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.
1-55 * * * * *