Tax incentive for value added minerals.

03LSO-0004.L3

FISCAL NOTE (HB0070)

This bill contains an appropriation of $150,000 from the GENERAL FUND to the Department of Revenue.

This bill contains an authorization of 1 Full-Time position to the Department of Revenue.

This bill increases the severance tax rates on surface coal, underground coal, crude oil, lease condensate, natural gas, and trona by 3 percent, effective beginning January 1, 2008. The severance tax from this 3 percent rate increase will be distributed to the Permanent Wyoming Mineral Trust Fund (PWMTF).

This bill also creates a severance tax credit equal to the additional 3 percent severance tax for surface coal, underground coal, crude oil, lease condensate, natural gas, and trona produced on and after January 1, 2008, and used to create a value added product by a certified value added project.

This bill creates the Value Added Review Committee. This committee will review applications from taxpayers for certification of value added projects, and will provide notices of certification for qualifying projects to the Department of Revenue.

Because of its January 1, 2008 effective date, this severance tax rate increase will not increase revenues to the (PWMTF) during fiscal years 2004-06. This increase in the severance tax rates could impact future production levels, thereby impacting severance tax revenues in future years. The timing and amount of this potential impact on future revenues is indeterminable.

Prepared by:   Dean Temte, LSO    Phone:   777-7881

(information provided by Randy Bolles, Dept. of Revenue; 777-5237: Lance Cook, Geological Survey; (307)766-2286:

Don Likwartz, Oil & Gas Conservation Commission, (307)234-7147

This bill has administrative impact that appears to increase (or decrease) duties or responsibilities of one or more state agencies and may impact agency spending or staffing requirements.  The following state agencies may be affected administratively:

Department of Revenue

State Geological Survey

Oil and Gas Conservation Commission