|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the use of anthropogenic carbon dioxide in the recovery |
|
of oil. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 11.31(b), Tax Code, is amended to read as |
|
follows: |
|
(b) In this section, "facility, device, or method for the |
|
control of air, water, or land pollution" means land that is |
|
acquired after January 1, 1994, or any structure, building, |
|
installation, excavation, machinery, equipment, or device, and any |
|
attachment or addition to or reconstruction, replacement, or |
|
improvement of that property, that is used, constructed, acquired, |
|
or installed wholly or partly to meet or exceed rules or regulations |
|
adopted by any environmental protection agency of the United |
|
States, this state, or a political subdivision of this state for the |
|
prevention, monitoring, control, or reduction of air, water, or |
|
land pollution. Without regard to whether carbon dioxide is |
|
considered a pollutant, the term includes property that is used, |
|
constructed, acquired, or installed wholly or partly to capture |
|
carbon dioxide from an anthropogenic source that is used in an |
|
enhanced recovery project for which a producer of oil receives a |
|
severance tax exemption under Section 202.0545, or that is |
|
geologically sequestered. This section does not apply to a motor |
|
vehicle. |
|
SECTION 2. Subchapter B, Chapter 202, Tax Code, is amended |
|
by adding Section 202.0545 to read as follows: |
|
Sec. 202.0545. TAX EXEMPTION FOR ENHANCED RECOVERY PROJECTS |
|
USING ANTHROPOGENIC CARBON DIOXIDE. (a) Subject to the |
|
limitations provided by this section, the producer of oil recovered |
|
through an enhanced oil recovery project that qualifies under |
|
Section 202.054 for the recovered oil tax rate provided by Section |
|
202.052(b) is entitled to an additional 50 percent reduction in |
|
that tax rate if in the recovery of the oil the enhanced oil |
|
recovery project uses carbon dioxide that: |
|
(1) is captured from an anthropogenic source; |
|
(2) would otherwise be released into the atmosphere as |
|
industrial emission; |
|
(3) is measurable at the source of capture; and |
|
(4) is sequestered in one or more geological |
|
formations following the enhanced oil recovery process. |
|
(b) If a portion of the carbon dioxide used in the project |
|
does not satisfy the criteria of Subsection (a) because it is not |
|
anthropogenic, the tax reduction provided by Subsection (a) is |
|
reduced to reflect the proportion of the carbon dioxide used in the |
|
project that satisfies the criteria of Subsection (a). |
|
(c) To qualify for the tax rate reduction under this |
|
section, the operator must apply to the comptroller for the |
|
reduction and include with the application any information and |
|
documentation that the comptroller may require. |
|
(d) To qualify for the tax rate reduction under this |
|
section, the operator must apply for a certification from: |
|
(1) the Railroad Commission of Texas, if carbon |
|
dioxide used in the project is to be sequestered in a reservoir |
|
productive of oil or natural gas; |
|
(2) the Texas Commission on Environmental Quality, if |
|
carbon dioxide used in the project is to be sequestered in a |
|
geological formation other than a reservoir productive of oil or |
|
natural gas; or |
|
(3) both the Railroad Commission of Texas and the |
|
Texas Commission on Environmental Quality if both Subdivisions (1) |
|
and (2) apply. |
|
(e) An agency to which an operator applies for a |
|
certification under Subsection (d) may issue the certification only |
|
if the agency finds that, based on substantial evidence, there is a |
|
reasonable expectation that: |
|
(1) the operator's planned sequestration program will |
|
ensure that at least 99 percent of the carbon dioxide sequestered as |
|
required by Subsection (a)(4) will remain sequestered for at least |
|
1,000 years; and |
|
(2) the operator's planned sequestration program will |
|
include appropriately designed monitoring and verification |
|
measures that will be employed for a period sufficient to |
|
demonstrate whether the sequestration program is performing as |
|
expected. |
|
(f) The tax rate reduction does not apply if the operator's |
|
sequestration program or the operator's monitoring and |
|
verification measures differ substantially from the planned |
|
program described by Subsection (e), and the operator shall refund |
|
the difference between the amount of the tax paid under this section |
|
and the amount that would have been imposed in the absence of this |
|
section. |
|
(g) The comptroller shall approve the application if the |
|
operator submits each certification required by Subsection (d) and |
|
if the comptroller determines that the oil is otherwise eligible |
|
under this section. |
|
(h) If, before the comptroller approves an application for |
|
the tax rate reduction under this section, the tax imposed by this |
|
chapter is paid at the rate provided by Section 202.052(a) or (b) on |
|
oil that qualifies under this section, the producer or producers of |
|
the oil are entitled to a credit against taxes imposed by this |
|
chapter in an amount equal to the difference between the tax paid on |
|
the oil and the tax due on the oil after the rate reduction under |
|
this section is applied. The credit is allowed to each producer |
|
according to the producer's proportionate share in the oil. To |
|
receive a credit, one or more of the producers of the oil must apply |
|
to the comptroller for the credit not later than the first |
|
anniversary of the date the oil is produced. |
|
(i) The comptroller may enact rules and establish |
|
procedures to implement and administer this section. |
|
(j) The Railroad Commission of Texas may enact rules and |
|
establish procedures to implement and administer this section. |
|
(k) The Texas Commission on Environmental Quality may enact |
|
rules and establish procedures to implement and administer this |
|
section. |
|
SECTION 3. (a) Except as provided by Subsection (b) of this |
|
section, this Act takes effect September 1, 2007. |
|
(b) Section 1 of this Act takes effect January 1, 2008. |