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By: Gallego H.B. No. 3269
A BILL TO BE ENTITLED
AN ACT
relating to taxes administered by the comptroller of public
accounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 151.011(a), Tax Code, is amended to read
as follows:
(a) Except as provided by Subsection (c) of this section,
"use" means the exercise of a right or power incidental to the
ownership of tangible personal property over tangible personal
property including tangible personal property that has been
processed, fabricated, or manufactured into other property or
attached to or incorporated into other property transported into
this state and, except as provided by Section 151.056(b) of this
code, includes the incorporation of tangible personal property into
real estate or into improvements of real estate whether or not the
real estate is subsequently sold.
SECTION 2. Section 151.302, Tax Code, is amended by adding
subsections (e) and (f) to read as follows:
(e) Except as provided by Section 151.056(b), a sale for
resale does not include a sale of tangible personal property to a
purchaser who uses or consumes the property while performing a
contract, regardless of whether title transfers to the purchaser's
customer under a contract, regulation, or other law.
(f) A sale for resale does not include a sale of a taxable
service to a purchaser who uses or consumes the service while
performing a contract unless the service is:
(i) integral to performing another taxable service; or
(ii) performed on tangible personal property or real
property owned or leased by the purchaser's customer.
SECTION 3. Section 153.119(d), Tax Code, is amended to read
as follows:
(d) If the quantity of gasoline used in Texas by auxiliary
power units or power take-off equipment on any motor vehicle can be
accurately measured while the motor vehicle is stationary by any
metering or other measuring device or method designed to measure
the fuel separately from fuel used to propel the motor vehicle, the
comptroller may approve and adopt the use of any device as a basis
for determining the quantity of gasoline consumed in those
operations for tax credit or tax refund. The climate-control air
conditioning or heating system of a motor vehicle with a primary
purpose of providing for the convenience or comfort of the operator
or passengers is not a power take-off system and no refund will be
allowed for the gasoline tax paid on any portion of the gasoline
that is used for this purpose.
SECTION 4. Section 153.222(d), Tax Code, is amended to read
as follows:
(d) If the quantity of diesel fuel used in Texas by
auxiliary power units or power take-off equipment on any motor
vehicle can be accurately measured while the motor vehicle is
stationary by any metering or other measuring device or method
designed to measure the fuel separately from fuel used to propel the
motor vehicle, the comptroller may approve and adopt the use of any
device as a basis for determining the quantity of diesel fuel
consumed in those operations for tax credit or tax refund. If no
separate metering device or other approved measuring method is
provided, the following credit or refund procedures are authorized.
A permitted supplier, a dyed diesel fuel bonded user, or an
agricultural bonded user who operates diesel-powered motor
vehicles equipped with a power take-off or a diesel-powered
auxiliary power unit mounted on the motor vehicle and using the fuel
supply tank of the motor vehicle may be allowed a deduction from the
taxable gallons used in this state in each motor vehicle so
equipped. The comptroller shall determine the percentage of the
deduction. A user who is required to pay the tax on diesel fuel used
in motor vehicles so equipped may file a claim for a refund not to
exceed the percentage allowed by the comptroller of the total
taxable fuel used in this state in each motor vehicle so equipped.
The climate-control air conditioning or heating system of a motor
vehicle with a primary purpose of providing for the convenience or
comfort of the operator or passengers is not a power take-off system
and no refund will be allowed for the diesel fuel tax paid on any
portion of the diesel fuel that is used for this purpose.
SECTION 5. Section 201.057, Tax Code, is amended by
amending subsection (e) and adding subsection (k), to read as
follows:
(e) The operator of a proposed or existing gas well,
including a gas well that has not been completed, or the operator of
any proposed or existing oil or gas well within a commission
approved co-production project, may apply to the commission for
certification that the well produces or will produce high-cost gas.
Such application, if seeking certification as high-cost gas
according to Subsection (a)(2)(A), [may be made at any time] must be
made in writing no later than the first anniversary after the first
day of production. The application may be made but is not required
to be made concurrently with a request for a determination that gas
produced from the well is high-cost natural gas for purposes of the
Natural Gas Policy Act of 1978 (15 U.S.C. Section 3301 et seq.) or
with a request for commission approval of a co-production project.
The commission may require an applicant to provide the commission
with any relevant information required to administer this section.
The commission must act on the application within one year of the
date it was filed. The commission may by order extend the due date
for its issuance of a determination for a period not longer than 180
days. For purposes of this section, a determination that gas is
high-cost natural gas according to Subsection (a)(2)(A) or a
determination that gas is produced from within a commission
approved co-production project is a certification that the gas is
high-cost gas for purposes of this section, and in that event
additional certification is not required to qualify for the
exemption or tax reduction provided by this section.
(f) To qualify for the exemption or tax reduction provided
by this section, the person responsible for paying the tax must
apply to the comptroller. The application must contain the
certification of the commission that the well produces high-cost
gas and, if the application is for a well spudded or completed after
September 1, 1995, must contain a report of drilling and completion
costs incurred for each well on a form and in the detail as
determined by the comptroller. Drilling and completion costs for a
recompletion shall only include current and contemporaneous costs
associated with the recompletion. Notwithstanding any other
provision of this section, to obtain the maximum tax exemption or
tax deduction, an application to the comptroller for certification
according to Subsection (a)(2)(A) must be filed with the
comptroller not later than one year after the date of first
production [at the later of the 180th day after the date of first
production or the 45th day after the date of approval by the
commission. If the application is not filed by the applicable
deadline, the tax exemption or tax deduction is reduced by 10
percent for the period beginning on the 180th day after the first
day of production and ending on the date on which the application is
filed with the comptroller. An application to the comptroller for
certification according to Subsection (a)(2)(B) may not be filed
before January 1, 1990, or after December 31, 1998]. The
comptroller shall approve the application of a person who
demonstrates that the gas is eligible for the exemption or tax
reduction. The comptroller may require a person applying for the
exemption or tax reduction to provide any relevant information in
the person's monthly report that the comptroller considers
necessary to administer this section. The commission shall notify
the comptroller in writing immediately if it determines that an oil
or gas well previously certified as producing high-cost gas does
not produce high-cost gas or if it takes any action or discovers any
information that affects the eligibility of gas for an exemption or
tax reduction under this section.
(k) A person who, on September 1, 2003, otherwise meets the
requirements necessary to file an application with the commission
and the comptroller for certification, except for the requirement
that it be made no later than the first anniversary after the first
day of production, must submit the application for certification
before March 1, 2004 to be eligible for the tax exemption or tax
deduction provided by this section. This subsection expires March
1, 2004.
SECTION 6. Section 201.101, Tax Code, is amended to read as
follows:
Sec. 201.101. MARKET VALUE. (a) The market value of gas is
its value at the mouth of the well from which it is produced. It is
computed by taking the producer's gross receipts for the gas and
deducting allowable marketing costs enumerated in subsection (b)
incurred by the producer to transport the gas from the outlet of a
lease separator to the market.
(b) "Allowable marketing costs" means:
(1) direct costs for compressing the gas sold;
(2) direct costs for dehydrating the gas sold;
(3) direct costs for sweetening the gas sold; and
(4) direct cost for delivering the gas to the
purchaser.
SECTION 7. Section 201.102, Tax Code, is amended to read as
follows:
Sec. 201.102. CASH SALES. If gas is sold for cash only, the
tax shall be computed on the producer's gross cash receipts.
Payments from a purchaser of gas to a producer for the purpose of
reimbursing the producer for taxes due under this chapter or for the
purpose of reimbursing the producer for costs incurred are [not]
part of the gross cash receipts unless the reimbursement amount for
taxes due under this chapter is separately stated in a contract.
SECTION 8. Effective dates. (a) SECTIONS 1 and 2 of this
Act take effect October 1, 2003.
(b) SECTIONS 3 and 4 of this Act take effect September 1,
2003, and apply to all fuel used on or after that date for climate
control air conditioning or heating in a motor vehicle.
(c) Sections 5, 6, and 7 of this Act take effect September 1,
2003.