May 22, 2017 11:49 AM

HB49 would enable the state to hire more auditors to monitor oil and gas revenue from state-owned lands and water bottoms

The House will consider Rep. Stuart Bishop's HB49 when it convenes Monday afternoon at 4. The bill would direct $900,000 of the revenue generated from legal settlements over oil and gas taxes and royalty payments to be used to hire more auditors to ensure the state is getting the money it is owed.
Rep. Stuart Bishop
Photo by Robin May

The bill won approval from the House Appropriations Committee on May 15.

The bill is essentially a pilot program that will be in place for four years. Over that time, according to the Fiscal Note attached to the bill, the Office of Mineral Resources will hire four auditors and four other positions (an engineer, a geologist, a land specialist and an administrative assistant) to beef up the office's oversight of state revenue collections from oil and gas leases on public lands.

Auditing state royalties and severance taxes has been a sore point in the performance of the Office of Mineral Resources for a number of years, according to reports from the Louisiana Legislative Auditor. A 2010 report found inadequacies in the percentage of royalties that were audited. A 2013 report from the Legislative Auditor questioned why the state Mineral and Energy Board, which awards leases and supervises the collection of royalty and severance tax payments, was not as aggressive as boards in other states in pursuing the state's interests.

Another 2013 report from the auditor found that when severance tax audit authority was transferred from the Department of Revenue to DNR's OMR, severance tax audit activity on privately owned lands ground to a halt for three years until the authority went back to DoR. Estimates are that the state could have lost hundreds of millions of dollars in severance tax revenue between 2010 and 2013 when OMR had severance tax audit authority.

David Boulet
Photo by Robin May

David Boulet was hired as assistant secretary of DNR to oversee the overhaul of OMR by Secretary Tom Harris in 2016. The Independent learned today that Boulet is leaving the department to return to the private sector. We will have more news on this story later today.

Bishop's bill would enable OMR to expand its audit capacity over the nearly 1,900 oil and gas leases on some 840,000 acres of state-owned lands and water bottoms.

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