LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session May 20, 1995 TO: Honorable John T. Montford, Chair IN RE: Committee Substitute Committee on Finance forHouse Bill Senate No. 676 Austin, Texas By: Craddick 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 from such wells would be exempted from severance taxes for ten years. The bill would authorize a period from September 1, 1995 through August 31, 1997 for certification application to the Railroad Commission. The bill would extend the tax exemption to include condensate produced from certified wells. In addition the Comptroller's Office and the Railroad Commission would be required to conduct a study, using existing staff and funding, of the overall impact of regulations and tax incentives upon the state's petroleum production and mineral industry. Upon completion of the study, the two agencies would submit their findings and recommendation to appropriate legislative and regulatory agencies. No significant fiscal implication to the State is anticipated. No fiscal implication to units of local government is anticipated. Source: Comptroller of Public Accounts, Railroad Commission LBB Staff: JK, CT, DF