1-1 AN ACT 1-2 relating to the Texas Energy Resource Council; authorizing the 1-3 imposition of an assessment on producers of oil, gas, and 1-4 condensate. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Title 70, Revised Statutes, is amended by adding 1-7 Article 4413(47g) to read as follows: 1-8 Art. 4413(47g). TEXAS ENERGY RESOURCE COUNCIL 1-9 PART 1. GENERAL PROVISIONS 1-10 Sec. 1.01. DEFINITIONS. In this article: 1-11 (1) "Condensate" has the meaning assigned by Section 1-12 201.001, Tax Code. 1-13 (2) "First purchaser" has the meaning assigned by 1-14 Section 201.001 or 202.001, Tax Code, as applicable. 1-15 (3) "Gas" has the meaning assigned by Section 201.001, 1-16 Tax Code. 1-17 (4) "Oil" has the meaning assigned by Section 202.001, 1-18 Tax Code. 1-19 (5) "Person" includes an individual or group of 1-20 individuals and a partnership, corporation, association, 1-21 cooperative, or other legal entity. 1-22 (6) "Producer" has the meaning assigned by Section 1-23 201.001 or 202.001, Tax Code, as applicable. 1-24 PART 2. TEXAS ENERGY RESOURCE COUNCIL 2-1 Sec. 2.01. COMPOSITION OF COUNCIL. (a) The Texas Energy 2-2 Resource Council is composed of 15 members. 2-3 (b) The executive officer, or a person designated by the 2-4 executive officer, of each of the following organizations serves on 2-5 the council: 2-6 (1) the Texas Oil & Gas Association; 2-7 (2) the Texas Independent Producers and Royalty Owners 2-8 Association; 2-9 (3) the Permian Basin Petroleum Association; 2-10 (4) The Texas Alliance of Energy Producers; and 2-11 (5) The Panhandle Producers and Royalty Owners 2-12 Association. 2-13 (c) The governor shall appoint to serve on the council seven 2-14 members from lists of nominees provided by the organizations listed 2-15 in Subsection (b) of this section. 2-16 (d) The members of the council by majority vote shall 2-17 appoint to serve on the council three members as follows: 2-18 (1) one representative of the crude oil purchasing 2-19 industry; 2-20 (2) one representative of the pipeline industry; and 2-21 (3) one representative of royalty owners. 2-22 Sec. 2.02. TERMS; VACANCIES. (a) The members of the council 2-23 appointed under Sections 2.01(c) and (d) of this article serve for 2-24 staggered six-year terms, with the terms of three or four members, 2-25 as applicable, expiring February 1 of each odd-numbered year. 2-26 (b) A vacancy in an appointive position on the council shall 2-27 be filled for the unexpired portion of the term in the same manner 3-1 as the original appointment. 3-2 Sec. 2.03. OFFICERS. (a) The members of the council 3-3 annually shall elect a presiding officer of the council. 3-4 (b) The council may elect other officers it considers 3-5 necessary. 3-6 Sec. 2.04. COMPENSATION. A member of the council may not 3-7 receive compensation for service performed for the council. A 3-8 member is entitled to reimbursement, subject to any applicable 3-9 limitation provided by the General Appropriations Act, for actual 3-10 or necessary expenses incurred in performing services as a member 3-11 of the council. Money paid to a council member under this section 3-12 shall be paid from the energy resource account. 3-13 PART 3. POWERS AND DUTIES OF COUNCIL 3-14 Sec. 3.01. POWERS AND DUTIES OF COUNCIL. The council shall: 3-15 (1) coordinate a program designed to: 3-16 (A) promote environmentally sound energy 3-17 production methods and technologies; 3-18 (B) support educational activities regarding the 3-19 development of energy resources in this state; 3-20 (C) support job training and research activities 3-21 regarding energy production; 3-22 (D) educate the public regarding the importance 3-23 of the oil, natural gas, and pipeline industries; 3-24 (E) promote the exploration for and production 3-25 of energy; and 3-26 (F) promote pipeline safety; and 3-27 (2) implement the other provisions of this article. 4-1 PART 4. ENERGY RESOURCE ACCOUNT 4-2 Sec. 4.01. ENERGY RESOURCE ACCOUNT. (a) The energy resource 4-3 account is an account in the general revenue fund that may be 4-4 appropriated only to the council for the purposes of this article. 4-5 (b) The energy resource account consists of: 4-6 (1) gifts and grants; 4-7 (2) transfers of money to the account by the 4-8 legislature; and 4-9 (3) assessments collected under Part 5 of this 4-10 article. 4-11 PART 5. ASSESSMENT 4-12 Sec. 5.01. IMPOSITION OF ASSESSMENT. (a) An assessment is 4-13 imposed on each producer of oil, gas, or condensate. The amount of 4-14 the assessment is four-hundredths of one percent of the market 4-15 value of oil, gas, or condensate produced and saved in this state 4-16 by the producer. The market value of oil, gas, or condensate is 4-17 its value at the mouth of the well from which it is produced. 4-18 (b) Notwithstanding Subsection (a) of this section, a 4-19 producer may not be assessed more than $150,000 in any year. For 4-20 purposes of the limitation provided by this subsection on 4-21 assessments imposed on a producer, assessments imposed on an 4-22 affiliate or subsidiary, as defined by Article 13.02, Texas 4-23 Business Corporation Act, of a producer are considered to have been 4-24 imposed on the producer. 4-25 (c) Except as otherwise provided by this article, Chapters 4-26 201 and 202, Tax Code, apply to the assessment imposed by this 4-27 article as if the assessment were a tax imposed by those chapters. 5-1 (d) The assessment imposed by this article is not an 5-2 occupation tax. 5-3 (e) A first purchaser or producer, as applicable, shall 5-4 include as a separate item in any report required by Chapter 201 or 5-5 202, Tax Code, any required information relating to the assessment 5-6 imposed by this article. 5-7 Sec. 5.02. DEPOSIT OF ASSESSMENT. (a) Except as provided by 5-8 Subsection (b) of this section, the comptroller shall deposit an 5-9 assessment collected under this article to the credit of the energy 5-10 resource account. 5-11 (b) The comptroller shall retain a portion of an assessment 5-12 collected under this article to cover the cost of administering the 5-13 imposition and collection of the assessment. The comptroller by 5-14 rule shall specify the portion of the assessment to be retained. 5-15 Sec. 5.03. COLLECTION OF ASSESSMENT. (a) The council is 5-16 responsible for taking appropriate legal action to collect any 5-17 assessment that is not paid to the comptroller. The comptroller is 5-18 not responsible for collecting any assessment that is not paid to 5-19 the comptroller. 5-20 (b) The comptroller shall report to the council any 5-21 information the comptroller obtains regarding the failure of any 5-22 person to properly pay an assessment and shall provide to the 5-23 council any documentation the comptroller may have of that failure. 5-24 Sec. 5.04. REFUND OF ASSESSMENT. (a) A person is entitled 5-25 to a refund of an assessment paid by the person during the 5-26 preceding state fiscal year if the person submits a request for a 5-27 refund as provided by this section. 6-1 (b) A request for a refund must be made to the comptroller 6-2 not later than the third calendar month following the state fiscal 6-3 year for which the refund is requested. The request must be in the 6-4 form and include the information required by the comptroller. 6-5 (c) If the assessment was paid by the producer, the producer 6-6 must submit the refund request, and any refund made shall be paid 6-7 to the producer. If the assessment was paid by a first purchaser 6-8 on behalf of the producer, the first purchaser, at the request of 6-9 the producer, shall submit a request for a refund, and any refund 6-10 made shall be paid to the first purchaser. The first purchaser 6-11 shall refund to the producer the amount refunded not later than the 6-12 60th day after the date the first purchaser receives the refund. 6-13 (d) The council shall give notice of the right to request a 6-14 refund through: 6-15 (1) press releases; 6-16 (2) paid advertisements placed in the newspaper with 6-17 the largest circulation in each county of the state; and 6-18 (3) other means it considers appropriate. 6-19 (e) The comptroller shall determine the validity of a 6-20 request for a refund. The comptroller shall perform the 6-21 comptroller's duties under this section in a manner that minimizes, 6-22 to the extent practicable and appropriate, the burden on persons 6-23 providing information to the comptroller. 6-24 (f) If the comptroller determines that a person is entitled 6-25 to a refund, the comptroller shall refund the amount of the 6-26 assessment paid during the preceding state fiscal year, together 6-27 with interest at a rate equal to the average rate paid over the 7-1 preceding calendar year on United States treasury bills with a 7-2 12-month maturity date. 7-3 (g) The comptroller shall make refunds under this section in 7-4 the order in which the comptroller receives requests for refunds. 7-5 Notwithstanding the other provisions of this section, the 7-6 comptroller may not make refunds in a state fiscal year in an 7-7 amount that, in the aggregate, exceeds 60 percent of the total 7-8 amount of assessments collected during the preceding state fiscal 7-9 year. 7-10 (h) The comptroller may adopt rules to implement this 7-11 section. 7-12 SECTION 2. (a) As soon as practicable after receiving the 7-13 lists described by Section 2.01(c), Article 4413(47g), Revised 7-14 Statutes, as added by this Act, the governor shall appoint persons 7-15 to serve on the Texas Energy Resource Council. The governor shall 7-16 designate two persons to serve on the council for terms expiring 7-17 February 1, 2003, two persons to serve on the council for terms 7-18 expiring February 1, 2005, and three persons to serve on the 7-19 council for terms expiring February 1, 2007. 7-20 (b) As soon as practicable after taking office, the members 7-21 of the Texas Energy Resource Council designated or appointed under 7-22 Sections 2.01(b) and (c), Article 4413(47g), Revised Statutes, as 7-23 added by this Act, shall appoint one person to serve on the council 7-24 for a term expiring February 1, 2003, one person to serve on the 7-25 council for a term expiring February 1, 2005, and one person to 7-26 serve on the council for a term expiring February 1, 2007. 7-27 SECTION 3. (a) Except as otherwise provided by this section, 8-1 this Act takes effect September 1, 2001. 8-2 (b) Part 5 of Article 4413(47g), Revised Statutes, as added 8-3 by this Act, takes effect January 1, 2002, and applies only to oil, 8-4 gas, and condensate produced and saved on or after that date. _______________________________ _______________________________ President of the Senate Speaker of the House I certify that H.B. No. 3348 was passed by the House on May 11, 2001, by a non-record vote; that the House refused to concur in Senate amendments to H.B. No. 3348 on May 25, 2001, and requested the appointment of a conference committee to consider the differences between the two houses; and that the House adopted the conference committee report on H.B. No. 3348 on May 27, 2001, by a non-record vote. _______________________________ Chief Clerk of the House I certify that H.B. No. 3348 was passed by the Senate, with amendments, on May 22, 2001, by a viva-voce vote; at the request of the House, the Senate appointed a conference committee to consider the differences between the two houses; and that the Senate adopted the conference committee report on H.B. No. 3348 on May 27, 2001, by a viva-voce vote. _______________________________ Secretary of the Senate APPROVED: __________________________ Date __________________________ Governor