TRD Oil & Gas Severance Tax Project Project Close Certification Request June 27, 2019 Presenters: Stephanie Schardin-Clarke, Secretary, Taxation and Revenue Department Mike Baca, TRD CIO Lisa Trujillo, ACD Deputy Director Judy Vigil, Bureau Chief, Oil and Gas Severance Tax Bureau Kelvin Ginn, IT PM TRD Oil and Gas Severance Tax Project

TRD Oil & Gas Severance Tax Project Agenda Project Purpose Scope Project Cost Industry Engagement Adoption Metrics Benefits Q&A Mike will review

TRD Oil & Gas Severance Tax Project Purpose of the Project TRD Oil and Gas Severance Tax Project goal: to integrate Oil and Gas Severance Tax onto the existing GenTax and Taxpayer Access Point (TAP) platform infrastructure used by 30 other TRD Tax programs. Automated and advanced reporting system with upfront edits

TRD Oil and Gas Severance Tax Project Scope TRD Project scope was agreed upon by SMT Decision Request #003, signed 11- 22-2016, and unchanged through TRD implementation March 19, 2018. Inclusion of all TRD Oil and Gas Severance Tax functions into the existing TRD GenTax infrastructure. Provide the ability to add, change, deactivate Oil and Gas Severance Tax Accounts. Provide the ability to create, process, and validate returns, payments and notices for Oil and Gas Tax (OGT) and Natural Gas Tax (NGT). Process Oil and Gas distributions Issue Oil and Gas refunds Track and Manage collections of delinquent accounts Provide information and access to Discovery to audit Oil and Gas returns. Provide the ability to file and pay online within the existing Tax payer Access Point (TAP)

TRD Project Schedule and Budget TRD Oil and Gas Severance Tax Project TRD Project Schedule and Budget Planned Item Description Actual Item Planned Start Date: Planned Late 2016 Actual Start Date: Actual June 2017 Planned End Date: Proposed Date: 10/2017 Date Negotiated with Industry: 03/19/2018 Actual End Date: Delivered: 03/19/18 Close: 06/30/2019 Planned Cost: (Budget) : $ 5,000,000 Actual Cost: (Total) : $ 3,429,460 Personnel: $ 827,475 $145,320 Professional Services: $ 3,277,288 Professional Services: $2,880,918 HWR\SWR: $ 647,561 $264,128 Misc: $ 25,000 $390 Assumed ONGARD Replacement Program (Tri-Agency) Expenses: $ 222,676 $138,708 Note: this is $1,560, 022 less than plan.

TRD Oil and Gas Severance Tax Project Industry Engagement (70) Unique Communication/Training Events Initiatives unique to this project: Industry Focus Group All Industry WebEx Public Project Web Site 10 weeks of industry testing Home page for the tax program on public TRD site with links to all videos, reports, instructions, and documents needed for industry adoption. The Industry was heavily involved and supported during the planning and implementation of the project. Industry outreach included a survey to gather concerns regarding the proposed reporting changes; discussed during the Focus group and WebEx sessions Monitored Industry testing using sign up genius to ensure the companies had an opportunity to test in the different live environments. The Compliance unit hired temps to perform industry outreach via telephone and correspondence to inform taxpayer of the upcoming changes. Through out the project an email URL was available and supported by the project team to host questions and concerns. Currently the URL is still being utilized and supported by the Compliance Unit. All tutorials are still available to the Industry via the TRD homepage.

TRD Oil and Gas Severance Tax Project Adoption Metrics 1st period (March 2018 reporting for January 2018 Sales\Filing Period) OGST taxes paid: $106 Million - Previous year average $75 Million / per month Returns data - March 2018 reporting: ACH Credit Voucher: 44 E-check payments: 250 NGPT returns: 24 OGST returns: 697 All Top 30 Industry filers were able to successfully file the 01/2018 return within the available March 19 – March 25, 2018 deadline. Distribution was on-time the first three months after the go live date of March 19, 2018 Current Stats based on a 13 month average: Average number of returns equals 414 Average distribution 142,074,698.82 Average of 487 payments per month EFT Payments 4,369 to date Distributions are timely with the maximum dollar amount distributed No suspended detail lines for periods January 2018 forward

TRD Oil and Gas Severance Tax Project Adoption Metrics 2 Tickets created through OilGas. Outreach: Mar 19 – 30: 275 Apr 16-27 : 32 May 14-25 : 24 Call volume via ACD IVR Option #2 Mar 19 – Apr 6: 515 Apr 15 – May 3: 340 May 14 – 25 : 50* Currently the oilgas.outreach URL is available and being utilized to support the Industry Based on the user friendly reporting system, the number of calls has dropped significantly.

TRD Oil and Gas Severance Tax Project Benefits Increased distributions to the beneficiaries Collections increased Reporting enhancements Upfront edits No suspended detail lines / revenue No computations Payment Options Increased ACH Credit Fed-wire ACH Debit (EFT) Check Cash Improved Audits Better tracking mechanism Collections increased due to: Lien Levies Seizures of property

TRD Oil and Gas Severance Tax Project Advantages to Industry: Less suspended lines Amendments can be made at any time and are processed PM that day Additional electronic payment methods are available Reduction in notices and notice types Account status is available online, updated as per the previous day’s activities Immediate feedback regarding uploaded returns Fewer lines of data to submit

Thank you for your continued support! TRD Oil and Gas Severance Tax Project The OGST project was successfully completed within scope, schedule and budget This request is to close the Oil and Gas Severance Tax Project. ‘ Thank you for your continued support!