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





SPONSOR: Mallory DATE TYPED: 2-24-99 HB 657
SHORT TITLE: Distribute Extractive Industry Taxes SB
ANALYST: Taylor

REVENUE



Estimated Revenue
 Subsequent

Years Impact

 Recurring

or Non-Rec

 Fund

Affected

FY99 FY2000
$ (150.0) $ 0.0 $ 0.0 Non-recurring General Fund
$ 80.0 $ 0.0 $ 0.0 Non-recurring Union County*
$ 60.0 $ 0.0 $ 0.0 Non-recurring Harding County*
$ 11.0 $ 0.0 $ 0.0 Non-recurring Quay County*

* Funds affected include subdivisions within the county.



(Parenthesis ( ) Indicate Revenue Decreases)



Duplicates SB-557

SOURCES OF INFORMATION



Taxation and Revenue Department



SUMMARY



Synopsis of Bill



House Bill 657 proposes to add the oil and gas ad valorem production tax, the oil and gas production equipment ad valorem tax and the copper production ad valorem tax to the set of taxes that are governed by the tax administration act provisions as to how errors in the distribution of revenues to local governments are to be handled. The law provides that there will be no decrease in the distributions made to a political subdivision to recoup the excess from a distribution made more than a year before the Taxation and Revenue Department determined that the distribution was made in error.



FISCAL IMPLICATIONS



The Taxation and Revenue Department reports that it granted a $1.5 million refund claim to a CO2

producer in the Bravo Dome areas of Harding, Quay and Union Counties. About $151 thousand of the refunded amount had been previously distributed to the counties as their share of tax revenues, with all but one month of the distributions having been made more than a year before TRD's determination on behalf of the taxpayer. The changes proposed in this law would hold the local governments harmless, and the state would absorb the lost revenue. The revenue impact to the state is estimated to be $150 thousand in non-recurring revenue. The gains shown to the local governments are hypothetical in the sense that they are relieved of having to repay the state.



ADMINISTRATIVE IMPLICATIONS



TRD reports that the administrative impacts of the bill are not significant.



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