Floor Packet Page No. 150
Amend CSHB 4 as follows:
(1) Add the following appropriately numbered article and
renumber subsequent articles accordingly:
ARTICLE ____. ALTERNATIVE TAXATION OF OIL OR GAS PROPERTY
INTERESTS
SECTION ____. Subtitle I, Title 2, Tax Code, is amended by
adding Chapter 205 to read as follows:
CHAPTER 205. ALTERNATIVE TAXATION OF OIL OR GAS PROPERTY
INTERESTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 205.001. CHAPTERS 201 AND 202 APPLICABLE. Except to
the extent that a provision of this chapter applies, Chapters 201
and
Sections 205.003-205.020 reserved for expansion
SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAXES
Sec. 205.021. GAS TAX IMPOSED. (a) There is imposed a tax
on each producer of gas, including condensate and liquid
hydrocarbons, subject to this chapter.
(b) The rate of the tax imposed by this section is 2.5
percent of the gross wellhead receipts derived from:
(1) gas produced and saved in this state by the
producer; or
(2) liquid hydrocarbons, other than condensate,
recovered from gas produced in this state by the producer.
(c) The tax on condensate is imposed at the same rate as the
rate of the tax imposed on oil by Section 205.022.
(d) Section 201.053 applies to the tax imposed by this
section.
Sec. 205.022. OIL TAX IMPOSED. (a) There is imposed a tax
on the production of oil subject to this chapter.
(b) The rate of the tax imposed by this section is two
percent of the gross wellhead receipts derived from oil produced in
this state.
Sec. 205.023. TAX IN ADDITION TO OTHER TAX. (a) The taxes
imposed by this chapter are in addition to any applicable tax
imposed by Chapter 201 or 202.
(b) Except as provided by Section 205.021, an exemption or
rate reduction provided by Chapter 201, 202, or 204 or other law
does not apply to the taxes imposed by this chapter.
Sec. 205.024. REPORTS. In addition to the applicable
records and reports required by Chapters 201 and 202, the
comptroller may require a person subject to a tax imposed by this
chapter to keep a record of and report any additional information
necessary to administer this chapter.
Sections 205.025-205.050 reserved for expansion
SUBCHAPTER C. ALLOCATION AND USE OF TAX
Sec. 205.051. DEPOSIT AND ALLOCATION. (a) The comptroller
shall apportion among the state and each taxing unit in which the
oil or gas is produced an amount of the revenue collected under
this chapter in proportion to the ad valorem tax rates of the state
and the taxing unit.
(b) The collector for a taxing unit or the comptroller shall
deposit and allocate all revenue from the taxes imposed by this
chapter in the same manner the collector or the comptroller
deposits and allocates revenue from ad valorem taxes imposed by the
taxing unit or the state.
(2) In Article 2 of the proposed substitute, insert a new
section, appropriately numbered, to read as follows, and renumber
subsequent sections appropriately:
SECTION 2.____. Chapter 1, Tax Code, is amended by adding
Section 1.16 to read as follows:
Sec. 1.16. ALTERNATIVE TAX. (a) The owner of an interest
in property consisting of a separate interest in oil or gas and
from which oil or gas is produced may elect to pay the gross
receipts tax imposed under Chapter 205 in lieu of ad valorem taxes
imposed by the state or a taxing unit on that oil or gas interest.
If the oil or gas interest is owned by more than one owner, all of
the owners must elect to pay the gross receipts tax.
(b) The operator of the oil or gas interest designated with
the Railroad Commission of Texas shall notify the comptroller of
the election to pay the gross receipts tax. A notice of election
must be filed with the comptroller before December 1 of the year in
which the election is made. The notice must be in the form and
manner specified by the comptroller. The election takes effect
January 1 of the year following the year in which the notice is
filed.
(c) The election remains in effect until the operator
notifies the comptroller that the election has been rescinded by
the owner or all owners of the oil or gas interest. A notice of
recision must be filed with the comptroller before December 1 of
the year in which the election is rescinded. The notice must be in
the form and manner specified by the comptroller. The recision
takes effect January 1 of the year following the year in which the
notice is filed.
(d) The comptroller shall send a copy of each notice of
election or recision to the chief appraiser of the appraisal
district established for the county in which the subject property
is located and to each taxing unit in that county.
(e) The comptroller shall adopt forms and rules to
administer this section.
(f) In the absence of an election for a tax year under this
section, including an attempted election, that does not conform to
the requirements of this section or the rules of the comptroller,
the ad valorem taxes imposed by the state and taxing units of this
state apply.
(3) In Article 2 of the bill, add a new section,
appropriately numbered, to read as follows, and renumber subsequent
sections of the bill appropriately:
SECTION 2._____. Subchapter B, Chapter 23, Tax Code, is
amended by adding Section 23.176 to read as follows:
Sec.23.176. APPRAISAL METHOD USED TO CALCULATE VALUE OF OIL
OR GAS PRODUCING PROPERTY. (a) This section applies only to
property consisting of a separate interest in oil or gas and from
which oil or gas is produced.
(b) Each year, the owner of property who renders the
property under Section 22.01 may request the chief appraiser to
calculate the market value of the property using:
(1) a discounted cash-flow analysis;
(2) a gross-income multiplier;
(3) another generally recognized appraisal method; or
(4) any combination of Subdivisions (1)-(3).
(c) The owner shall include the owner's proposed appraisal
method or combination of methods on the rendition statement or
property report filed with the chief appraiser. If the property is
owned by more than one person, all of the owners must join in the
request.
(d) If the chief appraiser determines that use of the
appraisal method or combination of methods requested by the owner
of the property will result in an accurate calculation of the
market value of the property, the chief appraiser shall calculate
the market value of the property using that method or combination.
(e) If the chief appraiser determines that use of the
appraisal method or combination of methods requested by the owner
of the property will not result in an accurate calculation of the
market value of the property, the chief appraiser shall:
(1) notify the owner that the chief appraiser will not
calculate the market value of the property using that method or
combination; and
(2) inform the owner of the alternative appraisal
method or combination of methods that the chief appraiser intends
to use to calculate the market value of the property.
(f) Notice to the owner must:
(1) be in writing and delivered before the 15th day
after the date the rendition statement or property report is filed;
and
(2) inform the owner that the owner is entitled to
appeal the chief appraiser's determination to the appraisal review
board of the appraisal district by filing a notice of appeal with
the board before the 15th day after the date the notice is
delivered to the owner.
(g) If an appeal is timely filed with the appraisal review
board, the board shall hold a hearing on the appeal. The board
shall hold the hearing no later than the 15th day after the date
that the notice of appeal is filed. The hearing shall be conducted
in the manner provided by Subchapter C, Chapter 41.
(h) The board shall determine whether the taxable value of
the property shall be calculated by use of:
(1) the appraisal method or combination of methods
requested by the owner;
(2) the appraisal method or combination of methods
proposed by the chief appraiser; or
(3) if the board determines that neither of those
methods will result in an accurate calculation of the market value
of the property, another method determined by the chief appraiser
and approved by the board at the hearing.
(i) The determination of the appraisal review board on the
appeal is final and may not be appealed by the property owner or
the chief appraiser.
(j) The comptroller shall adopt rules and forms to implement
this section and provide sufficient copies to each appraisal office
in this state. The rules must include a definition of each
appraisal method listed in Subsections (b)(1) and (2). An
appraisal office shall provide, without charge, a copy of the
definitions adopted by the comptrollor under this section to a
person requesting the definitions.