LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 23, 1995 TO: Honorable Tom Craddick, Chair IN RE: Committee Substitute Committee on Ways & Means for House of Representatives House Bill Austin, Texas No. 676 FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 676 (relating to a tax exemption for hydrocarbon production from certain inactive oil and gas leases returned to production) this office has determined the following: The bill would continue for two more years the mineral severance tax exemption given to three-year inactive wells. Production of oil and gas from wells certified would be exempt from taxation for a period of 10 years. The bill would authorize a period from Sept. 1, 1995 through Aug. 31, 1997 for certification application to the Railroad Commission. Lastly, the bill makes tax exempt the condensate produced from certified wells. 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 Revenue Administrative Year Loss from General Cost to the Revenue Fund 001 Comptroller's Office from General Revenue Fund 001 1996 $455,000 $75,200 1997 457,000 75,200 1998 458,000 1999 457,000 2000 457,000 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