ABBEVILLE — The Vermilion Parish Police Jury passed a resolution Monday opposing a move by the Louisiana Oil and Gas Association and Louisiana Mid–Continent Oil and Gas Association to try to have the state reduce the value of subsurface oil and gas equipment.
The move was taken at the recommendation of Parish Tax Assessor Kathy Broussard, who said the move would hurt the parish financially.
“I am here to ask you to help our parish,” she said. “This proposition by LOGA and LMOGA that would exempt all subsurface equipment from taxation would cost the parish $5 million annually.”
The move passed without discussion or opposition. Jurors Dane Hebert, Mark Poche and Ronald Darby were absent.
In a telephone interview after Monday’s meeting, however, LOGA President Don Briggs said the move was not designed to hurt parishes financially.
He said years ago, the equipment had value when drill pipe and other equipment could be pulled out of a well and resold, but that is no longer the case.
The equipment is now often left in place because of environmental concerns and costs, offering no further value to oil and gas companies, Briggs said.
“According to the constitution of Louisiana, the value of subsurface equipment is what a buyer is willing to pay for it,” Briggs said. “Today, it has no value and it is no longer an asset but a liability.”
He said the equipment has traditionally been assessed at about 40 percent, but LOGA and LMOGA is only asking for a gradual reduction of that value over time to ease the tax burden.
“We’d like to see gradual reduction over time, say about 3 percent next year,” Briggs said. “Currently, we are paying $40 million to $50 million in taxes annually (as an industry) and the equipment has no value. We do not want to hurt parish tax rolls by doing away with the taxes, we are only looking to reduce them over time.”