1-1 AN ACT
1-2 relating to the application of the oil and gas severance taxes to
1-3 high-cost gas production and inactive oil and gas leases.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 201.057(c), Tax Code, is amended to read
1-6 as follows:
1-7 (c) High-cost gas as defined in Subsection (a)(2)(A)
1-8 produced from a well that is spudded or completed after August 31,
1-9 1996, and before September 1, 2010 [2002], is entitled to a
1-10 reduction of the tax imposed by this chapter for the first 120
1-11 consecutive calendar months beginning on the first day of
1-12 production, or until the cumulative value of the tax reduction
1-13 equals 50 percent of the drilling and completion costs incurred for
1-14 the well, whichever occurs first. The amount of tax reduction
1-15 shall be computed by subtracting from the tax rate imposed by
1-16 Section 201.052 the product of that tax rate times the ratio of
1-17 drilling and completion costs incurred for the well to twice the
1-18 median drilling and completion costs for high-cost wells as defined
1-19 in Subsection (a)(2)(A) spudded or completed during the previous
1-20 state fiscal year, except that the effective rate of tax may not be
1-21 reduced below zero.
1-22 SECTION 2. Sections 202.056(c) and (d), Tax Code, are
1-23 amended to read as follows:
1-24 (c) If the commission designates a three-year inactive well
2-1 under this section, it shall issue a certificate designating the
2-2 well as a three-year inactive well as defined by Subsection (a)(3)
2-3 of this section. The commission may not designate a three-year
2-4 inactive well under this section after February 29, 1996. If the
2-5 commission designates a two-year inactive well under this section,
2-6 it shall issue a certificate designating the well as a two-year
2-7 inactive well as defined by Subsection (a)(4) of this section. The
2-8 commission may not designate a two-year inactive well under this
2-9 section after February 28, 2010 [29, 2000].
2-10 (d) An application for three-year inactive well
2-11 certification shall be made during the period of September 1, 1993,
2-12 through August 31, 1995, to qualify for the tax exemption under
2-13 this section. An application for two-year inactive well
2-14 certification shall be made during the period September 1, 1997,
2-15 through August 31, 2009 [1999], to qualify for the tax exemption
2-16 under this section. Hydrocarbons sold after the date of
2-17 certification are eligible for the tax exemption.
2-18 SECTION 3. The importance of this legislation and the
2-19 crowded condition of the calendars in both houses create an
2-20 emergency and an imperative public necessity that the
2-21 constitutional rule requiring bills to be read on three several
2-22 days in each house be suspended, and this rule is hereby suspended,
2-23 and that this Act take effect and be in force from and after its
2-24 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2615 was passed by the House on April
27, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2615 was passed by the Senate on May
18, 1999, by the following vote: Yeas 25, Nays 2, 3 present, not
voting.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor