Texas House Bill HB878

Texas 2021 - 87th Regular

Caption

Relating to phasing out the tax reduction for certain high-cost gas.

Impact

If enacted, HB 878 would have a significant impact on the fiscal landscape governing the energy sector in Texas. By phasing out the tax reduction, the bill could lead to increased tax liabilities for producers of high-cost gas, potentially affecting their operational financial strategies. Furthermore, the provisions regarding the application process and certification could introduce more stringent compliance requirements, which would likely lead to higher administrative overhead for both regulators and gas producers.

Summary

House Bill 878 proposes to phase out the tax reduction specifically allocated for certain high-cost gas in Texas. The bill modifies Section 201.057(f) of the Tax Code, setting specific requirements for the application process for taxpayers seeking this reduction, including the need for certification that the well in question produces high-cost gas. It stipulates deadlines by which applications must be submitted to qualify for the maximum tax reduction, as well as addressing compliance responsibilities for the comptroller to monitor applications effectively.

Contention

Notably, the discussions surrounding HB 878 may evoke contention among both legislative members and industry stakeholders. Proponents of the bill argue that revoking the tax reduction aligns with broader market principles, ensuring that the state capitalizes fully on its energy resources. However, opponents may express concerns about the potential economic impact on companies that rely on such tax reductions to offset the costs associated with extraction and production. The debate may also encompass views on state fiscal responsibility and the role of the government in regulating the energy industry.