81R15430 T
By: Callegari H.B. No. 4166
A BILL TO BE ENTITLED
AN ACT
relating to the provision of severance tax credits and exemptions
and other incentives and procedures for producing oil from certain
wells.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sec. 202.062. TAX CREDIT FOR PROCESSING
CONTAMINATED PRODUCED WATERS USED IN THE PRODUCTION OF OIL.
(a) In this section:
(1) "Hydraulic fracturing" means a method used to
create fractures that extend from a borehole into rock formations,
informally called fracing or hydrofracing. The technique is used to
increase or restore the rate at which fluids, such as oil, can be
produced from the formation. By creating or restoring fractures,
the reservoir surface area exposed to the borehole is increased and
the fracture provides a conductive path connecting this reservoir
surface area to the well, which effectively increases the rate that
fluids can be produced from the reservoir formations.
(2) "Process contaminated produced waters" means a
patented thermal evaporation technology used to desalinate and
purify water contaminated by its use in hydraulic fracturing.
(b) The taxpayer responsible for the payment of severance
taxes on the production from an oil well in this state on which
hydraulic fracturing is performed and who pays a fee to another
person or entity to process contaminated produced waters resulting
from hydraulic fracturing operations so that waters can then be
reused is entitled to a credit in an amount equal to fifty cents per
barrel of reclaimed water paid to said person or entity, provided
that:
(1) the taxpayer must file an application with the
comptroller for the credit and must demonstrate to the comptroller
that it is obligated to pay a fee to another person or entity to
process contaminated produced waters resulting from hydraulic
fracturing operations.
(2) The taxpayer may carry any unused credit forward
until the credit is used.
(3) Any costs associated with this water reclamation
program must be paid from stimulus monies first if such monies are
available.
(4) The Texas Commission on Environmental Quality
(TCEQ) shall adopt rules to provide regulatory oversight and
approval of any water reclamation program which results in
severance tax credits.
SECTION 2. EFFECTIVE DATE. This Act takes effect
immediately if it receives a vote of two-thirds of all the members
elected to each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2009. This Act
will expire at the end of two years after the date this Act takes
effect.