Coal valuation.

06LSO-0422.L1

FISCAL NOTE

	FY 2007	FY 2008	FY 2009
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase:
AD VALOREM TAX	0	0	5,420,000
BUDGET RESERVE ACCOUNT	1,350,000	2,730,000	2,100,000
GENERAL FUND	680,000	1,370,000	1,050,000
PERM. MINERAL TRUST FUND	1,130,000	2,280,000	1,750,000

Source of revenue increase: Increase in direct cost ratio applicable to the valuation of coal production, resulting in increased assessed valuations and increased severance and ad valorem taxes.

Assumptions:

The above estimates are based on direct mining costs reported for the 2004 production year, and production estimates from the January 2006 CREG forecast. The above estimates are based on a severance tax rate of 7% and a county ad valorem tax rate of 60 mills (6%).

This bill is effective January 1, 2007. Therefore, the fiscal impact to severance taxes would begin in the second half of FY 2007.

The fiscal impact to ad valorem taxes would begin with the 2007 production year. The Department of Revenue's assessment of 2007 coal production for ad valorem tax purposes will be certified to counties in June 2008, and will serve as the basis for ad valorem tax payments due to counties in November 2008 and May 2009(FY 2009).

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

(Information provided by Cindy Rice, Dept. of Revenue; 777-7983)