SRC-ARR H.B. 2615 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2615
76R11645 CBH-FBy: Counts (Brown)
Finance
5/6/1999
Engrossed


DIGEST 

The legislature enacted the high-cost gas severance tax incentive program
in 1989 and reenacted it in 1995. The program is designed to encourage
natural gas producers to drill expensive and technically difficult gas
wells. The legislature enacted the two-year inactive well severance tax
incentive program in 1993 and reenacted it in 1997. This program is
designed to encourage producers not to plug inactive wells. It has
significantly increased natural  gas production in Texas. H.B. 2615 extends
the high-cost gas severance tax incentives program by eight years and
extends the two-year inactive well severance tax incentive program by ten
years.  

PURPOSE

As proposed, H.B. 2615 regulates the application of the oil and gas
severance taxes to high-cost gas production and inactive oil and gas
leases. 

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 201.057(c), Tax Code, to provide a tax reduction
for high-cost gas as defined in Subsection (a)(2)(A) produced from a well
that was spudded or completed after August 31, 1996, and before September
1, 2010, rather than 2002.  

SECTION 2. Amends Sections 202.056(c) and (d), Tax Code, to prohibit the
railroad commission from designating a two-year inactive well under this
section after February 28, 2010, rather than February 29, 2000. Requires an
application for two-year inactive well certification to be made during the
period September 1, 1997 through August 31, 2009, rather than 1999.  

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