Severance tax distributions.

04LSO-0376.L2

                                                         

FISCAL NOTE (HB0196)

 

	FY 2005	FY 2006	FY 2007
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
CITIES AND TOWNS DIST	21,600,000	20,900,000	22,600,000
COUNTY DIST	21,600,000	20,900,000	22,600,000
GENERAL FUND	(12,400,000)	(12,400,000)	(12,400,000)
BUDGET RESERVE ACCOUNT	(30,800,000)	(29,400,000)	(32,800,000)

 

Source of revenue increase (decrease):

This bill does not increase or decrease revenues. It only redistributes severance tax revenues 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 January 2004 CREG projections

 

This bill changes the severance distributions over $155 million cap:

• The first $75 million over the $155 million dollar cap is distributed one-third (1/3) to the General Fund and two-thirds (2/3) to the Budget Reserve Account.
• Over-the-cap distributions in excess of $75 million are distributed one-third (1/3) to the General Fund, one-third (1/3) to the Budget Reserve Account, and one-third (1/3) to cities, towns and counties. The one-third (1/3) distribution to cities, towns, and counties is split 50% to cities and towns and 50% to counties.
• This diverts roughly $30.8 million from the Budget Reserve and distributes $15.4 million to cities and towns and $15.4 million to counties in FY05.

 

This bill changes severance distributions under the $155 million cap:

• General Fund distribution decreases from 62.26% to 54.26%.
• Total County distribution increases from 3.88% to 7.88%.
• Cities and towns distribution increases form 9.25% to 13.25%.
• This diverts $6.2 million to cities and towns and $6.2 million to counties.

 

Prepared by:   Dean Temte, LSO    Phone:   777-788