By Earley                                             H.B. No. 1085
          Substitute the following for H.B. No. 1085:
          By Craddick                                       C.S.H.B. No. 1085
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the qualification of oil from new or expanded enhanced
    1-3  oil recovery projects for special tax rates.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 202.054(b), Tax Code, is amended to read
    1-6  as follows:
    1-7        (b)  Oil produced from a tertiary recovery project, or from a
    1-8  secondary recovery project for which an application for approval
    1-9  under this section is filed with the commission before January 1,
   1-10  1994, <an enhanced recovery project> qualifies for the recovered
   1-11  oil tax rate if, before the project begins active operation, the
   1-12  commission approves the project and designates the area to be
   1-13  affected by the project.  The incremental production from a
   1-14  secondary recovery project for which an application for approval
   1-15  under this section is filed with the commission on or after January
   1-16  1, 1994, qualifies for the recovered oil tax rate if, before the
   1-17  project begins active operation, the commission approves the
   1-18  project and designates the area to be affected by the project.  The
   1-19  incremental production from an expanded enhanced recovery project
   1-20  qualifies for the recovered oil tax rate if, before the expansion
   1-21  begins, the commission approves the expansion and designates the
   1-22  area to be affected by the expansion.  The operator of a proposed
   1-23  project or a proposed expansion may apply to the commission for
   1-24  approval of the project or expansion under this section.  The
    2-1  commission may require an applicant to provide the commission with
    2-2  any relevant information required to administer this section.  If
    2-3  approval by the commission of a unitization agreement under
    2-4  Subchapter B, Chapter 101, Natural Resources Code, is required for
    2-5  purposes of carrying out the project or expansion, the commission
    2-6  may not approve the project or expansion unless it approves the
    2-7  unitization agreement.  A person may apply for approval of a
    2-8  proposed enhanced recovery project or a proposed expansion under
    2-9  this subsection concurrently with the application for approval of a
   2-10  unitization agreement for purposes of carrying out the enhanced
   2-11  recovery project or expansion under Section 101.011, Natural
   2-12  Resources Code, or with an application for certification of the
   2-13  project or expansion as a tertiary recovery project for purposes of
   2-14  Section 4993, Internal Revenue Code of 1986, or may make a separate
   2-15  application for approval.
   2-16        SECTION 2.  Section 202.054(c), Tax Code, is amended to read
   2-17  as follows:
   2-18        (c)  This section applies to an enhanced recovery project
   2-19  that begins active operation on or after September 1, 1989, and to
   2-20  an expansion that the commission approves on or after September 1,
   2-21  1991.  An application for approval under this section must be filed
   2-22  on or after September 1, 1989, and before January 1, 1998 <1994>,
   2-23  for a new enhanced recovery project.  An application for approval
   2-24  under this section must be filed on or before September 1, 1991,
   2-25  and before January 1, 1998 <1994>, for an expansion of an existing
   2-26  enhanced recovery project.  A project may not qualify as an
   2-27  expansion if the project has qualified as a new enhanced recovery
    3-1  project under this section.  An application may be filed on or
    3-2  after September 1, 1989, even if a separate application for
    3-3  approval of the project or expansion has already been filed under
    3-4  Subchapter B, Chapter 101, Natural Resources Code, or for approval
    3-5  as a tertiary recovery project for purposes of Section 4993,
    3-6  Internal Revenue Code of 1986, if the operation of a new project or
    3-7  the expansion of an existing project does not begin before the
    3-8  application for approval under this section is approved by the
    3-9  commission.
   3-10        SECTION 3.  Section 202.054(e), Tax Code, is amended to read
   3-11  as follows:
   3-12        (e)  The recovered oil tax rate applies only to that oil
   3-13  production, from the area the commission certifies to be affected
   3-14  by the project, which is:
   3-15              (1)  oil produced from a tertiary recovery project, or
   3-16  from a secondary recovery project for which an application for
   3-17  approval under this section is filed with the commission before
   3-18  January 1, 1994;
   3-19              (2)  the incremental production from a secondary
   3-20  recovery project for which an application for approval under this
   3-21  section is filed with the commission on or after January 1, 1994;
   3-22  or
   3-23              (3)  <oil produced from a new enhanced oil recovery
   3-24  project or> the incremental production caused by the expansion of
   3-25  an existing enhanced recovery project <from the area the commission
   3-26  certifies to be affected by the project>.
   3-27        SECTION 4.  This Act takes effect September 1, 1993.
    4-1        SECTION 5.  The importance of this legislation and the
    4-2  crowded condition of the calendars in both houses create an
    4-3  emergency and an imperative public necessity that the
    4-4  constitutional rule requiring bills to be read on three several
    4-5  days in each house be suspended, and this rule is hereby suspended.