79R14465 CBH-F
By: West H.B. No. 2983
Substitute the following for H.B. No. 2983:
By: Farabee C.S.H.B. No. 2983
A BILL TO BE ENTITLED
AN ACT
relating to encouraging production from oil wells.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 202, Tax Code, is amended
by adding Section 202.060 to read as follows:
Sec. 202.060. TAX CREDIT FOR ENHANCED EFFICIENCY EQUIPMENT.
(a) In this section, "enhanced efficiency equipment" means
equipment used in the production of oil that reduces the energy used
to produce a barrel of fluid by 10 percent or more when compared to
commonly available alternative equipment. The term does not
include a motor or downhole pump. Equipment does not qualify as
enhanced efficiency equipment unless an institution of higher
education approved by the comptroller that is located in this state
and that has an accredited petroleum engineering program evaluated
the equipment and determined that the equipment does produce the
required energy reduction.
(b) The taxpayer responsible for the payment of severance
taxes on the production from a well in this state on which enhanced
efficiency equipment is installed and used is entitled to a credit
in an amount equal to 20 percent of the cost of the equipment,
provided that:
(1) the cumulative total of all severance tax credits
authorized by this section may not exceed $2,000 for any well;
(2) the enhanced efficiency equipment installed in a
qualifying well must have been purchased and installed not earlier
than September 1, 2005, or later than September 1, 2009;
(3) the taxpayer must file an application with the
comptroller for the credit and must demonstrate to the comptroller
that the enhanced efficiency equipment has been purchased and
installed in the well within the period prescribed by Subdivision
(2);
(4) the number of applications the comptroller may
approve each state fiscal year may not exceed a number equal to two
percent of the producing wells in this state on September 1 of that
state fiscal year, as determined by the comptroller; and
(5) the manufacturer of the enhanced efficiency
equipment must obtain an evaluation of the product under Subsection
(a).
(c) The taxpayer may carry any unused credit forward until
the credit is used.
SECTION 2. This Act takes effect September 1, 2005.