84(R) - 2015
Oil & Gas
Relating to the dedication of revenue derived from the tax levied on crude petroleum production.
A fiscal note dated April 14, 2015 anticipate a negative two-year net impact to General Revenue Related Funds of $3,556,000 through the biennium ending August 31, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
House Bill 4034 would amend Section 81.112 of the Natural Resources Code related to the disposition of tax proceeds from the tax levied on crude petroleum under Section 81.111 of the Natural Resources Code.
It would require that this tax be deposited in the oil and gas regulation and cleanup fund instead of the general revenue fund.
Vote Recommendation Notes
Under current law, proceeds of the tax levied on crude petroleum produced in Texas are to be deposited in the General Revenue Fund (Section 81.112 of the Natural Resources Code) and are to be used for the administration of the state's oil and gas conservation laws.
House Bill 4034 would require that these proceeds be deposited in the oil and gas regulation and cleanup fund as provided by Section 81.067 of the Natural Resources Code. According to the statement of purpose for the bill, revenue fluctuations from the tax "coincide with demands on the Railroad Commission of Texas for additional inspectors and that a dedication of this revenue to the oil and gas regulation and cleanup fund could be used by the railroad commission for any purpose related to the regulation of oil and gas development."
Under current law (Section 81.067 of the Natural Resources Code), the railroad commission must certify to the comptroller the date on which the balance in the oil and gas regulation and cleanup fund equals or exceeds $30 million, above which the oil-field cleanup regulatory fees on oil and gas are not collected or required to be paid until the fund level has fallen back to below $25 million.
By dedicating proceeds collected under Section 81.112 of the Natural Resources Code to the oil and gas regulation and cleanup fund instead of depositing them in general revenue, House Bill 4034 could make it more transparent for taxpayers to know where these revenues are being spent, and because the collection of some fees is conditioned to the amount in the oil and gas regulation and cleanup fund, dedicating these revenues to the fund could ultimately decrease the total amount of oil-field cleanup regulatory fees on oil and gas being collected.
On the other hand, taking these proceeds away from general revenue and dedicating them would put them out of reach of the spending cap, hence possibly allowing that more money than necessary is spent.
As a consequence of possibly both good and bad consequences from House Bill 4034, we will remain neutral.