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.