LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 16, 1995 TO: Honorable Tom Craddick, IN RE: Committee Substitute Chair for House Bill No. 398 Committee on Ways & Means House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 398 (relating to the temporary exemption of certain high-cost gas from Gas Production tax) this office has determined the following: This bill would extend the present gas production tax exemption for high-cost wells to those spudded or completed after May 24, 1989 and before September 1, 2006. Such wells would be exempt from the severance tax for the first 120 consecutive months of production, except that the 120 month period could begin no earlier than September 1, 1991. The bill would require producers to remit taxes when due on production high-cost wells spudded or completed between September 1, 1996 and August 31, 1997. On or after September 1, 1997, the operator would be eligible for a refund from the Comptroller's Office. These particular wells would also be exempt for a period of 120 consecutive months, including the period of production during the time September 1, 1996-August 31, 1997. The time for a certification application would be extended to August 31, 2006 and the period to request a refund to December 31, 1997. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Year Revenue Loss from General Revenue Fund 001 1996 $0 1997 0 1998 58,518,729 1999 55,040,793 2000 73,062,664 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The fiscal implication to units of local government cannot be determined. Source: Comptroller of Public Accounts LBB Staff: JK, CT, DF, RS _