1-1 By: Counts (Senate Sponsor - Haywood) H.B. No. 3348 1-2 (In the Senate - Received from the House May 11, 2001; 1-3 May 11, 2001, read first time and referred to Committee on Natural 1-4 Resources; May 11, 2001, reported favorably by the following vote: 1-5 Yeas 6, Nays 0; May 11, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the Texas Energy Resource Council; authorizing the 1-9 imposition of an assessment on producers of oil, gas, and 1-10 condensate. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Title 70, Revised Statutes, is amended by adding 1-13 Article 4413(47g) to read as follows: 1-14 Art. 4413(47g). TEXAS ENERGY RESOURCE COUNCIL 1-15 PART 1. GENERAL PROVISIONS 1-16 Sec. 1.01. DEFINITIONS. In this article: 1-17 (1) "Condensate" has the meaning assigned by Section 1-18 201.001, Tax Code. 1-19 (2) "First purchaser" has the meaning assigned by 1-20 Section 201.001 or 202.001, Tax Code, as applicable. 1-21 (3) "Gas" has the meaning assigned by Section 201.001, 1-22 Tax Code. 1-23 (4) "Oil" has the meaning assigned by Section 202.001, 1-24 Tax Code. 1-25 (5) "Person" includes an individual or group of 1-26 individuals and a partnership, corporation, association, 1-27 cooperative, or other legal entity. 1-28 (6) "Producer" has the meaning assigned by Section 1-29 201.001 or 202.001, Tax Code, as applicable. 1-30 PART 2. TEXAS ENERGY RESOURCE COUNCIL 1-31 Sec. 2.01. COMPOSITION OF COUNCIL. (a) The Texas Energy 1-32 Resource Council is composed of 15 members. 1-33 (b) The governor shall appoint to serve on the council five 1-34 members as follows: 1-35 (1) one person who must be a member of the Texas Oil 1-36 and Gas Association; 1-37 (2) one person who must be a member of the Texas 1-38 Independent Producers and Royalty Owners Association; 1-39 (3) one person who must be a member of the Permian 1-40 Basin Petroleum Association; 1-41 (4) one person who must be a member of The Alliance of 1-42 Energy Producers; and 1-43 (5) one person who must be a member of the Panhandle 1-44 Producers and Royalty Owners Association. 1-45 (c) The governor shall appoint to serve on the council seven 1-46 members from lists of nominees provided by the organizations listed 1-47 in Subsection (b) of this section. The governor shall make at 1-48 least one appointment from each organization's list. The governor 1-49 may reject the nominees on a list and request a new list of 1-50 different nominees. 1-51 (d) The members of the council by majority vote shall 1-52 appoint to serve on the council three members as follows: 1-53 (1) one representative of royalty owners; 1-54 (2) one representative of the crude oil purchasing 1-55 industry; and 1-56 (3) one representative of the pipeline industry. 1-57 Sec. 2.02. TERMS; VACANCIES. (a) The members of the council 1-58 serve for staggered six-year terms, with the terms of five members 1-59 expiring February 1 of each odd-numbered year. 1-60 (b) A vacancy on the council shall be filled for the 1-61 unexpired portion of the term in the same manner as the original 1-62 appointment. 1-63 Sec. 2.03. OFFICERS. (a) The members of the council 1-64 annually shall elect a presiding officer of the council. 2-1 (b) The council may elect other officers it considers 2-2 necessary. 2-3 Sec. 2.04. COMPENSATION. A member of the council may not 2-4 receive compensation for service performed for the council. A 2-5 member is entitled to reimbursement, subject to any applicable 2-6 limitation provided by the General Appropriations Act, for actual 2-7 or necessary expenses incurred in performing services as a member 2-8 of the council. Money paid to a council member under this section 2-9 shall be paid from the energy resource account. 2-10 PART 3. POWERS AND DUTIES OF COUNCIL 2-11 Sec. 3.01. POWERS AND DUTIES OF COUNCIL. The council shall: 2-12 (1) coordinate a program designed to: 2-13 (A) promote environmentally sound energy 2-14 production methods and technologies; 2-15 (B) support educational activities regarding the 2-16 development of energy resources in this state; 2-17 (C) support job training and research activities 2-18 regarding energy production; 2-19 (D) educate the public regarding the importance 2-20 of the oil, natural gas, and pipeline industries; 2-21 (E) promote the exploration for and production 2-22 of energy; and 2-23 (F) promote pipeline safety; and 2-24 (2) implement the other provisions of this article. 2-25 PART 4. ENERGY RESOURCE ACCOUNT 2-26 Sec. 4.01. ENERGY RESOURCE ACCOUNT. (a) The energy resource 2-27 account is an account in the general revenue fund that may be 2-28 appropriated only to the council for the purposes of this article. 2-29 (b) The energy resource account consists of: 2-30 (1) gifts and grants; 2-31 (2) transfers of money to the account by the 2-32 legislature; and 2-33 (3) assessments collected under Part 5 of this 2-34 article. 2-35 PART 5. ASSESSMENT 2-36 Sec. 5.01. IMPOSITION OF ASSESSMENT. (a) An assessment is 2-37 imposed on each producer of oil, gas, or condensate. The amount of 2-38 the assessment is four-hundredths of one percent of the market 2-39 value of oil, gas, or condensate produced and saved in this state 2-40 by the producer. The market value of oil, gas, or condensate is 2-41 its value at the mouth of the well from which it is produced. 2-42 (b) Notwithstanding Subsection (a) of this section, a 2-43 producer may not be assessed more than $150,000 in any year. 2-44 (c) Except as otherwise provided by this article, Chapters 2-45 201 and 202, Tax Code, apply to the assessment imposed by this 2-46 article as if the assessment were a tax imposed by those chapters. 2-47 (d) The assessment imposed by this article is not an 2-48 occupation tax. 2-49 (e) A first purchaser or producer, as applicable, shall 2-50 include as a separate item in any report required by Chapter 201 or 2-51 202, Tax Code, any required information relating to the assessment 2-52 imposed by this article. 2-53 Sec. 5.02. DEPOSIT OF ASSESSMENT. (a) Except as provided by 2-54 Subsection (b) of this section, the comptroller shall deposit an 2-55 assessment collected under this article to the credit of the energy 2-56 resource account. 2-57 (b) The comptroller shall retain a portion of an assessment 2-58 collected under this article to cover the cost of administering the 2-59 imposition and collection of the assessment. The comptroller by 2-60 rule shall specify the portion of the assessment to be retained. 2-61 Sec. 5.03. COLLECTION OF ASSESSMENT. (a) The council is 2-62 responsible for taking appropriate legal action to collect any 2-63 assessment that is not paid to the comptroller. The comptroller is 2-64 not responsible for collecting any assessment that is not paid to 2-65 the comptroller. 2-66 (b) The comptroller shall report to the council any 2-67 information the comptroller obtains regarding the failure of any 2-68 person to properly pay an assessment and shall provide to the 2-69 council any documentation the comptroller may have of that failure. 3-1 Sec. 5.04. REFUND OF ASSESSMENT. (a) A person is entitled 3-2 to a refund of an assessment paid by the person during the 3-3 preceding state fiscal year if the person submits a request for a 3-4 refund as provided by this section. 3-5 (b) A request for a refund must be made to the comptroller 3-6 not later than the third calendar month following the state fiscal 3-7 year for which the refund is requested. The request must be in the 3-8 form and include the information required by the comptroller. 3-9 (c) If the assessment was paid by the producer, the producer 3-10 must submit the refund request, and any refund made shall be paid 3-11 to the producer. If the assessment was paid by a first purchaser 3-12 on behalf of the producer, the first purchaser, at the request of 3-13 the producer, shall submit a request for a refund, and any refund 3-14 made shall be paid to the first purchaser. The first purchaser 3-15 shall refund to the producer the amount refunded not later than the 3-16 60th day after the date the first purchaser receives the refund. 3-17 (d) The council shall give notice of the right to request a 3-18 refund through: 3-19 (1) press releases; 3-20 (2) paid advertisements placed in the newspaper with 3-21 the largest circulation in each county of the state; and 3-22 (3) other means it considers appropriate. 3-23 (e) The comptroller shall determine the validity of a 3-24 request for a refund. The comptroller shall perform the 3-25 comptroller's duties under this section in a manner that minimizes, 3-26 to the extent practicable and appropriate, the burden on persons 3-27 providing information to the comptroller. 3-28 (f) If the comptroller determines that a person is entitled 3-29 to a refund, the comptroller shall refund the amount of the 3-30 assessment paid during the preceding state fiscal year, together 3-31 with interest at a rate equal to the average rate paid over the 3-32 preceding calendar year on United States treasury bills with a 3-33 12-month maturity date. 3-34 (g) The comptroller shall make refunds under this section in 3-35 the order in which the comptroller receives requests for refunds. 3-36 Notwithstanding the other provisions of this section, the 3-37 comptroller may not make refunds in a state fiscal year in an 3-38 amount that, in the aggregate, exceeds 60 percent of the total 3-39 amount of assessments collected during the preceding state fiscal 3-40 year. 3-41 (h) The comptroller may adopt rules to implement this 3-42 section. 3-43 SECTION 2. (a) As soon as practicable after receiving the 3-44 lists described by Section 2.01(c), Article 4413(47g), Revised 3-45 Statutes, as added by this Act, the governor shall appoint persons 3-46 to serve on the Texas Energy Resource Council as required by 3-47 Sections 2.01(b) and (c), Article 4413(47g), Revised Statutes, as 3-48 added by this Act. The governor shall designate four persons to 3-49 serve on the council for terms expiring February 1, 2003, four 3-50 persons to serve on the council for terms expiring February 1, 3-51 2005, and four persons to serve on the council for terms expiring 3-52 February 1, 2007. 3-53 (b) As soon as practicable after taking office, the members 3-54 of the Texas Energy Resource Council appointed under Sections 3-55 2.01(b) and (c), Article 4413(47g), Revised Statutes, as added by 3-56 this Act, shall appoint one person to serve on the council for a 3-57 term expiring February 1, 2003, one person to serve on the council 3-58 for a term expiring February 1, 2005, and one person to serve on 3-59 the council for a term expiring February 1, 2007. 3-60 SECTION 3. (a) Except as otherwise provided by this section, 3-61 this Act takes effect September 1, 2001. 3-62 (b) Part 5 of Article 4413(47g), Revised Statutes, as added 3-63 by this Act, takes effect January 1, 2002, and applies only to oil, 3-64 gas, and condensate produced and saved on or after that date. 3-65 * * * * *