American Oil and Gas Reporter - May 2016 - 14

IndustryDigest
Louisiana Votes To Cut
Sales Tax Exemptions
To Reduce State Deficit
BATON ROUGE, LA.-Louisiana's
budget deficit has shrunk, but the state's
continuing dire economic outlook is
leading legislators to keep hunting for
revenue sources, says Camille IvyO'Donnell, coordinator of media and
government affairs for the Louisiana Oil
& Gas Association.
Early this year, Louisiana faced a
projected $900 million budget gap for
fiscal 2016 and as much as a $1.5
billion shortfall next year, but during its
2016 First Extraordinary Session, which
concluded in March, legislators and
state officials were able to eliminate the
current deficit and cut next year's to
$600 million, Ivy-O'Donnell says.
However, she notes, to raise the needed
revenues, Louisiana increased sales
taxes in several categories and
eliminated statutory exemptions for
others.
Two bills-HB 61 by Representative
John "Jay" Morris, R-Monroe, and HB
62, by Representative Katrina Jackson,
D-Monroe-revise the list of statutory
sales tax exemptions, Ivy-O'Donnell
says. Both pieces of legislation went
into effect April 1, but she reports at
midmonth, the state Department of
Revenue still was analyzing the
exemptions and weighing their impacts
on taxes.
Although the oil and gas industry
was not targeted specifically, IvyO'Donnell says the legislation includes
more than 20 categories of exemptions
with the potential to affect oil and gas
operators. She cites one revision
regarding certain custom computer
software as an example of exemptions
not having an obvious impact on the
industry.
"The computer software exemption
goes from a zero percent tax to 5
percent, and is effective until this June.
That would impact any automated rig
that has custom software, as well as the
repair of that custom software," she
says. "Rig automation is a pretty
significant part of the industry now.
That 5 percent will drop to 3 percent on
July 1, and will continue to June 30,
2018, when it drops back to zero."
Many of the taxable rates follow
similar patterns over the next three
years, she points out, although a small
14 THE AMERICAN OIL & GAS REPORTER

number, such as the sales of steam,
water and electricity for nonresidential
use, remain at a 1 percent level instead
of zeroing out.
"LOGA's hope is that these taxes
will be removed. As of right now,
reading these documents, they will taper
off after time," Ivy-O'Donnell says. "I
can't speak for legislators as to whether
they have any plans otherwise. The
sales tax changes will increase the costs
of all production in Louisiana. The
industry is struggling as it is, so having
to pay more on top of everything
producers already are paying makes it
more difficult." ❒

USFWS Begins Review
Of Endangered Status
For Burying Beetles
WASHINGTON-The U.S. Fish &
Wildlife Service will review whether the
American burying beetle should no
longer be listed as endangered. The
agency says it has received petitions
concerning 16 species affected by the
Endangered Species Act. Twelve seek a
species listing, three recommend delisting
and one recommends an uplist from
threatened to endangered status. The
agency ruled that 13 petitions, including
the burying beetle, merited reviews.
The American burying beetle
delisting petition came from the
Independent Petroleum Association of
America, American Stewards of Liberty,
Texas Public Policy Foundation, and
Steven W. Carothers of SWCA
Environmental Consultants. Issues
raised in the petition include
uncertainties about the insect's
population trends, distribution and
threats impacting the species (AOGR,
March 2016, pg. 18).
In response to that petition, USFWS
says it is publishing a substantial 90-day
finding, the first step in determining if
ESA protection is warranted. A finding
that supports delisting would lead to a
12-month review process, which began
with the May 16 Federal Register notice
announcing the ESA review, the agency
says.
USFWS listed the American burying
beetle in 1989, in part because of claims
it had disappeared from 90 percent of its
former range across eastern North
America, the delisting petition says,
adding that "scientifically defensible,

rangewide studies of presence/absence or
abundance have never been completed"
for the species. While anecdotal evidence
of a decline exists, the industry group
points out there is no evidence the beetle
is in danger of extinction across its
contemporary range.
The petition also argues USFWS did
not have adequate information on
threats acting on the species. The group
says addressing the erroneous listing
quickly is of prime importance to the
petitioners.
Some members of the group say they
see the listing as causing significant
economic harm, reporting several land
development, agricultural,
transportation or pipeline projects have
been delayed or restricted because of
the beetle's presence. Oklahoma has
spent $6.5 million in protection efforts
over the past 20 years, the petition
states. The beetle's listing also has been
linked in part to delayed development of
the Keystone XL Pipeline.
USFWS notes that it has updated the
known range of the burying beetle in
Oklahoma with 2015 survey findings
that show populations along the eastern
and western edges of the species' range.
Since 2015, USFWS says, the known
range in Oklahoma has increased by
999,511 acres, a 5.3 percent jump. ❒

USFWS Narrows Its Plan
To Restrict ESA Petitions
WASHINGTON-The U.S. Fish &
Wildlife Service is back-pedaling on
changes it proposed a year ago to its
Endangered Species Act listing petition
process in order to "reduce some of the
burdens the initial proposal placed on
petitioners," according to Director Dan
Ashe.
In May 2015, USFWS and the
National Marine Fisheries Service
announced a plan to revise the ESA
petitioning process to increase the
involvement of state wildlife agencies in
decisions to add or remove species
(AOGR, June 2015, pg. 39). At that
time, Ashe said the proposed changes
"would result in a more nimble,
transparent and ultimately more
effective ESA," as well as "ensure the
limited resources of state and federal
agencies are spent actually protecting
and restoring imperiled species."
But after listening to feedback from
the public and stakeholder groups, Ashe
American Oil and Gas Reporter - May 2016

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