1-1 By: Bivins S.B. No. 344
1-2 (In the Senate - Filed January 23, 2001; January 24, 2001,
1-3 read first time and referred to Committee on Finance;
1-4 April 24, 2001, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 10, Nays 0, 1 present, not
1-6 voting; April 24, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 344 By: Truan
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the rates of the gas and oil severance taxes.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 ARTICLE 1
1-13 SECTION 1.01. Section 201.052, Tax Code, is amended to read
1-14 as follows:
1-15 Sec. 201.052. Rate of Tax. (a) Each month, the comptroller
1-16 shall certify the average closing cost of gas, as recorded on the
1-17 New York Mercantile Exchange (NYMEX), for the previous three
1-18 months. The comptroller shall publish certifications under this
1-19 subsection in the Texas Register. The tax imposed by this chapter
1-20 on gas produced and saved during a particular month is at the rate
1-21 of:
1-22 (1) 7.5 percent of the market value of gas produced
1-23 and saved in this state by the producer during that month if the
1-24 average closing price of gas certified by the comptroller for the
1-25 previous three-month period is more than $3 per MMBtu;
1-26 (2) five percent of the market value of gas produced
1-27 and saved in this state by the producer during that month if the
1-28 average closing price of gas certified by the comptroller for the
1-29 previous three-month period is equal to or more than $1.25 per
1-30 MMBtu but not more than $3 per MMBtu; and
1-31 (3) two percent of the market value of gas produced
1-32 and saved in this state by the producer during that month if the
1-33 average closing price of gas certified by the comptroller for the
1-34 previous three-month period is less than $1.25 per MMBtu.
1-35 (b) The minimum tax rate on sweet and sour gas produced and
1-36 saved in this state is 121/1,500 of one cent for each 1,000 cubic
1-37 feet.
1-38 (c) If the tax is paid on gas at a higher rate than required
1-39 by Subsection (a), the person paying the tax in entitled to a
1-40 credit against taxes imposed by this chapter for the amount
1-41 overpaid. To receive the credit, the person must apply to the
1-42 comptroller for the credit not later than the expiration of the
1-43 applicable period for filing a tax refund under Section 111.104.
1-44 SECTION 1.02. Subchapter B, Chapter 201, Tax Code, is
1-45 amended by adding Section 201.0525 to read as follows:
1-46 Sec. 201.0525. TAX CREDIT FOR CERTAIN TAX PAYMENTS. (a) A
1-47 person paying a tax under this chapter during the period beginning
1-48 on September 1, 2001, and ending on August 31, 2004, is entitled to
1-49 a credit against taxes imposed by this chapter in an amount equal
1-50 to the difference between:
1-51 (1) the amount of taxes the person paid under this
1-52 chapter during that period under the tax rates prescribed by
1-53 Section 201.052, as that section existed during that period; and
1-54 (2) the amount of taxes the person would have paid
1-55 under this chapter during that period under the tax rates
1-56 prescribed by Section 201.052, as that section exists on September
1-57 1, 2004.
1-58 (b) To receive the credit, the person must apply to the
1-59 comptroller for the credit on or after September 1, 2004, and not
1-60 later than the expiration of the applicable period for filing a tax
1-61 refund under Section 111.104.
1-62 SECTION 1.03. Section 202.052, Tax Code, is amended to read
1-63 as follows:
1-64 Sec. 202.052. RATE OF TAX. (a) Each month, the comptroller
2-1 shall certify the average closing cost of West Texas Intermediate
2-2 crude oil, as recorded on the New York Mercantile Exchange (NYMEX),
2-3 for the previous three months. The comptroller shall publish
2-4 certifications under this subsection in the Texas Register. The
2-5 tax imposed by this chapter on oil produced in this state during a
2-6 particular month is at the rate of:
2-7 (1) 4.6 percent of the market value of oil produced in
2-8 this state during that month if the average closing price of West
2-9 Texas Intermediate crude oil certified by the comptroller for the
2-10 previous three-month period is more than $20 per barrel, or 4.6
2-11 cents for each barrel of 42 standard gallons of oil produced in
2-12 this state during that month, whichever rate results in the greater
2-13 amount of tax;
2-14 (2) 2.3 percent of the market value of oil produced in
2-15 this state during that month if the average closing price of West
2-16 Texas Intermediate crude oil certified by the comptroller for the
2-17 previous three-month period is equal to or more than $12 but not
2-18 more than $20 per barrel, or 2.3 cents for each barrel of 42
2-19 standard gallons of oil produced in this state during that month,
2-20 whichever rate results in the greater amount of tax; and
2-21 (3) one percent of the market value of oil produced in
2-22 this state during that month if the average closing price of West
2-23 Texas Intermediate crude oil certified by the comptroller for the
2-24 previous three-month period is less than $12, or one cent for each
2-25 barrel of 42 standard gallons of oil produced in this state during
2-26 that month, whichever rate results in the greater amount of tax.
2-27 (b) For oil produced in this state from a new or expanded
2-28 enhanced recovery project that qualifies under Section 202.054 of
2-29 this code, the rate of the tax imposed by this chapter is one-half
2-30 of the applicable rate prescribed by Subsection (a) [2.3 percent of
2-31 the market value of the oil].
2-32 (c) The exemptions described by Sections 202.056 and 202.059
2-33 apply to oil produced in this state from a well that qualifies
2-34 under Section 202.056 or 202.059, subject to the certifications and
2-35 approvals required by those sections.
2-36 (d) If the tax is paid on oil at a higher rate than required
2-37 by Subsection (a) or (b), the person paying the tax is entitled to
2-38 a credit against taxes imposed by this chapter for the amount
2-39 overpaid. To receive the credit, the person must apply to the
2-40 comptroller for the credit not later than the expiration of the
2-41 applicable period for filing a tax refund under Section 111.104.
2-42 SECTION 1.04. Subchapter B, Chapter 202, Tax Code, is
2-43 amended by adding Section 202.0525 to read as follows:
2-44 Sec. 202.0525. TAX CREDIT FOR CERTAIN TAX PAYMENTS. (a) A
2-45 person paying a tax under this chapter during the period beginning
2-46 on September 1, 2001, and ending on August 31, 2004, is entitled to
2-47 a credit against taxes imposed by this chapter in an amount equal
2-48 to the difference between:
2-49 (1) the amount of taxes the person paid under this
2-50 chapter during that period under the tax rates prescribed by
2-51 Section 202.052, as that section existed during that period; and
2-52 (2) the amount of taxes the person would have paid
2-53 under this chapter during that period under the tax rates
2-54 prescribed by Section 202.052, as that section exists on September
2-55 1, 2004.
2-56 (b) To receive the credit, the person must apply to the
2-57 comptroller for the credit on or after September 1, 2004, and not
2-58 later than the expiration of the applicable period for filing a tax
2-59 refund under Section 111.104.
2-60 SECTION 1.05. (a) Sections 1.01 through 1.04 of this Act
2-61 takes effect September 1, 2004. This section takes effect
2-62 September 1, 2001.
2-63 (b) Beginning September 1, 2001, the comptroller of public
2-64 accounts shall monitor market prices to determine the validity of
2-65 any credit applications submitted under Sections 201.0525 and
2-66 202.0525, Tax Code, as added by this Act.
2-67 (c) As soon as practicable after the effective date of
2-68 Sections 1.01 through 1.04 of this Act, the comptroller of public
2-69 accounts shall perform the initial certification determination
3-1 required by Sections 201.052 and 202.052, Tax Code, as amended by
3-2 this Act. The initial certification determination must cover the
3-3 three-month period beginning on June 1, 2004.
3-4 (d) The change in law made by Sections 1.01 through 1.04 of
3-5 this Act does not affect tax liability accruing before the
3-6 effective date of those sections. That liability continues in
3-7 effect as if Sections 1.01 through 1.04 of this Act had not been
3-8 enacted, and the former law is continued in effect for the
3-9 collection of taxes due and for civil and criminal enforcement of
3-10 the liability for those taxes.
3-11 ARTICLE 2
3-12 SECTION 2.01. Section 201.052, Tax Code, is amended to read
3-13 as follows:
3-14 Sec. 201.052. RATE OF TAX. (a) The tax imposed by this
3-15 chapter is at the rate of 7.5 percent of the market value of gas
3-16 produced and saved in this state by the producer.
3-17 (b) The minimum tax rate on sweet and sour gas produced and
3-18 saved in this state is 121/1,500 of one cent for each 1,000 cubic
3-19 feet.
3-20 SECTION 2.02. Section 202.052, Tax Code, is amended to read
3-21 as follows:
3-22 Sec. 202.052. RATE OF TAX. (a) The tax imposed by this
3-23 chapter is at the rate of 4.6 percent of the market value of oil
3-24 produced in this state or 4.6 cents for each barrel of 42 standard
3-25 gallons of oil produced in this state, whichever rate results in
3-26 the greater amount of tax.
3-27 (b) For oil produced in this state from a new or expanded
3-28 enhanced recovery project that qualifies under Section 202.054 of
3-29 this code, the rate of the tax imposed by this Chapter is 2.3
3-30 percent of the market value of the oil.
3-31 (c) The exemptions described by Sections 202.056 and 202.059
3-32 apply to oil produced in this state from a well that qualifies
3-33 under Section 202.056 or 202.059, subject to the certifications and
3-34 approvals required by those sections.
3-35 SECTION 2.03. (a) This article takes effect September 1,
3-36 2006, and applies to gas and oil produced on or after that date.
3-37 Gas and oil produced before the effective date of this article are
3-38 governed by law in effect when the gas and oil were produced, and
3-39 that law is continued in effect for that purpose.
3-40 (b) The change in law made by this article does not affect
3-41 tax liability accruing before the effective date of this article.
3-42 That liability continues in effect as if this article had not been
3-43 enacted, and the former law is continued in effect for the
3-44 collection of taxes due and for civil and criminal enforcement of
3-45 the liability for those taxes.
3-46 * * * * *