SRC-HRD S.B. 1407 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1407
By: Lucio
Finance
4-22-97
As Filed


DIGEST 

In 1995, legislation was passed which changed the High Cost Gas Incentive
Program created in 1989.  For wells spudded or completed prior to
September 1, 1996, Railroad Commission certification as a high-cost gas
wells provides for an exemption from state severance taxes under the
High-Cost Gas Incentive Program.  Beginning with wells spudded or
completed on or after that date, commission certification will mean a
reduction of those taxes.  This legislation was intended to encourage the
drilling of new high cost gas wells in the State of Texas.  S.B. 1407
would extend the filing deadlines to apply for the tax exemption and
reduction, and impose a penalty for late filing.  

PURPOSE

As proposed, S.B. 1407 extends the filing deadlines to apply for the tax
exemption and reduction under the High-Cost Gas Incentive Program and
imposes a penalty for late filing.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 201.507(e), Tax Code, to authorize an
application submitted to the Railroad Commission of Texas (commission) for
certain certification by the operator of a proposed or existing gas well,
to be made at any time after the first day of production, rather than
requiring such an application to be made in writing not later than the
180th day after the first day of production. 

SECTION 2. Amends Section 201.057(f), Tax Code, to prohibit an application
to the comptroller for certification according to Subsection (a)(2)(A), to
obtain the maximum exemption or tax reduction, from being filed after the
180th day after the first day of production or 45 days after the date of
approval or certification by the commission, whichever is later.  Sets
forth provisions applicable if the application is filed after the 180th
day after the first day of production or 45 days after the date of
approval or certification by the commission. 

SECTION 3. Emergency clause.
  Effective date: upon passage.