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F I S C A L I M P A C T R E P O R T



SPONSOR: Whitaker DATE TYPED: 2-11-99 HB 281
SHORT TITLE: Well Overwork Projects SB
ANALYST: Taylor

REVENUE



Estimated Revenue
Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY99 FY2000
N.A. $ (320.0) $ (340.0) Recurring Severance Tax Bonding Fund



(Parenthesis ( ) Indicate Revenue Decreases)



Duplicates/Conflicts with/Companion to/Relates to HB-11, HB-280, HB-436

SOURCES OF INFORMATION



Taxation and Revenue (TRD)

Energy Mineral and Natural Resources Department, Oil Conservation Division (OCD)



SUMMARY



Synopsis of Bill



House Bill 281 proposes changes to oil and gas well workover incentives. The bill would qualify all production from workover oil and gas wells for the incentive rate, but increase the incentive severance tax rate for from 1.875 percent to 2.45 percent.



FISCAL IMPLICATIONS



TRD has estimated that the bill would cost $320 thousand in FY 2000 and $340 thousand on a full year basis. TRD's estimate is based on applying the new incentive rate-2.45 percent to an estimated, but unstated level of production. OCD reports that the revenue impacts are uncertain, but that the higher rate was designed to be revenue neutral.



ADMINISTRATIVE IMPLICATIONS



Neither TRD nor OCD reports an impact in the administering the incentive. TRD, however, says that it could result in the need for increased audits.





OTHER SUBSTANTIVE ISSUES