LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 10, 1997
TO: Honorable Tom Craddick, Chair IN RE: Senate Bill No. 1407,
As Engrossed
Committee on Ways & Means By: Lucio
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB1407 ( Amending
section 201.507 of the State Taxation Code, and relating to
temporary exemptions of certain high cost gas.) this office
has detemined the following:
Biennial Net Impact to General Revenue Funds by SB1407-As Engrossed
Implementing the provisions of the bill would result in a net
negative impact of $(324,204) to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but would provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would amend Section 201.507 of the Tax Code to modify
the Railroad Commission certification requirements and Comptroller
application requirements for high-cost natural gas wells. The
current statute requires both certification and application
paperwork to be filed no later than the 180th day after the
date of first production.
An operator of a gas well seeking
a high-cost gas certification from the Railroad Commission would
be able to apply for certification at any time after the date
of first production rather than within 180 days of the date
of first production.
The bill would modify the time limitation
imposed on seeking an application for high-cost gas certification
with the Comptroller's Office. An operator would be allowed
to file either 45 days after the certification date of the Railroad
Commission and still receive 100 percent of the tax reduction
or would be able to file after the forty-fifth day of Railroad
Commission certification and only receive 90 percent of the
tax reduction on the gas produced between the 180th day after
the first day of production and the day on which the application
was filed with the Comptroller.
Methodolgy
The bill would create no loss of state revenue but would create
administrative costs for the Comptroller's Office in its implementation.
In the first year of operation (fiscal year 1998), the Comptroller
would be obliged to hire additional personnel to implement and
maintain the increased workload of file maintenance and processing.
1998 costs include funds for one-time statute and rule revisions
and the employment of contract programmers to make necessary
automated system enhancements.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Change in Number
Savings/(Cost) of State
from General Employees from
Revenue Fund FY 1997
0001
1998 ($272,665) 7.0
1998 (51,539) 2.0
2000 (51,539) 2.0
2001 (51,539) 2.0
2002 (51,539) 2.0
Net Impact on General Revenue Related Funds:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($272,665)
1999 (51,539)
2000 (51,539)
2001 (51,539)
2002 (51,539)
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: 455 Railroad Commission
304 Comptroller of Public Accounts
LBB Staff: JK ,RR ,CT