By Haywood                                            S.B. No. 1749
         77R7529 DAK-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to exempting certain gas used on the lease from the
 1-3     production tax.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 201.053, Tax Code, is amended to read as
 1-6     follows:
 1-7           Sec. 201.053. GAS NOT TAXED.  The tax imposed by this chapter
 1-8     does not apply to gas:
 1-9                 (1)  injected into the earth in this state, unless sold
1-10     for that purpose;
1-11                 (2)  produced from oil wells with oil and lawfully
1-12     vented or flared;
1-13                 (3)  used for lifting oil, unless sold for that
1-14     purpose; [or]
1-15                 (4)  produced in this state from a well that qualifies
1-16     under Section 202.056; or
1-17                 (5)  used on the lease for agricultural purposes or
1-18     purposes associated with agriculture, unless sold for that purpose.
1-19           SECTION 2. (a)  This Act takes effect on the first day of the
1-20     calendar month following the month it receives a vote of two-thirds
1-21     of all the members elected to each house, as provided by Section
1-22     39, Article III, Texas Constitution.  If this Act does not receive
1-23     the vote necessary for that effective date, this Act takes effect
1-24     September 1, 2001.
 2-1           (b)  The change in law made by this Act does not affect taxes
 2-2     imposed before the effective date of this Act, and the law in
 2-3     effect before the effective date of this Act is continued in effect
 2-4     for purposes of the liability for and collection of those taxes.