Master FIR (1988)

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

SPONSOR:	Burpo		DATE TYPED:	02/24/01		HB	864
SHORT TITLE:		Sequestering Certain Tax Payments				SB
					ANALYST:		Williams

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY01

FY02

See Text

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Taxation and Revenue Department (TRD)

Energy, Minerals and Natural Resources Department (EMNRD)

SUMMARY

Synopsis of Bill

The bill extends disbursements to include attorney fees and costs awarded by a court or hearing officer, as the result of oil and gas litigation. The bill would delete the exception for amounts credited to the oil and gas protested payments suspense fund.

Payments on assessments for:

•oil and gas conservation taxes,
•oil and gas emergency school taxes,
•oil and gas ad valorem production taxes and
•oil and gas ad valorem production equipment taxes

are to be held in the extraction suspense fund until the Secretary of Taxation and Revenue determines there is no substantial risk of protest or other litigation. Then, certain disbursement are made, and the amount in the suspense fund on the last day of the month must be identified by tax source and distributed. Any balance, except for unidentified payments, must be transferred to the general fund.

Significant Issues

TRD notes identified payments could be held in suspense, perhaps for years, until the litigation ends.

FISCAL IMPLICATIONS

The current revenue forecast does not include an unusually large amount of audit revenues from crude oil and natural gas. The language could delay distribution of audit revenues from crude oil and natural gas production.

TECHNICAL ISSUES

On page 5, lines 12 and 13, add: "Oil and Gas Production Equipment Ad Valorem Tax."

OTHER SUBSTANTIVE ISSUES

See attached TRD analysis.

AW/ar