Louisiana parishes want a bigger share of the Haynesville Shale revenue pie, and they might get it if the state’s voters approve a measure on the statewide Nov. 2 ballot.

Constitutional Amendment No. 2, or Act 541, would decrease the amount of natural resources severance taxes retained by the state and increase the amount remitted to the parishes where the taxes were generated. The measure does not call for a new or increased tax but rather would redirect revenue from state government to the parishes. It excludes sulphur, lignite and timber.

In the first year of implementation the annual maximum amount a parish could get would increase from $850,000 to $1.85 million. In the following years the annual maximum would be $2.85 million. The figure would be adjusted annually to reflect changes in the consumer price index.

According to state figures, natural gas severance tax revenue excluding that from the Outer Continental Shelf (OCS) was $292.18 million in 2009. Natural gas accounted for about 44% of total severance tax revenue of $671.32 million, with oil accounting for all but a sliver of the rest. This year through June revenue was $133.43 million from severance taxes on gas production, excluding the OCS.

Some of the additional revenue the parishes would receive would have to go to transportation infrastructure.

“With respect to the monies received by a parish under these new provisions, that portion of such revenues which is in excess of that received by the parish in fiscal year 2011-2012 would be considered ‘excess severance tax,'” according to a document prepared by House Legislative Services. “The parish would be required to spend 50% of its excess severance tax revenues for the same purposes as those received by the parish from the parish transportation fund.”

Taxes aren’t the only way the state and parishes benefit from producer activity. In the Haynesville Shale producer activity generated about $10.6 billion in new business sales within the state during 2009, according to a recent analysis. That’s more than four times the amount that a similar analysis found was generated during 2008 (see Daily GPI, June 7).

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