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