By Counts H.B. No. 3099
77R9384 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the extension of existing severance tax incentives to
1-3 maintain existing levels of production of natural gas and crude
1-4 oil.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 201.057(b), Tax Code, is amended to read
1-7 as follows:
1-8 (b) High-cost gas as defined in Subsection (a)(2)(A) of this
1-9 section produced from a well that is spudded or completed between
1-10 May 24, 1989, and September 1, 1996, is exempt from the tax imposed
1-11 by this chapter during the period beginning September 1, 1991, and
1-12 ending August 31, 2005 [2001]. High-cost gas as defined in
1-13 Subsection (a)(2)(B) of this section produced from any well
1-14 regardless of spud date or completion date is eligible for refunds
1-15 of tax paid and exemption from the tax imposed by this chapter for
1-16 production occurring during the period beginning the first day of
1-17 the month after commission approval of a co-production project and
1-18 ending August 31, 2005 [2001]; provided, however, in the event
1-19 co-production ceases, the exemption shall also cease on the first
1-20 day of the first calendar month that begins on or after the 91st
1-21 day following the date of termination or co-production operations.
1-22 Tax must be paid when due at the rate provided in Section 201.052
1-23 of this code for all high-cost gas, as defined in Subsection
1-24 (a)(2)(B) of this section, produced on or before July 31, 1995. On
2-1 or after September 1, 1995, the operator may apply to the
2-2 comptroller for a refund and shall be entitled to receive a refund
2-3 of all taxes paid on such high-cost gas produced on or after the
2-4 first day of the calendar month after commission approval of the
2-5 co-production project from which such gas was produced and that is
2-6 otherwise eligible for the tax exemption.
2-7 SECTION 2. Section 201.057(c), Tax Code, is amended to read
2-8 as follows:
2-9 (c) High-cost gas as defined in Subsection (a)(2)(A)
2-10 produced from a well that is spudded or completed after August 31,
2-11 1996, and before September 1, 2001 [2010], is entitled to a
2-12 reduction of the tax imposed by this chapter for the first 120
2-13 consecutive calendar months beginning on the first day of
2-14 production, or until the cumulative value of the tax reduction
2-15 equals 50 percent of the drilling and completion costs incurred for
2-16 the well, whichever occurs first. The amount of tax reduction
2-17 shall be computed by subtracting from the tax rate imposed by
2-18 Section 201.052 the product of that tax rate times the ratio of
2-19 drilling and completion costs incurred for the well to twice the
2-20 median drilling and completion costs for high-cost wells as defined
2-21 in Subsection (a)(2)(A) spudded or completed during the previous
2-22 state fiscal year, except that the effective rate of tax may not be
2-23 reduced below zero.
2-24 SECTION 3. Section 201.057, Tax Code, is amended by adding a
2-25 new subchapter (d) as follows and renumbering subsequent
2-26 subchapters:
2-27 (d) High-cost gas as defined in Subsection (a)(2)(A)
3-1 produced from a well that is spudded or completed after August 31,
3-2 2001, and before September 1, 2005, is exempt from the tax imposed
3-3 by this chapter for the first 120 consecutive calendar months
3-4 beginning on the first day of production.
3-5 SECTION 4. Section 202.054, Tax Code, is amended by adding
3-6 Subsection (o) to read as follows:
3-7 (o) Notwithstanding any other provisions of this chapter any
3-8 oil produced in this state that qualifies for the recovered oil tax
3-9 rate on or before August 31, 2001 shall continue to be taxed at the
3-10 recovered oil tax rate until August 31, 2005 or the ten years
3-11 provided in subsection (g) of this Section, whichever is later.
3-12 SECTION 5. Section 202.056, Tax Code, is amended by adding
3-13 Subsection (j) to read as follows:
3-14 (j) Notwithstanding any other provisions of this section,
3-15 all production from certified three year inactive wells shall be
3-16 exempt from taxes imposed by this chapter until August 31, 2005.
3-17 SECTION 6. (a) This Act takes effect September 1, 2001.