H.B. No. 1712
AN ACT
relating to an exemption from ad valorem and sales and use taxes for
property used in connection with an offshore spill response
containment system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.271, Tax Code, is amended to read as
follows:
Sec. 11.271. OFFSHORE DRILLING EQUIPMENT NOT IN USE. (a)
In this section:
(1) "Environmental protection agency of the United
States" includes:
(A) the United States Department of the Interior
and any agency, bureau, or other entity established in that
department, including the Bureau of Safety and Environmental
Enforcement and the Bureau of Ocean Energy Management, Regulation
and Enforcement; and
(B) any other department, agency, bureau, or
entity of the United States that prescribes rules or regulations
described by Subdivision (2)(A).
(2) "Offshore spill response containment system"
means a marine or mobile containment system that:
(A) is designed and used or intended to be used
solely to implement a response plan that meets or exceeds rules or
regulations adopted by any environmental protection agency of the
United States, this state, or a political subdivision of this state
for the control, reduction, or monitoring of air, water, or land
pollution in the event of a blowout or loss of control of an
offshore well drilled or used for the exploration for or production
of oil or gas;
(B) has a design capability to respond to a
blowout or loss of control of an offshore well drilled or used for
the exploration for or production of oil or gas that is drilled in
more than 5,000 feet of water;
(C) is used or intended to be used solely to
respond to a blowout or loss of control of an offshore well drilled
or used for the exploration for or production of oil or gas without
regard to the depth of the water in which the well is drilled; and
(D) except for any monitoring function for which
the system may be used, is used or intended to be used as a temporary
measure to address fugitive oil, gas, sulfur, or other minerals
after a leak has occurred and is not used or intended to be used
after the leak has been contained as a continuing means of producing
oil, gas, sulfur, or other minerals.
(3) "Rules or regulations adopted by any environmental
protection agency of the United States" includes 30 C.F.R. Part 254
and any corresponding provision or provisions of succeeding,
similar, substitute, proposed, or final federal regulations.
(b) An owner or lessee of a marine or mobile drilling unit
designed for offshore drilling of oil or gas wells is entitled to an
exemption from taxation of the drilling unit if the drilling unit:
(1) is being stored in a county bordering on the Gulf
of Mexico or on a bay or other body of water immediately adjacent to
the Gulf of Mexico;
(2) is not being stored for the sole purpose of repair
or maintenance; and
(3) is not being used to drill a well at the location
at which it is being stored.
(c) A person is entitled to an exemption from taxation of
the personal property the person owns or leases that is used,
constructed, acquired, stored, or installed solely as part of an
offshore spill response containment system, or that is used solely
for the development, improvement, storage, deployment, repair,
maintenance, or testing of such a system, if the system is being
stored while not in use in a county bordering on the Gulf of Mexico
or on a bay or other body of water immediately adjacent to the Gulf
of Mexico. Property described by this subsection and not used for
any other purpose is considered to be property used wholly as an
integral part of mobile or marine drilling equipment designed for
offshore drilling of oil or gas wells.
(d) Subsection (c) does not apply to personal property used,
wholly or partly, for the exploration for or production of oil, gas,
sulfur, or other minerals, including the equipment, piping, casing,
and other components of an oil or gas well. For purposes of this
subsection, the offshore capture of fugitive oil, gas, sulfur, or
other minerals that is entirely incidental to the property's
temporary use as an offshore spill response containment system is
not considered to be production of those substances.
(e) Subsection (c) does not apply to personal property that
was used, constructed, acquired, stored, or installed in this state
on or before January 1, 2013.
(f) To qualify for an exemption under Subsection (c), the
person owning or leasing the property must be an entity formed
primarily for the purpose of designing, developing, modifying,
enhancing, assembling, operating, deploying, and maintaining an
offshore spill response containment system. A person may not
qualify for the exemption by providing services to or for an
offshore spill response containment system that the person does not
own or lease.
SECTION 2. Section 11.43(c), Tax Code, is amended to read as
follows:
(c) An exemption provided by Section 11.13, 11.131, 11.17,
11.18, 11.182, 11.1827, 11.183, 11.19, 11.20, 11.21, 11.22,
11.23(h), (j), or (j-1), 11.231, 11.254, 11.271, 11.29, 11.30, or
11.31, once allowed, need not be claimed in subsequent years, and
except as otherwise provided by Subsection (e), the exemption
applies to the property until it changes ownership or the person's
qualification for the exemption changes. However, the chief
appraiser may require a person allowed one of the exemptions in a
prior year to file a new application to confirm the person's current
qualification for the exemption by delivering a written notice that
a new application is required, accompanied by an appropriate
application form, to the person previously allowed the exemption.
SECTION 3. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.356 to read as follows:
Sec. 151.356. OFFSHORE SPILL RESPONSE CONTAINMENT
PROPERTY. (a) In this section, "offshore spill response
containment property" means tangible personal property:
(1) described by Section 11.271(c);
(2) owned or leased by an entity described by Section
11.271(f); and
(3) used or intended to be used solely in an offshore
spill response containment system as defined by Section 11.271(a).
(b) This section does not apply to an item used, wholly or
partly, for the exploration for or production of oil, gas, sulfur,
or other minerals, including the equipment, piping, casing, and
other components of an oil or gas well. For purposes of this
subsection, the offshore capture of fugitive oil, gas, sulfur, or
other minerals that is entirely incidental to the item's temporary
use as an offshore spill response containment system is not
considered to be production of those substances.
(c) The sale, lease, rental, storage, use, or other
consumption by an entity described by Section 11.271(f) of offshore
spill response containment property used solely for the purposes
described by Section 11.271(c) and this section is exempted from
the taxes imposed by this chapter.
(d) A service performed exclusively on offshore spill
response containment property is exempted from the taxes imposed by
this chapter.
SECTION 4. Section 11.271, Tax Code, as amended by this Act,
applies only to an ad valorem tax year that begins on or after the
effective date of this Act.
SECTION 5. Section 151.356, Tax Code, as added by this Act,
does not affect tax liability accruing before the effective date of
this Act. That liability continues in effect as if this Act had not
been enacted, and the former law is continued in effect for the
collection of taxes due and for civil and criminal enforcement of
the liability for those taxes.
SECTION 6. 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, 2013.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1712 was passed by the House on May
10, 2013, by the following vote: Yeas 140, Nays 1, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1712 was passed by the Senate on May
21, 2013, by the following vote: Yeas 29, Nays 1.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor