Texas Senate Bill SJR21

Texas 2019 - 86th Regular

Caption

Proposing a constitutional amendment to provide for foregoing the transfer of oil and gas production tax revenue to the economic stabilization fund if the ending fund balance for the preceding fiscal year is greater than 10 percent of the prior fiscal year's total net general revenue related collections and for reducing the rates of oil and gas production taxes by amounts sufficient to equal the foregone transfer.

Impact

If enacted, SJR21 would significantly impact Texas's financial landscape by potentially reducing the amounts allocated to the economic stabilization fund, therefore diverting resources towards the state highway fund instead. This change aims to bolster funds available for public roadways, reflecting a strategic investment in infrastructure. The amendment also indicates a shift in tax policy concerning resource extraction, influencing the state's overall economic strategy and fiscal stability.

Summary

SJR21 proposes a constitutional amendment that would alter the management of oil and gas production tax revenue within Texas. Specifically, the bill seeks to exempt the transfer of such revenue to the economic stabilization fund if the ending balance of that fund for the previous fiscal year exceeds 10% of the prior year's total net general revenue collections. Furthermore, it introduces provisions to reduce the rates of production taxes on oil and gas in amounts that correspond to the revenue that would have been transferred under normal circumstances.

Contention

There may be points of contention surrounding this bill, particularly regarding the financial implications of foregoing transfers to the economic stabilization fund. Proponents argue that the measure enables more immediate investment in public infrastructure. However, opponents might raise concerns regarding the long-term financial health of the stabilization fund and its intended purpose, which is to safeguard against economic downturns. The debate will most likely center on balancing immediate infrastructural needs with the long-term fiscal strategy of the state.