H.B. 2301 78(R)    BILL ANALYSIS


H.B. 2301
By: Jones, Elizabeth
Energy Resources
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

House Bill 2301 will maximize the assessment and collection of the
regulatory fee on crude petroleum and Natural Gas production that is
deposited into the Oil Field Cleanup Fund.  The fee currently is 5/8th of
1 cent on a barrel of oil and 1/15th of 1 cent for each 1000 cubic feet
(mcf) of natural gas produced.  This fee is collected in addition to
severance taxes on crude petroleum and natural gas.   

If certain types of crude oil or natural gas production are exempt from
severance taxes the regulatory fee is not collected and revenues accrued
to the Oil Field Cleanup Fund are proportionally reduced. One example is
the natural gas produced from tight formations. Such gas is exempt from a
severance tax, and since the Oil Field Cleanup Fund regulatory fees are
administered in the same tax code, this production is also exempt from the
regulatory fee.  

Amending the applicable statutes to apply the regulatory fee to all crude
petroleum and natural gas produced in Texas regardless of the imposition
of severance taxes will maximize the accrual of the regulatory fee into
the fund. 

House Bill 2301 was part of the package of recommendations from the Oil
Field Cleanup Advisory Committee in their Report to State Leadership as
part of an effort to strengthen the fund. 


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

SECTION 1.(b) Stipulates that the fee is independent of any liability for
the taxes imposed under section 81.111 of the Natural Resources Code and
Chapter 202 of the Tax Code. 

(d)The fee imposed in  section is not affected by tax exemptions and
reductions set out in  Sections 202.052, 202.054, 202.056, 202.057 and
202.059 of the Tax Code. 

SECTION 2(b) Stipulates that the fee is independent of any liability for
the taxes imposed under Section 201.052 of the Tax Code. 

(d)The fee imposed in  section is not affected by tax exemptions and
reductions set out in  Sections 201.053, 201.057 and 201.058 of the Tax
Code. 

EFFECTIVE DATE

This Act takes effect September 1, 2003.