TO: | Honorable Steve Ogden, Chair, Senate Committee on Finance |
FROM: | John S. O'Brien, Director, Legislative Budget Board |
IN RE: | SB846 by Averitt (Relating to the exemption of oil and gas royalty interests owned by private institutions of higher education from oil and gas severance taxes.), As Introduced |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2010 | ($1,250,000) |
2011 | ($1,250,000) |
2012 | ($1,250,000) |
2013 | ($1,250,000) |
2014 | ($1,250,000) |
Fiscal Year | Probable Revenue (Loss) from Foundation School Fund 193 |
Probable Revenue (Loss) from Economic Stabilization Fund 599 |
---|---|---|
2010 | ($1,250,000) | ($3,750,000) |
2011 | ($1,250,000) | ($3,750,000) |
2012 | ($1,250,000) | ($3,750,000) |
2013 | ($1,250,000) | ($3,750,000) |
2014 | ($1,250,000) | ($3,750,000) |
The bill would amend Chapters 201 and 202 of the Tax Code by adding Sections 201.056 and 202.062 to provide oil and natural gas severance tax exemptions on royalty interests owned by a private or independent institution of higher education as defined by Section 61.003 of the Education Code.
The bill would take effect September 1, 2009.
The bill would exempt private or independent institutions of higher education from severance taxation of oil and natural gas royalties. A survey conducted by the Independent Colleges and Universities of Texas (ICUT), a nonprofit association representing most of these private or independent institutions, indicated a potential loss of approximately $5 million per year. The table below allocates those losses between GR Account 0193—Foundation School Fund and the Economic Stabilization Fund 0599.
Note: Transfers to Fund 0599 occur within the first 90 days of the subsequent fiscal year only if total oil production tax revenue exceeds $531.9 million and total natural gas tax revenue exceeds $599.8 million. For purposes of this fiscal note it is assumed severance tax revenue will exceed these thresholds. If it does not, in any given year, the $3.75 million listed in the above table will be a loss to GR rather than the ESF.
Source Agencies: | 304 Comptroller of Public Accounts
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LBB Staff: | JOB, MN, KK, SD
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