1-1     By:  Counts, et al. (Senate Sponsor - Brown)          H.B. No. 2615
 1-2           (In the Senate - Received from the House April 28, 1999;
 1-3     April 29, 1999, read first time and referred to Committee on
 1-4     Finance; May 13, 1999, reported favorably by the following vote:
 1-5     Yeas 7, Nays 1; May 13, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the application of the oil and gas severance taxes to
 1-9     high-cost gas production and inactive oil and gas leases.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 201.057(c), Tax Code, is amended to read
1-12     as follows:
1-13           (c)  High-cost gas as defined in Subsection (a)(2)(A)
1-14     produced from a well that is spudded or completed after August 31,
1-15     1996, and before September 1, 2010 [2002], is entitled to a
1-16     reduction of the tax imposed by this chapter for the first 120
1-17     consecutive calendar months beginning on the first day of
1-18     production, or until the cumulative value of the tax reduction
1-19     equals 50 percent of the drilling and completion costs incurred for
1-20     the well, whichever occurs first.  The amount of tax reduction
1-21     shall be computed by subtracting from the tax rate imposed by
1-22     Section 201.052 the product of that tax rate times the ratio of
1-23     drilling and completion costs incurred for the well to twice the
1-24     median drilling and completion costs for high-cost wells as defined
1-25     in Subsection (a)(2)(A) spudded or completed during the previous
1-26     state fiscal year, except that the effective rate of tax may not be
1-27     reduced below zero.
1-28           SECTION 2.  Sections 202.056(c) and (d), Tax Code, are
1-29     amended to read as follows:
1-30           (c)  If the commission designates a three-year inactive well
1-31     under this section, it shall issue a certificate designating the
1-32     well as a three-year inactive well as defined by Subsection (a)(3)
1-33     of this section.  The commission may not designate a three-year
1-34     inactive well under this section after February 29, 1996.  If the
1-35     commission designates a two-year inactive well under this section,
1-36     it shall issue a certificate designating the well as a two-year
1-37     inactive well as defined by Subsection (a)(4) of this section.  The
1-38     commission may not designate a two-year inactive well under this
1-39     section after February 28, 2010 [29, 2000].
1-40           (d)  An application for three-year inactive well
1-41     certification shall be made during the period of September 1, 1993,
1-42     through August 31, 1995, to qualify for the tax exemption under
1-43     this section.  An application for two-year inactive well
1-44     certification shall be made during the period September 1, 1997,
1-45     through August 31, 2009 [1999], to qualify for the tax exemption
1-46     under this section.  Hydrocarbons sold after the date of
1-47     certification are eligible for the tax exemption.
1-48           SECTION 3.  The importance of this legislation and the
1-49     crowded condition of the calendars in both houses create an
1-50     emergency and an imperative public necessity that the
1-51     constitutional rule requiring bills to be read on three several
1-52     days in each house be suspended, and this rule is hereby suspended,
1-53     and that this Act take effect and be in force from and after its
1-54     passage, and it is so enacted.
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