Natural gas valuation.

03LSO-0091.C1

                                                         

FISCAL NOTE (HB0087)

 

 

 

FY 2004

FY 2005

FY 2006

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase:

 

 

 

BUDGET RESERVE ACCOUNT

2,450,000

2,450,000

2,450,000

GENERAL FUND

1,230,000

1,230,000

1,230,000

PERM. MINERAL TRUST FUND

1,230,000

1,230,000

1,230,000

 

Source of revenue increase:

 

Severance taxes on natural gas production, due to changing valuation method for producer-processed natural gas from the proportionate profits method to a netback method.

 

Assumptions:

 

  1. The above estimates are based on October 2002 CREG price projections for natural gas and the following assumptions:

¨      Assume calendar year 2000 production levels for affected properties.

¨      Assume calendar year 2000 expenses for processing and transportation.

¨      Assume Standard and Poor’s “B” bond rating remains constant at 11.75 percent.

 

  1. This bill will also increase production tax collected at the county level, resulting in an increase in local resources available for school funding, and an increase in the 12 mill state share that goes to the School Foundation Program.

 

  1. This bill will apply to natural gas production taking place on and after January 1, 2003

 

 

 

 

 

 

 

Prepared by:   Dean Temte, LSO    Phone:   777-78810

(information provided by Randy Bolles/Craig Grenvik, Dept of Revenue;

phone 777-5237)