State Rep. Phillip DeVillier said he is frustrated by Gov. John Bel Edwards’ veto of his bill intended to spur oil and gas activity.
The governor vetoed his House Bill 29 on Wednesday.
DeVillier said, “The bill was obviously to do what we can to put people back to work. We received multiple letters after this bill was passed that were sent to the governor from industry saying in fact if the legislation would become law they would put quite a few people back to work in our state.”
The bill provided severance tax exemptions and incentives for the oil and gas industry.
“It frustrates me that the governor is so far out of touch with the people of this state. When you look at the unemployment rate, when you look at how many people are struggling today, how many people are having to leave our state to go to work. I mean, I just don’t understand why he doesn’t see this and really work along with us to try to get people back to work,” DeVillier said on Friday.
DeVillier represents District 41 that includes Eunice and most of rural Acadia Parish above Interstate 10.
The veto questioned the mechanics of the bill and the vetting.
“Well-vetted tax legislation would have foreseen and addressed these types of technical issues; instead House Bill 29 creates compliance uncertainty for operators and administrative burdens for the departments of state government,” Edwards stated.
DeVillier said the legislation was thoroughly vetted in “hours and hours” of committee session and floor debate.
Edwards stated said there was no testimony other from those with a vested interest.
The legislation was supported by the industry.
As the bill waited for a decision by the governor, Louisiana Oil and Gas Association interim President Mike Moncla said. “When industry suffers, so does the state. Unemployment ratchets up, other businesses grind to a halt, and local governments suffer too when drilling activity ceases. This bill will increase activity and give operators some much needed incentives that will help put Louisiana’s oil and gas industry back to work.”
The association stated it appreciates DeVillier’s work on the legislation along with Sen. Rick Ward, R-Port Alen.
“We owe a debt of gratitude to Rep. DeVillier and Sen. Ward, who both understand how critical it is for industry to get activity going again in the state,” Moncla said. “The governor’s support on kick-starting the economy when 2020 has been a double whammy for oil and gas is crucial and we look forward to working with him to get HB 29 passed.”
DeVillier shared an email from Tyler Gray, who serves as president and general counsel to Louisiana Mid-Continent’s Oil and Gas Association, that explains:
“HB 29 incentivizes capital investment in Louisiana. It creates a severance tax exemption on oil for any newly drilled well, a completed well undergoing enhancements, or an orphan well. Each exemption is narrowly tailored, lasting 12-months for new wells, six-months for recompleted wells, 24-months for orphan wells or until payout, whichever comes first. The exemption will be available on or after January 1, 2021 ending on December 31, 2023. Lastly, an operator can be reimbursed by the State for plugging and abandoning an orphan well that doesn’t produce in paying quantities.”
Edwards ended his veto message with, “Lastly, this bill was one of several bills introduced in this most recent session unrelated to the ostensible and claimed reason for the session — COVID-19 response and hurricane recovery. There will be a fiscal session of the Legislature in the Spring of 2021 where this plan, and other tax measures can be fully debated and considered. I look forward to continuing discussions with industry representatives about way that we can continue to make Louisiana competitive for our oil and gas partners.”
