LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 10, 1997 TO: Honorable Tom Craddick, Chair IN RE: Senate Bill No. 988, Committee Report 2nd House, as amended Committee on Ways & Means By: Brown House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB988 ( relating to reports required from certain producers and purchasers of oil.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB988-Committee Report 2nd House, as amended Implementing the provisions of the bill would result in a net positive impact of $3,710,000 to General Revenue Related Funds through the biennium ending August 31, 1999. Fiscal Analysis The bill would amend the Tax Code to require crude oil severance taxes to be reported at the lease level rather than the county level, thereby standardizing the reporting basis for oil and gas. Methodolgy The bill would change the basis for reporting the oil severance tax; the tax rate and revenue flow would not change. The Comptroller of Public Accounts estimates that improved audit procedures and tax reporting would generate additional state revenues equivalent to approximately one percent of total oil severance tax revenues. The probable fiscal implications of implementing the provisions of the bill during each of the first five years following passage are estimated as follows: Five Year Impact: Fiscal Year Probable Revenue Gain/(Loss) from General Revenue Fund 0001 1998 $0 1998 3,710,000 2000 3,650,000 2001 3,650,000 2002 3,650,000 Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $0 1999 3,710,000 2000 3,650,000 2001 3,650,000 2002 3,650,000 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. No fiscal implication to units of local government is anticipated. Source: Agencies: 304 Comptroller of Public Accounts LBB Staff: JK ,RR