LOGA Industry Report - Fall 2008 - (Page 23)

Ad Valorem Taxes The Preparation Begins by Daron Fredrickson, Chesapeake Energy Corporation Reversion to the word “may” in the Final Rule implies that the adjustment for obsolescence is at the discretion of each assessor. LOGA contends that certain discretion for assessors is inherent in the determination of appraised value, as long as this discretion relates to legitimate, informed appraisal judgment. However, unlimited and arbitrary discretion, which certain assessors have interpreted from the word “may,” as determination of fair market value violates Article VII, Section 18 of the Louisiana Constitution and La. Rev. Stat. Ann § 47:2323(A), which require property to be valued at its fair market value in accordance with criteria established by law and applied uniformly throughout the state. LOGA is equally concerned with the manner in which the newly appointed Louisiana Tax Commission proceeded. Whether they agree or disagree with the substantive tax issue, there are laws safeguarding the processes and procedures by which ad valorem tax rules are promulgated, which appeared to have been ignored in this instance. The ﬁrst lawsuit seeks to have the court declare that the Emergency Rule as originally published in the December 20, 2007 Louisiana Register is valid and applicable to the assessment valuations prepared as of January 1, 2008. The second lawsuit seeks to have the court declare that the retroactive amendment effort and publication of the rule in the April 20, 2008 Louisiana Register violated the Administrative Procedures Act and are therefore invalid. Both lawsuits are efforts toward LOGA’s goal: to have the assessors and the Louisiana Tax Commission abide by the proper rules and procedures in valuing property for ad valorem tax purposes. Each year, along with the beautiful weather, summer brings another season of Louisiana Tax Commission (LTC) Rules and Regulation hearings. Both promise - and deliver - a lot of heated days. The constant theme this year in most states is to hit the energy sector with every tax increase possible. There is no separation in the minds of the taxing authorities between $4.00 gasoline and the independent oil and gas producer or service company. There is no reason to believe that the Louisiana Assessors’ Association and their consultants will do anything but attempt to dramatically increase the ad valorem assessments on all energy related properties. When one of the ﬁrst acts of the new LTC panel was to take away any gains made in the previous year, it caused a lot of concern as to what may happen in this year’s rule making. One thing is certain; it will be a hard ﬁght. Along with the presentation of data by industry representatives, the LOGA Ad Valorem Committee needs to have testimony by independent operators and service company owners. There must be a local, personal face that the LTC can see when making their rulings. We need several people who are willing to come to Baton Rouge and explain that the assessments are already too high. They need to understand that what they do impacts your decision about whether or not to drill and do business in Louisiana. If you are interested in coming to Baton Rouge and testifying to the LTC or in assisting the LOGA Ad Valorem Committee in any way, please contact Daron Fredrickson (daron.fredrickson@ chk.com) or Phil Zanco (pzanco@eplweb.com). Your input and assistance is always encouraged and welcome. www.loga.la | 23 http://www.loga.la

Table of Contents Feed for the Digital Edition of LOGA Industry Report - Fall 2008

LOGA Industry Report - Fall 2008 Contents Chairman's Corner President's Perspective Commissioner's Comments From the Pipeline... Supreme Court Upholds Act 312 LOGA Challenges Commission's Ad Valorem Tax Rules The Haynesville Shale - Waiting for the Gas to Come In 2008 Legislative Recap Gulf Coast Prospect Expo 2008 2nd Annual LAGCOE Open Golf Tournament Conservationist by Trade Katrina Relief Fund Update DNR Intent Natural Gas Production Surges: A Free Market At Work IPAA Washington Report Legal Updates New Members Index to Advertisers

LOGA Industry Report - Fall 2008

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