Coal valuation.

05LSO-0426.L1

                                                         

FISCAL NOTE

 

	FY 2006	FY 2007	FY 2008
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase:
AD VALOREM TAX	0	7,841,000	8,756,000
PERM. MINERAL TRUST FUND	913,000	1,920,000	2,113,000
SEV TAX DISTRIBUTION ACCT	3,348,000	7,041,000	7,746,000

 

Source of revenue increase: Increase in direct cost ratio applicable to coal valuation, resulting in increased assessed valuations.

 

Assumptions:

 

Calculated rate per ton of new coal lease bonuses used from 2005-2008.

 

Estimates are based on each mines revenue and cost structures.

 

Used the 2003 production year as the base year for all costs other than depletion. It is assumed there would be no increase or decrease in the rate per ton of mining or processing expenses. It is also assumed there would be no increase or decrease in the rate per ton of depletion for mines that did not have a coal lease bonus payment.

 

The above estimates are based on forecasted production tons and prices from the January 2005 CREG projections.

 

Calculated the percentage of increase in production from the base year (per CREG) to the forecasted years (per CREG). Calculated the percentage of increase (decrease) in price per ton from the base year (per CREG) to the forecasted years (per CREG).

                                                    

This bill is effective January 1, 2006. Therefore, the fiscal impact to severance taxes would begin in the second half of FY 2006.

 

It is assumed the fiscal impact to ad valorem taxes would begin with the 2006 production year (2007 assessment year).

 

 

 

 

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

(Information provided by Craig Grenvik, Dept. of Rev; phone 777-5237)