By: Bivins S.B. No. 344
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the rates of the gas and oil severance taxes.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 ARTICLE 1
1-5 SECTION 1.01. Section 201.052, Tax Code, is amended to read
1-6 as follows:
1-7 Sec. 201.052. Rate of Tax. (a) Each month, the comptroller
1-8 shall certify the average closing cost of gas, as recorded on the
1-9 New York Mercantile Exchange (NYMEX), for the previous three
1-10 months. The comptroller shall publish certifications under this
1-11 subsection in the Texas Register. The tax imposed by this chapter
1-12 on gas produced and saved during a particular month is at the rate
1-13 of:
1-14 (1) 7.5 percent of the market value of gas produced
1-15 and saved in this state by the producer during that month if the
1-16 average closing price of gas certified by the comptroller for the
1-17 previous three-month period is more than $3 per MMBtu;
1-18 (2) five percent of the market value of gas produced
1-19 and saved in this state by the producer during that month if the
1-20 average closing price of gas certified by the comptroller for the
1-21 previous three-month period is equal to or more than $1.25 per
1-22 MMBtu but not more than $3 per MMBtu; and
1-23 (3) two percent of the market value of gas produced
1-24 and saved in this state by the producer during that month if the
1-25 average closing price of gas certified by the comptroller for the
2-1 previous three-month period is less than $1.25 per MMBtu.
2-2 (b) The minimum tax rate on sweet and sour gas produced and
2-3 saved in this state is 121/1,500 of one cent for each 1,000 cubic
2-4 feet.
2-5 (c) If the tax is paid on gas at a higher rate than required
2-6 by Subsection (a), the person paying the tax in entitled to a
2-7 credit against taxes imposed by this chapter for the amount
2-8 overpaid. To receive the credit, the person must apply to the
2-9 comptroller for the credit not later than the expiration of the
2-10 applicable period for filing a tax refund under Section 111.104.
2-11 SECTION 1.02. Subchapter B, Chapter 201, Tax Code, is
2-12 amended by adding Section 201.0525 to read as follows:
2-13 Sec. 201.0525. TAX CREDIT FOR CERTAIN TAX PAYMENTS. (a) A
2-14 person paying a tax under this chapter during the period beginning
2-15 on September 1, 2001, and ending on August 31, 2004, is entitled to
2-16 a credit against taxes imposed by this chapter in an amount equal
2-17 to the difference between:
2-18 (1) the amount of taxes the person paid under this
2-19 chapter during that period under the tax rates prescribed by
2-20 Section 201.052, as that section existed during that period; and
2-21 (2) the amount of taxes the person would have paid
2-22 under this chapter during that period under the tax rates
2-23 prescribed by Section 201.052, as that section exists on September
2-24 1, 2004.
2-25 (b) To receive the credit, the person must apply to the
2-26 comptroller for the credit on or after September 1, 2004, and not
3-1 later than the expiration of the applicable period for filing a tax
3-2 refund under Section 111.104.
3-3 SECTION 1.03. Section 202.052, Tax Code, is amended to read
3-4 as follows:
3-5 Sec. 202.052. RATE OF TAX. (a) Each month, the comptroller
3-6 shall certify the average closing cost of West Texas Intermediate
3-7 crude oil, as recorded on the New York Mercantile Exchange (NYMEX),
3-8 for the previous three months. The comptroller shall publish
3-9 certifications under this subsection in the Texas Register. The
3-10 tax imposed by this chapter on oil produced in this state during a
3-11 particular month is at the rate of:
3-12 (1) 4.6 percent of the market value of oil produced in
3-13 this state during that month if the average closing price of West
3-14 Texas Intermediate crude oil certified by the comptroller for the
3-15 previous three-month period is more than $20 per barrel, or 4.6
3-16 cents for each barrel of 42 standard gallons of oil produced in
3-17 this state during that month, whichever rate results in the greater
3-18 amount of tax;
3-19 (2) 2.3 percent of the market value of oil produced in
3-20 this state during that month if the average closing price of West
3-21 Texas Intermediate crude oil certified by the comptroller for the
3-22 previous three-month period is equal to or more than $12 but not
3-23 more than $20 per barrel, or 2.3 cents for each barrel of 42
3-24 standard gallons of oil produced in this state during that month,
3-25 whichever rate results in the greater amount of tax; and
3-26 (3) one percent of the market value of oil produced in
4-1 this state during that month if the average closing price of West
4-2 Texas Intermediate crude oil certified by the comptroller for the
4-3 previous three-month period is less than $12, or one cent for each
4-4 barrel of 42 standard gallons of oil produced in this state during
4-5 that month, whichever rate results in the greater amount of tax.
4-6 (b) For oil produced in this state from a new or expanded
4-7 enhanced recovery project that qualifies under Section 202.054 of
4-8 this code, the rate of the tax imposed by this chapter is one-half
4-9 of the applicable rate prescribed by Subsection (a) [2.3 percent of
4-10 the market value of the oil].
4-11 (c) The exemptions described by Sections 202.056 and 202.059
4-12 apply to oil produced in this state from a well that qualifies
4-13 under Section 202.056 or 202.059, subject to the certifications and
4-14 approvals required by those sections.
4-15 (d) If the tax is paid on oil at a higher rate than required
4-16 by Subsection (a) or (b), the person paying the tax is entitled to
4-17 a credit against taxes imposed by this chapter for the amount
4-18 overpaid. To receive the credit, the person must apply to the
4-19 comptroller for the credit not later than the expiration of the
4-20 applicable period for filing a tax refund under Section 111.104.
4-21 SECTION 1.04. Subchapter B, Chapter 202, Tax Code, is
4-22 amended by adding Section 202.0525 to read as follows:
4-23 Sec. 202.0525. TAX CREDIT FOR CERTAIN TAX PAYMENTS. (a) A
4-24 person paying a tax under this chapter during the period beginning
4-25 on September 1, 2001, and ending on August 31, 2004, is entitled to
4-26 a credit against taxes imposed by this chapter in an amount equal
5-1 to the difference between:
5-2 (1) the amount of taxes the person paid under this
5-3 chapter during that period under the tax rates prescribed by
5-4 Section 202.052, as that section existed during that period; and
5-5 (2) the amount of taxes the person would have paid
5-6 under this chapter during that period under the tax rates
5-7 prescribed by Section 202.052, as that section exists on September
5-8 1, 2004.
5-9 (b) To receive the credit, the person must apply to the
5-10 comptroller for the credit on or after September 1, 2004, and not
5-11 later than the expiration of the applicable period for filing a tax
5-12 refund under Section 111.104.
5-13 SECTION 1.05. (a) Sections 1.01 through 1.04 of this Act
5-14 take effect September 1, 2004. This section takes effect September
5-15 1, 2001.
5-16 (b) Beginning September 1, 2001, the comptroller of public
5-17 accounts shall monitor market prices to determine the validity of
5-18 any credit applications submitted under Sections 201.0525 and
5-19 202.0525, Tax Code, as added by this Act.
5-20 (c) As soon as practicable after the effective date of
5-21 Sections 1.01 through 1.04 of this Act, the comptroller of public
5-22 accounts shall perform the initial certification determination
5-23 required by Sections 201.052 and 202.052, Tax Code, as amended by
5-24 this Act. The initial certification determination must cover the
5-25 three-month period beginning on June 1, 2004.
5-26 (d) The change in law made by Sections 1.01 through 1.04 of
6-1 this Act does not affect tax liability accruing before the
6-2 effective date of those sections. That liability continues in
6-3 effect as if Sections 1.01 through 1.04 of this Act had not been
6-4 enacted, and the former law is continued in effect for the
6-5 collection of taxes due and for civil and criminal enforcement of
6-6 the liability for those taxes.
6-7 ARTICLE 2
6-8 SECTION 2.01. Section 201.052, Tax Code, is amended to read
6-9 as follows:
6-10 Sec. 201.052. RATE OF TAX. (a) The tax imposed by this
6-11 chapter is at the rate of 7.5 percent of the market value of gas
6-12 produced and saved in this state by the producer.
6-13 (b) The minimum tax rate on sweet and sour gas produced and
6-14 saved in this state is 121/1,500 of one cent for each 1,000 cubic
6-15 feet.
6-16 SECTION 2.02. Section 202.052, Tax Code, is amended to read
6-17 as follows:
6-18 Sec. 202.052. RATE OF TAX. (a) The tax imposed by this
6-19 chapter is at the rate of 4.6 percent of the market value of oil
6-20 produced in this state or 4.6 cents for each barrel of 42 standard
6-21 gallons of oil produced in this state, whichever rate results in
6-22 the greater amount of tax.
6-23 (b) For oil produced in this state from a new or expanded
6-24 enhanced recovery project that qualifies under Section 202.054 of
6-25 this code, the rate of the tax imposed by this Chapter is 2.3
6-26 percent of the market value of the oil.
7-1 (c) The exemptions described by Sections 202.056 and 202.059
7-2 apply to oil produced in this state from a well that qualifies
7-3 under Section 202.056 or 202.059, subject to the certifications and
7-4 approvals required by those sections.
7-5 SECTION 2.03. (a) This article takes effect September 1,
7-6 2006, and applies to gas and oil produced on or after that date.
7-7 Gas and oil produced before the effective date of this article are
7-8 governed by the law in effect when the gas and oil were produced,
7-9 and that law is continued in effect for that purpose.
7-10 (b) The change in law made by this article does not affect
7-11 tax liability accruing before the effective date of this article.
7-12 That liability continues in effect as if this article had not been
7-13 enacted, and the former law is continued in effect for the
7-14 collection of taxes due and for civil and criminal enforcement of
7-15 the liability for those taxes.
7-16 COMMITTEE AMENDMENT NO. 1
7-17 Amend Senate Bill 344, engrossed version, as follows:
7-18 (1) On page 1, line 17, by striking "$3" and substituting
7-19 "$2.50";
7-20 (2) On page 1, line 21, by striking "$1.25" and substituting
7-21 "$1.80";
7-22 (3) On page 1, line 22, by striking "$3" and substituting
7-23 "$2.50";
7-24 (4) On page 2, line 1, by striking "$1.25" and substituting
7-25 "$1.80";
7-26 (5) On page 3, line 15, by striking "$20" and substituting
8-1 "$17";
8-2 (6) On page 3, line 22, by striking "$12" and substituting
8-3 "$15";
8-4 (7) On page 3, line 23, by striking "$20" and substituting
8-5 "$17"; and
8-6 (8) On page 4, line 3, by striking "$12" and substituting
8-7 "$15".
8-8 McCall