LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
 
April 25, 2017

TO:
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
HB3201 by Darby (Relating to the designation of a well as a two-year inactive well or three-year inactive well for purposes of the oil and gas severance tax exemption.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB3201, As Introduced: a negative impact of ($3,226,000) through the biennium ending August 31, 2019.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2018 ($1,236,000)
2019 ($1,990,000)
2020 ($4,992,000)
2021 ($5,811,000)
2022 ($7,031,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1
Probable Revenue (Loss) from
Foundation School Fund
193
Probable Savings from
General Revenue Fund
1
Probable Revenue (Loss) from
State Highway Fund
6
2018 ($927,000) ($309,000) $0 $0
2019 ($2,188,000) ($729,000) $927,000 ($463,000)
2020 ($5,385,000) ($1,795,000) $2,188,000 ($1,094,000)
2021 ($8,397,000) ($2,799,000) $5,385,000 ($2,693,000)
2022 ($11,571,000) ($3,857,000) $8,397,000 ($4,198,000)

Fiscal Year Probable Revenue (Loss) from
Economic Stabilization Fund
599
2018 $0
2019 ($463,000)
2020 ($1,094,000)
2021 ($2,693,000)
2022 ($4,198,000)

Fiscal Analysis

The bill would amend Section 202.056 of the Tax Code to make permanent the two-year inactive well exemptions for oil and natural gas production taxes by removing the deadlines for the application submission and the designation of the wells by the Railroad Commission (RRC.)
 
The bill would remove from this section references to the expired three-year inactive well exemptions for oil and natural gas production taxes, which were last certified by the RRC in 1996.
 
The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect on the 91st day after the last day of the legislative session.

Methodology

The fiscal impact analysis is based on the Comptroller's oil and natural gas production taxes data and the 2018-19 Biennial Revenue Estimate. The fiscal impact reflects the buildup of the population of qualified inactive wells for the next 10 years beginning in fiscal 2018.

Local Government Impact

No fiscal implication to units of local government is anticipated.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
UP, KK