By: Sims, Carriker S.B. No. 466
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the qualification of oil from new or expanded enhanced
1-2 recovery projects for special tax rates.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (b), Section 202.054, Tax Code, is
1-5 amended to read as follows:
1-6 (b) Oil produced from an enhanced recovery project qualifies
1-7 for the recovered oil tax rate if, before the project begins active
1-8 operation, the commission approves the project and designates the
1-9 area to be affected by the project. The incremental production from
1-10 an expanded enhanced recovery project qualifies for the recovered
1-11 oil tax rate if, before the expansion begins, the commission
1-12 approves the expansion and designates the area to be affected by
1-13 the expansion. For a new or expanded enhanced recovery project for
1-14 which an application for approval under this section is filed with
1-15 the commission on or after January 1, 1994, severance tax for all
1-16 oil produced during the period from January 1, 1994, through
1-17 August 31, 1995, to which the recovered tax rate is applicable,
1-18 must be paid when due at the rate provided by Section 202.052(a) of
1-19 this code. On or after January 1, 1996, the payor may apply to the
1-20 comptroller for and shall be entitled to receive a tax credit equal
1-21 to the difference between the tax paid and the tax which would have
1-22 been due at the recovered oil tax rate for all production to which
1-23 the recovered tax rate is applicable during the period from
1-24 January 1, 1994, through August 31, 1995. The tax credit may be
2-1 applied to either oil or gas severance taxes regardless of the
2-2 field from which the production originates. The operator of a
2-3 proposed project or a proposed expansion may apply to the
2-4 commission for approval of the project or expansion under this
2-5 section. The commission may require an applicant to provide the
2-6 commission with any relevant information required to administer
2-7 this section. If approval by the commission of a unitization
2-8 agreement under Subchapter B, Chapter 101, Natural Resources Code,
2-9 is required for purposes of carrying out the project or expansion,
2-10 the commission may not approve the project or expansion unless it
2-11 approves the unitization agreement. A person may apply for
2-12 approval of a proposed enhanced recovery project or a proposed
2-13 expansion under this subsection concurrently with an application
2-14 for approval of a unitization agreement for purposes of carrying
2-15 out the enhanced recovery project or expansion under Section
2-16 101.011, Natural Resources Code, or with an application for
2-17 certification of the project or expansion as a tertiary recovery
2-18 project for purposes of Section 4993, Internal Revenue Code of
2-19 1986, or may make a separate application for approval.
2-20 SECTION 2. Subsection (c), Section 202.054, Tax Code, is
2-21 amended to read as follows:
2-22 (c) This section applies to an enhanced recovery project
2-23 that begins active operation on or after September 1, 1989, and to
2-24 an expansion that the commission approves on or after September 1,
2-25 1991. An application for approval under this section must be filed
2-26 on or after September 1, 1989, and before January 1, 1998 <1994>,
2-27 for a new enhanced recovery project. An application for approval
3-1 under this section must be filed on or after September 1, 1991, and
3-2 before January 1, 1998 <1994>, for an expansion of an existing
3-3 enhanced recovery project. A project may not qualify as an
3-4 expansion if the project has qualified as a new enhanced recovery
3-5 project under this section. An application may be filed on or
3-6 after September 1, 1989, even if a separate application for
3-7 approval of the project or expansion has already been filed under
3-8 Subchapter B, Chapter 101, Natural Resources Code, or for approval
3-9 as a tertiary recovery project for purposes of Section 4993,
3-10 Internal Revenue Code of 1986, if the operation of a new project or
3-11 the expansion of an existing project does not begin before the
3-12 application for approval under this section is approved by the
3-13 commission.
3-14 SECTION 3. This Act takes effect January 1, 1994.
3-15 SECTION 4. The importance of this legislation and the
3-16 crowded condition of the calendars in both houses create an
3-17 emergency and an imperative public necessity that the
3-18 constitutional rule requiring bills to be read on three several
3-19 days in each house be suspended, and this rule is hereby suspended.