LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION April 25, 2017 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3201 by Darby (Relating to the designation of a well as a two-year inactive well or three-year inactive well for purposes of the oil and gas severance tax exemption.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3201, As Introduced: a negative impact of ($3,226,000) through the biennium ending August 31, 2019.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
April 25, 2017
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3201 by Darby (Relating to the designation of a well as a two-year inactive well or three-year inactive well for purposes of the oil and gas severance tax exemption.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB3201 by Darby (Relating to the designation of a well as a two-year inactive well or three-year inactive well for purposes of the oil and gas severance tax exemption.), As Introduced
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB3201 by Darby (Relating to the designation of a well as a two-year inactive well or three-year inactive well for purposes of the oil and gas severance tax exemption.), As Introduced
HB3201 by Darby (Relating to the designation of a well as a two-year inactive well or three-year inactive well for purposes of the oil and gas severance tax exemption.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3201, As Introduced: a negative impact of ($3,226,000) through the biennium ending August 31, 2019.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3201, As Introduced: a negative impact of ($3,226,000) through the biennium ending August 31, 2019.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2018 ($1,236,000) 2019 ($1,990,000) 2020 ($4,992,000) 2021 ($5,811,000) 2022 ($7,031,000)
2018 ($1,236,000)
2019 ($1,990,000)
2020 ($4,992,000)
2021 ($5,811,000)
2022 ($7,031,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromFoundation School Fund193 Probable Savings fromGeneral Revenue Fund1 Probable Revenue (Loss) fromState Highway Fund6 2018 ($927,000) ($309,000) $0 $0 2019 ($2,188,000) ($729,000) $927,000 ($463,000) 2020 ($5,385,000) ($1,795,000) $2,188,000 ($1,094,000) 2021 ($8,397,000) ($2,799,000) $5,385,000 ($2,693,000) 2022 ($11,571,000) ($3,857,000) $8,397,000 ($4,198,000) Fiscal Year Probable Revenue (Loss) fromEconomic Stabilization Fund599 2018 $0 2019 ($463,000) 2020 ($1,094,000) 2021 ($2,693,000) 2022 ($4,198,000)
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromFoundation School Fund193 Probable Savings fromGeneral Revenue Fund1 Probable Revenue (Loss) fromState Highway Fund6 2018 ($927,000) ($309,000) $0 $0 2019 ($2,188,000) ($729,000) $927,000 ($463,000) 2020 ($5,385,000) ($1,795,000) $2,188,000 ($1,094,000) 2021 ($8,397,000) ($2,799,000) $5,385,000 ($2,693,000) 2022 ($11,571,000) ($3,857,000) $8,397,000 ($4,198,000)
2018 ($927,000) ($309,000) $0 $0
2019 ($2,188,000) ($729,000) $927,000 ($463,000)
2020 ($5,385,000) ($1,795,000) $2,188,000 ($1,094,000)
2021 ($8,397,000) ($2,799,000) $5,385,000 ($2,693,000)
2022 ($11,571,000) ($3,857,000) $8,397,000 ($4,198,000)
Fiscal Year Probable Revenue (Loss) fromEconomic Stabilization Fund599 2018 $0 2019 ($463,000) 2020 ($1,094,000) 2021 ($2,693,000) 2022 ($4,198,000)
2018 $0
2019 ($463,000)
2020 ($1,094,000)
2021 ($2,693,000)
2022 ($4,198,000)
Fiscal Analysis
The bill would amend Section 202.056 of the Tax Code to make permanent the two-year inactive well exemptions for oil and natural gas production taxes by removing the deadlines for the application submission and the designation of the wells by the Railroad Commission (RRC.) The bill would remove from this section references to the expired three-year inactive well exemptions for oil and natural gas production taxes, which were last certified by the RRC in 1996. The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect on the 91st day after the last day of the legislative session.
Methodology
The fiscal impact analysis is based on the Comptroller's oil and natural gas production taxes data and the 2018-19 Biennial Revenue Estimate. The fiscal impact reflects the buildup of the population of qualified inactive wells for the next 10 years beginning in fiscal 2018.
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
UP, KK