NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.



The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.



Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.





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





SPONSOR: Lyons DATE TYPED: 2-23-99 HB
SHORT TITLE: Distribute Extractive Industry Taxes SB 557
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 HB-657

SOURCES OF INFORMATION



Taxation and Revenue Department (TRD)



SUMMARY



Synopsis of Bill



Senate Bill 557 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.



BT/gm