Article by Ernest L. Edwards, Deborah F. Zehner, and B. Richard Moore, Jr.
In recent years the deterioration of Louisiana's marshes, barrier islands, and coastal zone has assumed critical importance to the residents of this state. There can be no doubt that the protection and enhancement of Louisiana's coastal wetlands is vital to the continued prosperity of the state and of its inhabitants. The sole issue, expressed in its most simplistic terms, is the identification and implementation of the best available means to preserve Louisiana's most valuable resource—its natural bounty.
Superimposed upon the concern for preservation of the state's unique coastal area is the collision course to which Louisiana has become irretrievably bound by virtue of changes in the state's tax structure since 1972. Louisiana's constitution mandates a balanced budget, and when faced with the need to raise taxes to generate additional revenues over the past ten years, the state legislature has too often chosen political expediency over logic and common sense; without fail, it has imposed or increased taxes on corporate and business affairs, and the oil and gas industry in particular. Increased reliance on oil and gas severance taxes now leaves the state with a dwindling resource base and a huge fiscal deficit, which is of particular concern in view of both declining production of and prices for oil and natural gas. Even the state's own economic consultants have recently emphasized the folly of continued reliance on energy-based tax revenues. Nonetheless since homeowners vote and oil and natural gas pipeline companies do not, the legislature enacted in 1978 the so-called First Use Tax on Natural Gas (First Use Tax), and Governor Treen recently proposed the Coastal Wetlands Environmental Levy (CWEL) in 1982. Both measures levied taxes on the movement of natural resources in interstate commerce, and both sought to export the burden of taxation to citizens of states other than Louisiana.
In each instance, the preamble to the legislation heralded the tax as a means of compensating Louisiana for the environmental harm to and the effect upon the social infrastructures of its coastal areas as a result of the construction of pipelines for the transportation of natural gas in one instance (First Use Tax), and oil and gas in the other (CWEL). The United States Supreme Court saw through the former and held the First Use Tax unconstitutional. As will be discussed later, the Court clearly will do likewise if CWEL is enacted, as surely it will be if political expediency remains the driving force behind tax revenue measures.
This article will demonstrate not only that tax measures such as CWEL are patently unconstitutional attempts to tax interstate commerce, but that taxation is not an appropriate, let alone the best, means of regulating the use of pipelines in Louisiana's coastal zone. The State and Local Coastal Resources Management Act of 1978 (Coastal Resources Management Act), on the other hand, provides an excellent statutory and regulatory framework within which to regulate and to control the construction and operation of coastal zone pipelines, all in a manner consistent with environmentally sound maintenance of those wetlands. Legislative attention should be focused upon strengthening that measure and not upon a tax such as CWEL, if as stated, the true purpose of that latter proposal is to enhance protection of Louisiana's environment.
About the Author
Ernest L. Edwards. B.A 1966, Tulane University; J.D. 1968, Tulane University; LL.M. 1970, University of Manchester, England. Partner, Lemle, Kelleher & Matthews, New Orleans, Louisiana. Mr. Edwards was trial counsel in Maryland v. Louisiana and chief legal counsel for pipeline and industrial opposition to CWEL before the Louisiana Legislature in 1982.
Deborah F. Zehner. B.A. 1973, University of New Orleans; J.D. 1977, Loyola University. Partner, Lemle, Kelleher, Kohlmeyer & Matthews, New Orleans, Louisiana.
B. Richard Moore, Jr. B.A. 1977, University of New Orleans; J.D. 1980, Tulane University. Associate, Lemle, Kelleher, Kohlmeyer & Matthews, New Orleans, Louisiana.
Citation
58 Tul. L. Rev. 215 (1983)