LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                                May 3, 1999
  
  
          TO:  Honorable J.E. "Buster" Brown, Chair, Senate Committee on
               Natural Resources
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB 2104 by Craddick (Relating to a tax exemption for
               hydrocarbon production from certain inactive oil and gas
               leases returned to production.), As Engrossed
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would extend the existing two-year inactive well exemption for
production from qualifying oil and gas wells, as well as the deadline for
Railroad Commission well certification (to February 28, 2002 from the
current deadline of February 28, 2000).

Oil or gas wells would have to have been out of production for at least
two years prior to an application to qualify for the severance tax
exemption that would be provided in the bill.  Production from such
wells, therefore, is not included in the production stream that provides
the basis for the estimates in the 2000-2001 Biennial Revenue Estimate
and beyond.  Consequently, there would not be a loss of revenue to the
state.
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts, 455   Railroad
                   Commission
LBB Staff:         JK, DE, BB, BR, CT