LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 5, 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), Committee Report 2nd House, as amended ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** 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, 2010 from the current deadline of February 29, 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