Enrolled Bill Summary

House Bill 2277	House Author:  Darby
Effective:  9-1-17	Senate Sponsor:  Watson

            House Bill 2277 amends the Tax Code to establish that the median drilling and completion cost for all high-cost wells for which an application for a gas production tax reduction was made during the previous state fiscal year is fixed on the date the comptroller of public accounts makes the determination of that cost. The bill prohibits the required report of drilling and completion costs contained in such an application and used by the comptroller in making the determination from being amended after March 1 of the year following the state fiscal year in which the application was made.

Previous law entitled a gas producer to a credit against certain other gas production taxes if gas production tax was paid on gas that otherwise qualified for the tax reduction before a well was certified as producing high-cost gas or before the comptroller approved an application for the tax reduction. House Bill 2277 instead entitles the person who remitted such tax to a refund in an amount equal to the difference between the amount of the tax paid on the gas and the amount of tax that would have been paid on the gas if it had received the tax reduction. The bill limits the total allowable refund for taxes paid for reporting periods before the date the application is filed and requires the person entitled to the refund to apply to the comptroller for the refund not later than the first anniversary after the date the comptroller approves the tax reduction.