By Craddick H.B. No. 676
74R892 DAK-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to exempting from severance taxation certain hydrocarbons,
1-3 including condensate, produced from certain previously inactive oil
1-4 and gas wells.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 202.056(a)(2), Tax Code, is amended to
1-7 read as follows:
1-8 (2) "Hydrocarbons" means any oil or gas produced from
1-9 a well, including condensate production.
1-10 SECTION 2. Sections 202.056(b), (c), and (d), Tax Code, are
1-11 amended to read as follows:
1-12 (b) Hydrocarbons, including condensate, produced from a well
1-13 qualify for a 10-year severance tax exemption if the commission
1-14 designates the well as a three-year inactive well. The commission
1-15 may designate a well without an application, or an application may
1-16 be made to the commission for approval under this section. The
1-17 commission may require an applicant to provide the commission with
1-18 any relevant information required to administer this section. The
1-19 commission may require additional well tests to determine well
1-20 capability as it deems necessary. The commission shall notify the
1-21 comptroller in writing immediately if it determines that the
1-22 operation of the three-year inactive well has been terminated or if
1-23 it discovers any information that affects the taxation of the
1-24 production from the designated well.
2-1 (c) If the commission designates a three-year inactive well
2-2 under this section, it shall issue a certificate designating the
2-3 well as a three-year inactive well as defined by Subsection (a)(3)
2-4 of this section. The commission may not designate a well under
2-5 this section after February 28, 1998 <29, 1996>.
2-6 (d) An application for three-year inactive well
2-7 certification shall be made during the period of September 1, 1993,
2-8 through August 31, 1997 <1995>, to qualify for the tax exemption
2-9 under this section. Hydrocarbons sold after the date of
2-10 certification are eligible for the tax exemption.
2-11 SECTION 3. This Act takes effect September 1, 1995, and the
2-12 changes made to Section 202.056, Tax Code, by this Act apply to
2-13 hydrocarbons, including condensate, produced on or after that date
2-14 from a well designated under Section 202.056, Tax Code, as a
2-15 three-year inactive well, without regard to whether the well was
2-16 designated before, on, or after that date.
2-17 SECTION 4. The importance of this legislation and the
2-18 crowded condition of the calendars in both houses create an
2-19 emergency and an imperative public necessity that the
2-20 constitutional rule requiring bills to be read on three several
2-21 days in each house be suspended, and this rule is hereby suspended.