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A BILL TO BE ENTITLED
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AN ACT
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relating to an exemption from the oil severance tax for oil produced |
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from certain low-producing wells. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 202, Tax Code, is amended |
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by adding Section 202.0585 to read as follows: |
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Sec. 202.0585. EXEMPTION FOR OIL FROM LOW-PRODUCING WELL. |
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(a) In this section: |
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(1) "Commission" means the Railroad Commission of |
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Texas. |
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(2) "Low-producing well" means a well classified as an |
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oil well whose production during a calendar year is less than 15 |
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barrels of oil per day of production. |
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(b) Oil produced from a low-producing well is exempted from |
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the tax imposed by this chapter as provided by this section. |
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(c) An operator of a well may submit an application to the |
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commission for certification of a well as a low-producing well. The |
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commission may require the applicant to provide the commission with |
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any relevant information required to certify the well. The |
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commission shall issue a certificate to each operator of the well. |
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The certificate must: |
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(1) identify the well; and |
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(2) state the date the tax exemption takes effect, |
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subject to the comptroller's approval of the exemption under |
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Subsection (g). |
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(d) The commission shall provide to the comptroller a copy |
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of a certificate of exemption for each well qualifying under this |
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section. |
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(e) The commission may revoke a certificate relating to a |
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well if the commission receives information indicating that the |
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well was not eligible for certification at the time the commission |
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issued the certificate or if the well no longer qualifies as a |
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low-producing well. The commission shall notify the operator and |
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the comptroller that a certificate has been revoked. A tax |
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exemption granted under this section is automatically revoked on |
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the date the certificate is revoked, and oil produced from the well |
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after the date of revocation is not eligible for the tax exemption. |
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(f) The commission may adopt and enforce any rules or orders |
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that the commission finds necessary to administer this section. |
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(g) To qualify for the tax exemption, the person responsible |
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for paying the tax must apply to the comptroller for the exemption |
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and include with the application the certificate issued by the |
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commission under Subsection (c). The comptroller shall approve the |
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application if the person submits the certificate and the |
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comptroller determines that the oil produced from the well is |
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otherwise eligible for the exemption. The comptroller may require |
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a person applying for the tax exemption to provide any relevant |
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information necessary to administer this section. The comptroller |
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may establish procedures to comply with this subsection and |
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Subsection (h). |
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(h) If the tax is paid at the full rate provided by this |
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chapter on oil produced on or after the date the commission |
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certifies the well for a tax exemption but before the date the |
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comptroller approves the application for the tax exemption, the |
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operator is entitled to a credit on taxes due under this chapter in |
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the amount equal to the tax paid during that period. To receive a |
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credit, the operator must apply to the comptroller for the credit |
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not later than the first anniversary of the date the commission |
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certifies the well for a tax exemption. |
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(i) A person is subject to the penalties that may be imposed |
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under Chapters 85 and 91, Natural Resources Code, if the person |
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makes and submits to the commission or comptroller an application, |
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report, or other document used or intended to be used for a |
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certificate, tax exemption, or tax credit under this section and |
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the person knows that the application, report, or other document |
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contains a false or untrue material fact. |
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(j) A person is liable to this state for a civil penalty if |
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the person, after receiving notice from the commission that the |
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person's tax exemption certificate for a well has been revoked, |
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applies or attempts to receive the tax exemption for oil produced |
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from the well under the revoked certificate. The amount of the |
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penalty may not exceed the sum of: |
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(1) $10,000; and |
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(2) the difference between the amount of taxes paid or |
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attempted to be paid and the amount of taxes due. |
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(k) The attorney general may recover a penalty under |
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Subsection (j) in a suit brought on behalf of this state. Venue for |
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the suit is in Travis County. |
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SECTION 2. The change in law made by this Act does not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 3. This Act takes effect January 1, 2010. |