Date: 12/20/2010
Final
Severance Taxes and FML Revenue
COMMITTEE ON LEGISLATIVE COUNCIL
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10:30 AM -- Severance Taxes and FML Revenue
Jason Schrock, Legislative Council Staff, presented the severance tax forecast and shared a handout with the committee (Attachment C). He also referred the committee to page 18 of the forecast, which discusses the trends in severance tax revenue. He noted that severance tax revenue is recovering after a steep decline in FY 2009-10. He projected moderate increases in severance tax revenue because the United States continues to increase its use of natural gas. Mr. Schrock continued his presentation, discussing the federal mineral leasing revenue (FML) forecast. He noted that it is similar to the severance tax revenue forecast. Representative Balmer asked about the change in 2008 to the FML formula for distribution and if there are changes needed to be made to it. Mr. Schrock responded, noting that the formula does not account for increases in federal revenue. In closing, Mr. Schrock discussed the possibility that severance tax revenue may be less volatile in the future due to the increased use of natural gas nationally as an energy source and the increased availability of natural gas.
