I attended the Louisiana Mid-Continent Oil and Gas Association's Annual 
Post-Session Legislative Meeting, July 9 - 12.

Presentations were made by Louisiana Representatives Damico, Daniel, 
Montgomery, Pierre; Senators Barham, Theunissen; and Governor Foster's Deputy 
Chief of Staff covering the 2001 session, the upcoming special session in 
October and next year's "Fiscal Only" Session.

Although the vast majority of issues of interest to the industry were dealt 
with without much media attention, three issues - retail gasoline pricing, 
water policy management and the processing tax - received considerable media 
attention. 

Except as noted below, no legislation actively opposed by the oil and gas 
industry survived the legislative process.

The only setback for the industry dealt with legislation brought by an array 
of local government groups - police jurors, school boards, sheriffs, 
assessors and municipalities - in response to the continuing controversy over 
the parish property taxes paid by interstate pipeline companies. As part of 
the dispute, many pipeline companies have paid a portion of their taxes under 
protest - and that portion paid under protest, prior to passage of SB 1046, 
could not be budgeted or spent by local governments. While the passage of SB 
1046 will allow parish governing bodies to spend the protested taxes, a 
number of amendments offered by supporters of industry and taxpayer fairness 
were adopted that will work to assure that the taxpayers will get their money 
back in a timely manner if they prevail.

Although the Public Service Commission has the authority to open up the 
electric market to competition, the Legislature recognizes the importance of 
additional generation capacity and passed legislation urging the LA. Dept. of 
Economic Development to explore ways, including possible incentives, to 
encourage additional unregulated electric generation to be developed in 
Louisiana.

Water management received a lot of attention due to several plans for 
generating plants that would use groundwater (unlike Enron's plans to use 
surface water). SB 965 creates a Ground Water Management Commission that has 
the authority to define critical areas and regulate withdrawals in those 
areas. It also creates a Ground Water Advisory Task Force that provides for 
local and industry participation.

As far as the upcoming special session and the 2002 session are concerned, 
taxes will be in the forefront, including the much- dreaded processing tax , 
which would cost Enron about $50 million. According to the participating 
legislators and the Governor's staff, the processing tax is gaining momentum 
because of Sen. Foster Campbell persistence in bringing it up year after year 
and his promises that the processing tax will take care of Louisiana's budget 
problems. The industry will continue to vigorously oppose this tax.

Donald, Gavin and Jerry - I am sending you a summary of Louisiana Legislative 
Bills pertaining to the energy industry.