By Merritt                                            H.B. No. 1310
         76R4486 DAK-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to an exemption from the severance tax for oil produced
 1-3     from low-producing wells.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 202, Tax Code, is amended
 1-6     by adding Section 202.058 to read as follows:
 1-7           Sec. 202.058.  EXEMPTION FOR LOW-PRODUCING OIL WELLS.  (a)
 1-8     In this section:
 1-9                 (1)  "Commission" means the Railroad Commission of
1-10     Texas.
1-11                 (2)  "Qualifying lease" means a commission-designated
1-12     oil lease whose production is no more than 10 barrels of oil per
1-13     day per active producing well, excluding gas flared pursuant to the
1-14     rules of the commission.  For purposes of qualifying a lease,
1-15     production per well per day is determined by computing the average
1-16     daily per well production from the lease using the P-1 monthly
1-17     lease production report.
1-18           (b)  Oil produced from a qualifying lease  is exempt from the
1-19     severance tax imposed by this chapter.
1-20           (c)  A person filing a report under this chapter must include
1-21     the number of barrels of oil purchased or produced during the
1-22     period covered by the report that are exempt under this section.
1-23           (d)  If the tax is paid on a barrel of oil exempt under this
1-24     section at the full rate provided by Section 202.052(a) or (b), the
 2-1     person paying the tax is entitled to a credit against taxes imposed
 2-2     by this chapter for the amount paid.  To receive the credit, the
 2-3     person must apply to the comptroller for the credit not later than
 2-4     the expiration of the applicable period for filing a tax refund
 2-5     under Section 111.104.
 2-6           (e)  To qualify for an exemption under Subsection (b), the
 2-7     person responsible for paying the tax must apply to the
 2-8     comptroller.  The comptroller shall approve the application of a
 2-9     person who demonstrates that the oil production is eligible for a
2-10     tax exemption.  The comptroller may require a person applying for
2-11     the tax exemption to provide any relevant information necessary to
2-12     administer this section.  The comptroller may establish procedures
2-13     to comply with this section.
2-14           SECTION 2.  Section 202.052(c), Tax Code, is amended to read
2-15     as follows:
2-16           (c)  The exemptions described by Sections 202.056, 202.058,
2-17     and 202.059 apply to oil produced in this state from a well that
2-18     qualifies under  Section 202.056, 202.058, or 202.059, subject to
2-19     the certifications and approvals required by those sections.
2-20           SECTION 3.  This Act takes effect September 1, 1999, and
2-21     applies only to oil produced on or after that date.
2-22           SECTION 4.  The importance of this legislation and the
2-23     crowded condition of the calendars in both houses create an
2-24     emergency and an imperative public necessity that the
2-25     constitutional rule requiring bills to be read on three several
2-26     days in each house be suspended, and this rule is hereby suspended.