Joint Budget Committee. The bill changes the calculation of the
ad valorem credit allowed against the state severance tax on oil and gas. In tax years beginning on and after January 1, 2024, the credit for ad valorem taxes is calculated on a per-well basis for wells that are not exempt from taxation by applying the prior year's mill levy to the current year's gross income multiplied by an assessment rate of 87.5%, and taking 87.5% of that amount for the credit. This calculation is simplified to multiplying 76.56% of the gross income of the well by the mill levy fixed
in the prior calendar year.
A working group consisting of the director of the office of state
planning and budgeting and the executive directors of the departments of revenue, natural resources, education, and local affairs, or their designees, is required to develop an implementation plan for making additional changes to the state severance tax on oil and gas. The implementation plan must make recommendations concerning the steps necessary to change the legal incidence of tax from interest owners to operators while maintaining revenue neutrality, require electronic filing of returns for severance taxes, and require additional electronic data collection to the tax.
