LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION March 2, 2015 TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB757 by Perry (Relating to the repeal of the production taxes on crude petroleum and sulphur.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB757, As Introduced: a negative impact of ($10,947,000) through the biennium ending August 31, 2017.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
March 2, 2015
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB757 by Perry (Relating to the repeal of the production taxes on crude petroleum and sulphur.), As Introduced
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: SB757 by Perry (Relating to the repeal of the production taxes on crude petroleum and sulphur.), As Introduced
Honorable Jane Nelson, Chair, Senate Committee on Finance
Honorable Jane Nelson, Chair, Senate Committee on Finance
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
SB757 by Perry (Relating to the repeal of the production taxes on crude petroleum and sulphur.), As Introduced
SB757 by Perry (Relating to the repeal of the production taxes on crude petroleum and sulphur.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB757, As Introduced: a negative impact of ($10,947,000) through the biennium ending August 31, 2017.
Estimated Two-year Net Impact to General Revenue Related Funds for SB757, As Introduced: a negative impact of ($10,947,000) through the biennium ending August 31, 2017.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($5,374,000) 2017 ($5,573,000) 2018 ($5,572,000) 2019 ($5,672,000) 2020 ($5,724,000)
2016 ($5,374,000)
2017 ($5,573,000)
2018 ($5,572,000)
2019 ($5,672,000)
2020 ($5,724,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromFoundation School Fund193 2016 ($4,437,750) ($936,250) 2017 ($4,624,250) ($948,750) 2018 ($4,611,000) ($961,000) 2019 ($4,698,750) ($973,250) 2020 ($4,738,250) ($985,750)
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromFoundation School Fund193 2016 ($4,437,750) ($936,250) 2017 ($4,624,250) ($948,750) 2018 ($4,611,000) ($961,000) 2019 ($4,698,750) ($973,250) 2020 ($4,738,250) ($985,750)
2016 ($4,437,750) ($936,250)
2017 ($4,624,250) ($948,750)
2018 ($4,611,000) ($961,000)
2019 ($4,698,750) ($973,250)
2020 ($4,738,250) ($985,750)
Fiscal Analysis
The bill would amend Chapter 81 of the Natural Resources Code to abolish the oil regulation tax on crude oil produced in this state. The bill would also amend Chapter 203 of the Tax Code to abolish the sulphur production tax on sulphur produced in this state. The bill would take effect September 1, 2015.
Methodology
The oil regulation tax in the amount of three-sixteenths of one cent on each barrel of crude oil produced from the state would be abolished. The severance tax on sulphur in the amount of $1.03 a long ton or fraction of a long ton of sulphur produced in this state would be abolished. The fiscal impact estimates were based on the 2016-17 Biennial Revenue Estimate. The sulphur production tax is an occupation tax, thus 25 percent of the tax is constitutionally dedicated to the Foundation School Fund. This revenue loss from the Foundation School Fund is displayed in the above table. The Comptroller's office has indicated that repealing the oil regulation and sulphur production taxes, when combined with the repeal of taxes on liquefied gas, controlled substances, inheritances, and fireworks, will allow the Comptroller to redeploy resources to audit and enforcement activities for other sources of revenue. It is expected that redeploying these resources will generate revenue sufficient to offset revenue lost from repealing oil regulation and sulphur production taxes.
The oil regulation tax in the amount of three-sixteenths of one cent on each barrel of crude oil produced from the state would be abolished. The severance tax on sulphur in the amount of $1.03 a long ton or fraction of a long ton of sulphur produced in this state would be abolished. The fiscal impact estimates were based on the 2016-17 Biennial Revenue Estimate.
The sulphur production tax is an occupation tax, thus 25 percent of the tax is constitutionally dedicated to the Foundation School Fund. This revenue loss from the Foundation School Fund is displayed in the above table.
The Comptroller's office has indicated that repealing the oil regulation and sulphur production taxes, when combined with the repeal of taxes on liquefied gas, controlled substances, inheritances, and fireworks, will allow the Comptroller to redeploy resources to audit and enforcement activities for other sources of revenue. It is expected that redeploying these resources will generate revenue sufficient to offset revenue lost from repealing oil regulation and sulphur production taxes.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD
UP, KK, SD