SRC-TBR S.B. 344 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 344
77R3199 CBH-DBy: Bivins
Finance
3/14/2001
As Filed


DIGEST AND PURPOSE 

Currently, state law requires the state to collect severance taxes for each
barrel of oil and each Mcf (thousand cubic feet) of natural gas produced in
the state.  As proposed, S.B. 344 implements a sliding scale for the
collection of crude oil and natural gas severance taxes. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 201.052, Tax Code, to require the comptroller to
certify the average closing cost of gas, as recorded on the New York
Mercantile Exchange (NYMEX), for the previous three months.  Requires the
comptroller to publish certifications under this subsection in the Texas
Register.  Provides the tax imposed by this chapter on gas produced and
saved during a particular month is at the rate of certain valuations. 

(c)  Provides that if the tax is paid on gas at a higher rate than required
by Subsection (a), the person paying the tax is entitled to a credit
against taxes imposed by this chapter for the amount overpaid.  Requires
the person, to receive the credit, to apply to the comptroller for the
credit not later than the expiration of the applicable period for filing a
tax refund under Section 111.104. 

SECTION 2.  Amends Section 202.052, Tax Code, by requiring the comptroller
to certify each month the average closing cost of West Texas Intermediate
crude oil, as recorded on the NYMEX, for the previous three months.
Requires the comptroller to publish certifications under this subsection in
the Texas Register.  Provides that the tax imposed by this chapter on oil
produced in this state during a particular month is at the rate of certain
valuations.   

(b)  Provides that for oil produced in this state from a new or expanded
enhanced recovery project that qualifies under Section 202.054 of this
code, the rate of the tax imposed by this chapter is one-half of the
applicable rate prescribed by Subsection (a).  Deletes language regarding
2.3 percent of the market value of the oil. 

 (d)  Makes a conforming change.

SECTION 3.  Effective date: September 1, 2001.
  Makes application of this Act regarding gas and oil production
prospective. 

(b)  Requires the comptroller, as soon as practicable after the effective
date of this Act, the comptroller to perform the initial certification
determinations as required by Sections 201.052 and 202.052, Tax Code, as
amended by this Act.  Requires the initial certification determination to
cover the three-month period beginning on June 1, 2001. 
 
  (c)  Makes application of this Act regarding tax liability prospective.