Coal valuation.

03LSO-0180.L2

FISCAL NOTE (HB0218)

 

 

 

FY 2004

FY 2005

FY 2006

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase:

 

 

 

BUDGET RESERVE ACCOUNT

550,000

1,130,000

1,160,000

GENERAL FUND

280,000

570,000

580,000

PERM. MINERAL TRUST FUND

230,000

470,000

480,000

 

Source of revenue increase:

 

Severance taxes on coal production, based on projected increase in direct cost ratios due to inclusion of coal lease bonus payments as a direct mining cost.

 

Assumptions:

 

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

¨      CREG price and production projections occur uniformly for all producers.

¨      Incremental costs of coal lease bonuses, direct mining costs, direct processing costs, and direct transportation costs do not change the direct cost ratio disproportionately with increased production.

¨      Beginning in 2003, the only depletion in financial records for the producers in question will be will be coal lease bonus payments depletion.

¨      No new coal lease bonus payment depletion was included in the estimates.

 

  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 coal production taking place on and after January 1, 2004.

 

 

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

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

phone 777-5237)