Dept. of Economic Development to explore ways, including possible incentives, to encourage additional unregulated electric generation to be developed in Louisiana.

Water management received a lot of attention due to several plans for generating plants that would use groundwater (unlike Enron's plans to use surface water). SB 965 creates a Ground Water Management Commission that has the authority to define critical areas and regulate withdrawals in those areas. It also creates a Ground Water Advisory Task Force that provides for local and industry participation.

As far as the upcoming special session and the 2002 session are concerned, taxes will be in the forefront, including the much- dreaded processing tax , which would cost Enron about $50 million. According to the participating legislators and the Governor's staff, the processing tax is gaining momentum because of Sen. Foster Campbell persistence in bringing it up year after year and his promises that the processing tax will take care of Louisiana's budget problems. The industry will continue to vigorously oppose this tax.

Donald, Gavin and Jerry - I am sending you a summary of Louisiana Legislative Bills pertaining to the energy industry.