Severance tax distribution.

05LSO-0098.C1

FISCAL NOTE

	FY 2006	FY 2007	FY 2008
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
CITIES AND TOWNS DIST	26,700,000	26,400,000	27,600,000
COUNTY DIST	26,700,000	26,400,000	27,600,000
STATE AID COUNTY ROAD	10,700,000	10,600,000	11,100,000
CITY STREET AND ALLEY	5,400,000	5,300,000	5,500,000
STATE LOAN AND INVEST. BD	2,700,000	2,600,000	2,800,000
GENERAL FUND	(27,600,000)	(27,300,000)	(28,600,000)
BUDGET RESERVE ACCOUNT	(44,600,000)	(44,000,000)	(46,000,000)

Source of revenue increase (decrease):

This bill does not increase or decrease revenues. It redistributes severance tax revenues over the $155 million cap from the General Fund and Budget Reserve Account to cities, towns, and counties. The net impact to all accounts is zero.

Assumptions:

The above estimates are based on October 2004 CREG projections.

This bill makes the following changes to the distribution of severance taxes over the $155 million cap:

• General Fund distribution percentage would decrease from one-third to 23% ($27.6 million decrease in FY06).
• Budget Reserve Account distribution percentage would decrease from two-thirds to 50% ($44.6 million decrease in FY06).
• Cities and towns now would receive a distribution of 10% ($26.7 million increase in FY06).
• Counties would now receive a distribution of 10% ($26.7 million increase in FY06).
• County Road funds would now receive a distribution of 4% ($10.7 million increase in FY06).
• Cities and towns would now receive a distribution of 2% for the purpose of public street and alley construction and maintenance ($5.4 million increase in FY06).
• The State Loan and Investment Board would now receive a distribution of 1% for the purpose of addressing mineral development impact assistance ($2.7 million increase in FY06).

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