1-1 By: Sims S.B. No. 466
1-2 (In the Senate - Filed February 24, 1993; February 25, 1993,
1-3 read first time and referred to Committee on State Affairs;
1-4 May 5, 1993, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; May 5, 1993,
1-6 sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Harris of Dallas x
1-10 Rosson x
1-11 Carriker x
1-12 Henderson x
1-13 Leedom x
1-14 Lucio x
1-15 Luna x
1-16 Nelson x
1-17 Patterson x
1-18 Shelley x
1-19 Sibley x
1-20 West x
1-21 Whitmire x
1-22 COMMITTEE SUBSTITUTE FOR S.B. No. 466 By: Shelley
1-23 A BILL TO BE ENTITLED
1-24 AN ACT
1-25 relating to the qualification of oil from new or expanded enhanced
1-26 recovery projects for special tax rates.
1-27 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-28 SECTION 1. Subsection (b), Section 202.054, Tax Code, is
1-29 amended to read as follows:
1-30 (b) Oil produced from an enhanced recovery project qualifies
1-31 for the recovered oil tax rate if, before the project begins active
1-32 operation, the commission approves the project and designates the
1-33 area to be affected by the project. The incremental production from
1-34 an expanded enhanced recovery project qualifies for the recovered
1-35 oil tax rate if, before the expansion begins, the commission
1-36 approves the expansion and designates the area to be affected by
1-37 the expansion. For a new or expanded enhanced recovery project for
1-38 which an application for approval under this section is filed with
1-39 the commission on or after January 1, 1994, severance tax for all
1-40 oil produced during the period from January 1, 1994, through
1-41 August 31, 1995, to which the recovered tax rate is applicable,
1-42 must be paid when due at the rate provided by Section 202.052(a) of
1-43 this code. On or after January 1, 1996, the payor may apply to the
1-44 comptroller for and shall be entitled to receive a tax credit equal
1-45 to the difference between the tax paid and the tax which would have
1-46 been due at the recovered oil tax rate for all production to which
1-47 the recovered tax rate is applicable during the period from
1-48 January 1, 1994, through August 31, 1995. The tax credit may be
1-49 applied to either oil or gas severance taxes regardless of the
1-50 field from which the production originates. The operator of a
1-51 proposed project or a proposed expansion may apply to the
1-52 commission for approval of the project or expansion under this
1-53 section. The commission may require an applicant to provide the
1-54 commission with any relevant information required to administer
1-55 this section. If approval by the commission of a unitization
1-56 agreement under Subchapter B, Chapter 101, Natural Resources Code,
1-57 is required for purposes of carrying out the project or expansion,
1-58 the commission may not approve the project or expansion unless it
1-59 approves the unitization agreement. A person may apply for
1-60 approval of a proposed enhanced recovery project or a proposed
1-61 expansion under this subsection concurrently with an application
1-62 for approval of a unitization agreement for purposes of carrying
1-63 out the enhanced recovery project or expansion under Section
1-64 101.011, Natural Resources Code, or with an application for
1-65 certification of the project or expansion as a tertiary recovery
1-66 project for purposes of Section 4993, Internal Revenue Code of
1-67 1986, or may make a separate application for approval.
1-68 SECTION 2. Subsection (c), Section 202.054, Tax Code, is
2-1 amended to read as follows:
2-2 (c) This section applies to an enhanced recovery project
2-3 that begins active operation on or after September 1, 1989, and to
2-4 an expansion that the commission approves on or after September 1,
2-5 1991. An application for approval under this section must be filed
2-6 on or after September 1, 1989, and before January 1, 1998 <1994>,
2-7 for a new enhanced recovery project. An application for approval
2-8 under this section must be filed on or after September 1, 1991, and
2-9 before January 1, 1998 <1994>, for an expansion of an existing
2-10 enhanced recovery project. A project may not qualify as an
2-11 expansion if the project has qualified as a new enhanced recovery
2-12 project under this section. An application may be filed on or
2-13 after September 1, 1989, even if a separate application for
2-14 approval of the project or expansion has already been filed under
2-15 Subchapter B, Chapter 101, Natural Resources Code, or for approval
2-16 as a tertiary recovery project for purposes of Section 4993,
2-17 Internal Revenue Code of 1986, if the operation of a new project or
2-18 the expansion of an existing project does not begin before the
2-19 application for approval under this section is approved by the
2-20 commission.
2-21 SECTION 3. This Act takes effect January 1, 1994.
2-22 SECTION 4. The importance of this legislation and the
2-23 crowded condition of the calendars in both houses create an
2-24 emergency and an imperative public necessity that the
2-25 constitutional rule requiring bills to be read on three several
2-26 days in each house be suspended, and this rule is hereby suspended.
2-27 * * * * *
2-28 Austin,
2-29 Texas
2-30 May 5, 1993
2-31 Hon. Bob Bullock
2-32 President of the Senate
2-33 Sir:
2-34 We, your Committee on State Affairs to which was referred S.B. No.
2-35 466, have had the same under consideration, and I am instructed to
2-36 report it back to the Senate with the recommendation that it do not
2-37 pass, but that the Committee Substitute adopted in lieu thereof do
2-38 pass and be printed.
2-39 Harris of
2-40 Dallas, Chairman
2-41 * * * * *
2-42 WITNESSES
2-43 FOR AGAINST ON
2-44 ___________________________________________________________________
2-45 Name: Dean Bears x
2-46 Representing: Texaco Exploration & Productio
2-47 City: Midland
2-48 -------------------------------------------------------------------
2-49 Name: Eileen Campbell x
2-50 Representing: Marahon Oil Company
2-51 City: Houston
2-52 -------------------------------------------------------------------
2-53 Name: Steve Perry x
2-54 Representing: Texaco
2-55 City: Austin
2-56 -------------------------------------------------------------------
2-57 Name: Benjamin Sebree x
2-58 Representing: Tx Midcontinent Oil & Gas Assoc.
2-59 City: Austin
2-60 -------------------------------------------------------------------
2-61 FOR AGAINST ON
2-62 ___________________________________________________________________
2-63 Name: Jack Erskime x
2-64 Representing: AMOCO Corp
2-65 City: Austin
2-66 -------------------------------------------------------------------
2-67 Name: Dees Allan x
2-68 Representing: Texaco E & P Inc.
2-69 City: Midland
2-70 -------------------------------------------------------------------
3-1 Name: David Garlick x
3-2 Representing: Railroad Commission
3-3 City: Austin
3-4 -------------------------------------------------------------------