LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                           May 5, 1995



 TO:     Honorable Tom Craddick, Chair          IN RE: Committee Substitute
         Committee on Ways & Means                           for House Bill
         House of Representatives               No. 1892
         Austin, Texas                                  By: Holzheauser








FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
1892 (relating to an exemption from the oil and gas production
taxes for hydrocarbons produced from wells that use new recovery
techniques; providing a civil penalty) this office has determined
the following:

The bill provides for severance tax exemptions for the production
of hydrocarbons (viz., gas, oil condensate, or other liquid
hydrocarbon produced from a well) from oil or gas wells that use
a new recovery technique. The term "new recovery technique"  is
defined as a hydrocarbon recovery technique determined by the
Railroad Commission that is a previously unproven recovery,
completion, or drilling technique that has a reasonable
possibility of increasing the ultimate recovery of hydrocarbons.

At this time, it is not possible to specify what  will be the
future "previously unproven recovery technique having a
reasonable possibility of increasing the recovery of
hydrocarbons,"  therefore the fiscal implications cannot be
determined.


The fiscal implication to  the State or units of local government
cannot be determined.


Source:   Comptroller of Public Accounts
          LBB Staff: JK, CT, DF