Louisiana Amendment 2, Include Oil and Gas Value in Tax Assessment of Wells Amendment (2020)

Louisiana Amendment 2
Election date November 3, 2020
Topic Taxes and Natural resources
Status a Approved
Type Constitutional amendment	Origin State legislature
List of Louisiana measuresLouisiana Amendment 1Louisiana Amendment 2Louisiana Amendment 3Louisiana Amendment 4Louisiana Amendment 5Louisiana Amendment 6Louisiana Amendment 7Louisiana Allow for Out-of-State Members to the University Board of Supervisors AmendmentSubmit

Louisiana Amendment 2, the Include Oil and Gas Value in Tax Assessment of Wells Amendment, was on the ballot in Louisiana as a legislatively referred constitutional amendment on November 3, 2020. It was approved.

A "yes" vote supported this amendment to allow the presence or production of oil or gas to be taken into account when determining the fair market value of an oil or gas well for ad valorem taxes.

A "no" vote opposed taking the presence or production of oil or gas into account when determining the fair market value of an oil or gas well for ad valorem taxes.

Election results

Louisiana Amendment 2
Result		Votes	Percentage
Yes		1,158,766	58.34%
No		827,516	41.66%

Results are officially certified.

Source

Overview

What did Amendment 2 change?

See also: Measure text and constitutional changes

This amendment allowed the presence or production of oil or gas to be taken into account when assessing the fair market value of an oil or gas well for ad valorem property tax purposes.

How did Amendment 2 get on the ballot?

See also: Path to the ballot

In Louisiana, a two-thirds (66.67%) vote is needed in each chamber of the Louisiana State Legislature to refer a constitutional amendment to the ballot for voter consideration.

Rep. Mike Huval (R) introduced the constitutional amendment as House Bill 360 on February 27, 2020. On May 22, 2020, the Louisiana House of Representatives approved the constitutional amendment in a vote of 98-0. On May 29, 2020, the Louisiana State Senate passed the measure in a vote of 33-0.

Text of measure

Ballot title

The ballot title was as follows:

“

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? (Amends Article VII, Section 4(B))

”

Ballot summary

The ballot summary was as follows:

“

Present Constitution provides that taxes may be levied on natural resources severed from the soil or water to be paid proportionally by the owners at the time of severance. Present Constitution provides that natural resources may be classified for the purpose of taxation and may be predicated upon either the quantity or value of the products at the time and place of severance. Further provides that no further or additional tax or license shall be levied or imposed on oil, gas or sulphur leases or rights and no additional value shall be added to the assessment of land due to the presence of oil, gas or sulphur or their production therefrom. Proposed Constitutional Amendment retains the present constitution and provides that the presence of oil or gas or the production thereof may be included in the methodology to determine the fair market value of an oil or gas well for ad valorem taxes.

”

Constitutional changes

See also: Article I, Louisiana Constitution

The measure amended section 4(B) of Article VII of the Louisiana Constitution. The following underlined was added:

Section 4. (B) Severance Tax. (1) Taxes may be levied on natural resources severed from the soil or water, to be paid proportionately by the owners thereof at the time of severance. Natural resources may be classified for the purpose of taxation. Such taxes may be predicated upon either the quantity or value of the products at the time and place of severance. No further or additional tax or license shall be levied or imposed upon oil, gas, or sulphur leases or rights. No additional value shall be added to the assessment of land by reason of the presence of oil, gas, or sulphur therein or their production therefrom. However, sulphur in place shall be assessed for ad valorem taxation to the person, firm, or corporation having the right to mine or produce the same in the parish where located, at no more than twice the total assessed value of the physical property subject to taxation, excluding the assessed value of sulphur above ground, as is used in sulphur operations in such parish. Likewise, the severance tax shall be the only tax on timber; however, standing timber shall be liable equally with the land on which it stands for ad valorem taxes levied on the land. (2) Notwithstanding the provisions of Subparagraph (1) of this Paragraph, the presence of oil or gas or the production thereof, may be included in the methodology to determine the fair market value of an oil or gas well for ad valorem taxes.

Readability score

See also: Ballot measure readability scores, 2020

Using the Flesch-Kincaid Grade Level (FKGL and Flesch Reading Ease (FRE) formulas, Ballotpedia scored the readability of the ballot title and summary for this measure. Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The state legislature wrote the ballot language for this measure. The FKGL for the ballot title is grade level 8, and the FRE is 60. The word count for the ballot title is 45, and the estimated reading time is 12 seconds. The FKGL for the ballot summary is grade level 9, and the FRE is 52. The word count for the ballot summary is 153, and the estimated reading time is 40 seconds.

Support

Supporters

Officials

• State Representative Mike Huval (R)

Unions

• Louisiana Assessors’ Association
• Louisiana Mid-continent Oil and Gas Association
• Louisiana Oil and Gas Association

Arguments

• Public Affairs Research Council of Louisiana: The Public Affairs Research Council of Louisiana (PAR), a nonprofit organization, published arguments for and against each amendment on the ballot. PAR wrote the following argument in support of Amendment 2: "Assessors and the oil and gas industry came together to create this amendment after decades of disagreement. This amendment is narrow and does not affect severance taxes. The amendment only allows the income approach to be considered when assessing an oil or gas well, along with the market and cost approaches. It will mean that newer, richer wells will tend to be valued higher than older, poorer wells, which is not necessarily the case now. This change will give the local assessors and the Tax Commission the tools they need to assess wells logically and fairly. It could reduce litigation. It may lessen the unfair tax burden on some low producers. A mere statute will not suffice and there is no foreseeable resolution outside of a constitutional amendment. No one spoke against the amendment during committee hearings."
• Mike Moncla, interim president of the Louisiana Oil & Gas Association: "This amendment brings a fairness to the assessment process for the oil and gas industry, 90% of which consists of small businesses. When independent operators can reliably predict their costs, they can allocate more to supporting and expanding their workforce. Fairness and predictability lead to more investment."

Opposition

Ballotpedia did not identify committees, organizations, or individuals opposing the amendment. If you are aware of any opponents or opposing arguments, please send an email with a link to editor@ballotpedia.org.

Arguments

• Public Affairs Research Council of Louisiana: The Public Affairs Research Council of Louisiana (PAR), a nonprofit organization, published arguments for and against each amendment on the ballot. PAR wrote the following argument in opposition to Amendment 2: "Although assessors and the oil industry have said this change would not raise taxes, the Legislative Fiscal Office stated that any effect on local tax bases is speculative. Some parishes could receive more in property taxes while others could receive less as a result of this amendment. While the amendment allows a new assessment method, a better solution would be a broader and more fundamental change to create a Constitution that allows the Legislature more flexibility with state fiscal policy."

Campaign finance

The campaign finance information on this page reflects the most recently scheduled reports processed by Ballotpedia, which covered through December 3, 2020.

See also: Campaign finance requirements for Louisiana ballot measures

	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Support	$0.00	$0.00	$0.00	$0.00	$0.00
Oppose	$0.00	$0.00	$0.00	$0.00	$0.00

Ballotpedia did not identify any committees registered in support of or in opposition to the measure.

Background

Oil and gas production in Louisiana

According to the 2019 Louisiana Tax Commission Annual Report, the state had 52,674 oil and gas wells with an assessed value of $1.2 billion.

As of February 2020, Louisiana ranked ninth in the country for oil production with 115 thousand barrels per day. As of 2018, Louisiana ranked fourth in the country for natural gas production with 2,810,636 cubic feet.

Oil and gas severance taxes

See also: Severance tax

A severance tax is imposed on the extraction of energy resources such as crude oil, natural gas, and coalbed methane. The term is based on the concept that energy resources are severed from the ground after they are extracted from the ground. States levy severance taxes on energy producers, and different states impose different requirements related to the tax.

Louisiana imposes a gas severance tax, which is adjusted annually by the Secretary of the Department of Natural Resources by multiplying the minimum rate of 7 cents per 1,000 cubic feet by the gas base rate adjustment. As of July 1, 2019, the rate was 12.5 cents per 1,000 cubic feet. Louisiana also imposes an oil severance tax, which is 12.5 percent of its gross value at the time and place of its extraction.

Amendments on the ballot in Louisiana

See also: List of Louisiana ballot measures

The following statistics are based on legislatively referred constitutional amendments between 1995 and 2019 in Louisiana:

• Ballots featured 189 constitutional amendments.
  • Even-year ballots featured 121 constitutional amendments.
• An average of 10 measures appeared on even-year statewide ballots.
• The number of ballot measures on even-year statewide ballots ranged from four to 21.
• Voters approved 75 percent (141 of 189) and rejected 25 percent (48 of 189) of the constitutional amendments.

Legislatively-referred constitutional amendments, 1995-2018
Total number	Approved	Percent approved	Defeated	Percent defeated	Even-year average	Even-year median	Even-year minimum	Even-year maximum
189	141	74.6%	48	25.4%	10.1	8.0	4	21

Tax policies on the ballot in 2020

See also: Taxes on the ballot

In 2020, voters in 14 states voted on 21 ballot measures addressing tax-related policies. Ten of the measures addressed taxes on properties, three were related to income tax rates, two addressed tobacco taxes, one addressed business-related taxes, one addressed sales tax rates, one addressed fees and surcharges, and one was related to tax-increment financing (TIF).

Click Show to read details about the tax-related measures on statewide ballots in 2020.

Tax-related policy ballot measures in 2020

Income Tax a/ot Arizona Proposition 208: The campaign Invest in Education proposed the ballot initiative to enact a 3.50% income tax, in addition to the existing income tax (4.50% in 2020), on income above $250,000 (single filing) or $500,000 (joint filing). Proposition 208 was designed to distribute the revenue from the 3.50% income tax to teacher and classroom support staff salaries, retention programs, and career and technical education programs. a Colorado Proposition 116: In 1987, the state's income tax was changed from graduated rates to a flat rate. Going into 2020, that flat rate was 4.63%. The ballot initiative reduced the rate from 4.63% to 4.55%. d Illinois Allow for Graduated Income Tax Amendment: The Illinois State Legislature proposed this constitutional amendment to allow the state to enact legislation for a graduated income tax. Going into 2020, the state constitution required that the state personal income tax be a flat rate. Gov. J.B. Pritzker (D), who advocated for a graduated income tax during his gubernatorial campaign, was providing funds to the campaign backing the amendment. Business-Related Taxes d Alaska Ballot Measure 1: The campaign Vote Yes for Alaska's Fair Share proposed the ballot initiative to increase taxes on oil production fields located in Alaska's North Slope that exceeded certain output minimums. According to Robin Brena, chairperson of Vote Yes for Alaska's Fair Share, three oil production fields—Alpine, Kuparuk, and Prudhoe Bay—met those criteria. BP, Conoco Phillips, ExxonMobil, and Hilcorp Energy funded the campaign to defeat Measure 1. a Nebraska Initiative 431: The initiative was designed to impose an annual tax of 20% on gross gambling revenue of licensed gaming operators; distributing 2.5% of tax revenue to the Compulsive Gamblers Assistance Fund, 2.5% to the General Fund, 70% to the Property Tax Credit Cash Fund, and 25% to the counties where gambling is authorized at licensed racetracks. The initiative was one of three initiatives that together were designed to authorize, regulate, and tax gambling at racetracks in Nebraska. Property-Related Taxes d California Proposition 15: The ballot initiative would have amended Proposition 13 (1978), which required that residential, commercial, and industrial properties are taxed based on their purchase price, with an annual adjustment based on inflation or 2%, whichever was lower. Proposition 15 would have required commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value. In California, the proposal to assess taxes on commercial and industrial properties at market value, while continuing to assess taxes on residential properties based on the purchase price, is known as split roll. The state fiscal analyst estimated that Proposition 15 would generate between $6.5 billion and $11.5 billion. Proposition 15 would have required that the revenue be allocated to local governments and schools. a California Proposition 19: The state Legislature proposed the constitutional amendment as a compromise with the California Association of Realtors, which had qualified a different ballot initiative. Proposition 19 was designed to allow tax assessments to be transferred from someone's old home to their new home anywhere in the state and increased the number of times that tax assessments can be transferred from one to three for persons over 55 years old or with severe disabilities. Proposition 19 was also designed to require that inherited homes that are not used as principal residences, such as second homes or rentals, be reassessed at market value when transferred. a Colorado Amendment B: The constitutional amendment repealed the Gallagher Amendment (1982), which required a 45%-55% ratio between residential assessment rates and non-residential assessment rates regarding tax revenue. Therefore, Amendment B permitted the Colorado Legislature to define tax assessment limits without reference to the 45%-55% ratio requirement. In Florida, Georgia, Louisiana, New Jersey, and Virginia, voters also decided eight ballot measures related to exemptions, adjustments, and payments: Florida Amendment 5, Florida Amendment 6, Referendum A, Louisiana Amendment 2, Louisiana Amendment 5, Louisiana Amendment 6, New Jersey Question 2, and Virginia Question 2. Sales Tax a Arkansas Issue 1: The ballot measure continued an existing a 0.5% sales tax, with revenue dedicated to roads, highways, and bridges. Going into 2020, the tax was set to expire in 2023. Issue 1 had the support of Gov. Asa Hutchinson (R), and the campaign behind Issue 1 received financial support from Alice and Jim Walton. Tobacco a Colorado Proposition EE: The ballot measure increased the tax rate on cigarettes from 84 cents per pack to $2.64 per pack and the tax rate on tobacco products from 40% of the manufacturer's list price to 62% of the manufacturer's list price. The ballot measure created a tax on nicotine products, such as e-cigarettes, with scheduled increases over seven years to 62% of the manufacturer's list price. Revenue from the tax increases was dedicated to preschool, education, housing, and the General Fund. a Oregon Measure 108: The ballot measure increased the cigarette tax from $1.33 to $3.33 per pack. The ballot measure also taxed e-cigarettes and other nicotine inhalants at a rate of 65% of the wholesale sales price and cigars at 65% of the wholesale sales price (but not to exceed $1.00 per cigar). Measure 108 dedicated revenue from the tax increases to the Oregon Health Authority. Fees a Colorado Proposition 117: In 1992, the Colorado Taxpayer's Bill of Rights (TABOR) Amendment defined government-owned firms that provide goods or services for a fee as enterprises. Examples of enterprises include state nursing homes, state lotteries, Colorado Correctional Industries, and College Assist. The ballot measure was designed to require voter approval of laws that create new enterprises should the enterprise's projected or actual revenue from fees and surcharges exceed $100 million within the first five years. TIF a Nebraska Amendment 2: The constitutional amendment increased the repayment period for tax increment financing from 15 to 20 years for areas where more than one-half of properties are designated as extremely blighted.

Path to the ballot

See also: Amending the Louisiana Constitution

In Louisiana, a two-thirds vote is needed in each chamber of the Louisiana State Legislature to refer a constitutional amendment to the ballot for voter consideration.

Rep. Mike Huval (R) introduced Amendment 2 as House Bill 360 on February 27, 2020. On May 22, 2020, the Louisiana House of Representatives approved the constitutional amendment in a vote of 98-0 with six representatives absent or not voting and one vacancy. On May 29, 2020, the Louisiana State Senate passed the measure in a vote of 33-0 with six Democratic Senators absent or not voting.

Vote in the Louisiana House of Representatives May 22, 2020
Requirement: Two-thirds (66.67 percent) vote of all members in each chamber
Number of yes votes required: 70  a
	Yes	No	Not voting
Total	98	0	6
Total percent	94.23%	0.00%	5.77%
Democrat	30	0	5
Republican	66	0	1
Independent	2	0	0

Vote in the Louisiana State Senate May 29, 2020
Requirement: Two-thirds (66.67 percent) vote of all members in each chamber
	Yes	No	Not voting
Total	33	0	6
Total percent	84.6%	0.00%	15.4%
Democrat	6	0	6
Republican	27	0	0

How to cast a vote

See also: Voting in Louisiana

Click "Show" to learn more about voter registration, identification requirements, and poll times in Louisiana.

How to cast a vote in Louisiana

The information below covers regular voting policies in the state. Information may have not applied to the election on November 3, 2020, because of temporary changes in response to coronavirus. Click here to read about changes made for the 2020 elections. Poll times In Louisiana, polls are open from 6:00 a.m. to 8:00 p.m. Central time for Tuesday elections. For Saturday elections, polls open at 7:00 a.m. If the polls close while a voter is in line, he or she will still be permitted to vote. Registration Check your voter registration status here. To vote in Louisiana, one must be a United States citizen who resides in the state and parish in which he or she registers. A voter must be at least 18 years old by Election Day. Registration completed via mail or in person must occur at least 30 days before Election Day. Registration completed online must occur at least 20 days before Election Day. Registrants must present a valid form of identification to register. Pre-registration is available beginning at age 16. Voters may register in person at any Registrar of Voters office or any of the following places: Louisiana Office of Motor Vehicles Louisiana Department of Social Services WIC offices Food stamp offices Medicaid offices Offices and agencies serving people with disabilities Military recruitment offices Automatic registration Louisiana does not practice automatic voter registration. Online registration See also: Online voter registration Louisiana has implemented an online voter registration system. Residents can register to vote by visiting this website. Same-day registration Louisiana does not allow same-day voter registration. Residency requirements Louisiana law requires 20 days of residency in the state before a person may vote. Verification of citizenship See also: Laws permitting noncitizens to vote in the United States Louisiana does not require proof of citizenship for voter registration. Verifying your registration The site Geaux Vote, run by the Louisiana Secretary of State office, allows residents to check their voter registration status online. Voter ID requirements Louisiana requires voters to present photo identification while voting. Voters can present the following forms of identification. This list was current as of April 11, 2023. Click here to ensure you have the most current information. Louisiana driver's license Louisiana special identification card LA Wallet digital driver's license Other generally recognized picture identification card that contains the name and signature of the voter Voters who do not have accepted ID may vote by completing a voter identification affidavit. By law, voters who sign an affidavit may be challenged. Registered voters can bring their voter information card to the Office of Motor Vehicles to receive a free Louisiana special identification card.

See also

2020 measures

• 2020 ballot measures
• Taxes on the ballot
• Natural resources on the ballot
• 2020 legislative sessions

Louisiana

• Louisiana ballot measures
• Louisiana ballot measure laws

News and analysis

• Ballot measure lawsuits
• Ballot measure readability
• Ballot measure polls

External links

• Louisiana Amendment 2 (2020)
• Nov. 3, 2020 Constitutional Amendments Summaries