Presentation to the Louisiana Tax Commission 2011 Rules and Regulations Chapter 13 – Pipelines (local assessed) by Louisiana Oil and Gas Association and Louisiana Mid-Continent Oil and Gas Association June 22, 2010 Information included in this presentation is the same as submitted in writing June 4, 2010 to the Louisiana Tax Commission. This presentation is prepared only to facilitate the verbal presentation on June 22, 2010 as indicated in the LTC Docket Number RR-2011, Notice of Hearing.

LOGA/LMOGA Proposal for Cost Replacement Cost – Agree with replacement cost onshore schedule proposed by Pritchard & Abbott (for LAA). 15% of Cost Column – Delete this column. §1305 explains the appraisal process. The “15% of Cost” column is not applicable as 15% should be applied to appraised value at the end of the appraisal process. Industry reps. compared LAA’s proposed value. Procedure only.

LOGA / LMOGA Proposal for Depreciation No change from 2010 rules and regulations. Refer to the Summary for Chapter 13 for rationale of why we recommend no change in the depreciation factors.

LOGA / LMOGA Proposal for Obsolescence Revise §1305.F. as follows: Assessment will be based on fair market value. Functional and/or economic obsolescence shall be considered in the analysis of fair market value based on the most reliable information available to the assessor, including as substantiated by the taxpayer in writing. Consistent with Louisiana R.S. 47:1957, the assessor may request additional documentation. The existing language implies assessors are allowed to include obsolescence in their appraisals only when information has been received, in writing, from taxpayers. In practice, assessors routinely obtain relevant appraisal information from various sources. The additional language is intended to clarify an assessor shall recognize obsolescence in appraised values, when present, whether the reliable information is from the taxpayer or other reliable sources.

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