Texas 2015 - 84th Regular

Texas House Bill HB2691 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		84R6819 CBH-F
2		-	By: King of Uvalde, et al. H.B. No. 2691
	2	+	By: King of Uvalde, Darby, et al. H.B. No. 2691
3	3
4	4
5	5		A BILL TO BE ENTITLED
6	6		AN ACT
7	7		relating to a sales and use tax exemption and an oil and gas
8	8		severance tax credit for the use of alternative base fluids in
9	9		energized fracturing operations; imposing a civil penalty.
10	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11		SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
12	12		by adding Section 151.3555 to read as follows:
13	13		Sec. 151.3555. ALTERNATIVE BASE FLUIDS AND RELATED TANGIBLE
14	14		PERSONAL PROPERTY. (a) In this section, "alternative base fluids"
15	15		has the meaning assigned by Section 205.001.
16	16		(b) The following are exempted from the taxes imposed by
17	17		this chapter:
18	18		(1) the sale, use, or other consumption of alternative
19	19		base fluids used in connection with an energized fracturing
20	20		operation in an oil or gas well; and
21	21		(2) tangible personal property specifically used to
22	22		process, reuse, or recycle alternative base fluids that will be
23	23		used in energized fracturing work performed at an oil or gas well.
24	24		SECTION 2. Subtitle I, Title 2, Tax Code, is amended by
25	25		adding Chapter 205 to read as follows:
26	26		CHAPTER 205. TAX CREDIT FOR OIL AND GAS PRODUCED USING ALTERNATIVE
27	27		BASE FLUIDS
28	28		Sec. 205.001. DEFINITIONS. In this chapter:
29	29		(1) "Alternative base fluids" means a continuous phase
30	30		fluid that is used in energized fracturing operations to produce
31	31		oil and gas. The term includes nitrogen, carbon dioxide, and fluids
32	32		other than water.
33	33		(2) "Operator" means the person responsible for the
34	34		actual physical operation of an oil or gas well.
35	35		Sec. 205.002. CREDIT FOR USE OF ALTERNATIVE BASE
36	36		FLUIDS. (a) The operator of an oil or gas well is entitled to a
37	37		credit as provided by this chapter if the volume of alternative base
38	38		fluids the operator uses as a substitution for water to produce the
39	39		oil or gas in an energized fracturing operation is equal to at least
40	40		20 percent of the total volume of fluid used in the fracturing
41	41		operation.
42	42		(b) The amount of credit to which an operator is entitled
43	43		under this chapter is an amount equal to a percentage of the taxes
44	44		imposed by Chapter 201 or 202 in the absence of the credit, but
45	45		after any other applicable tax credits or exemptions. The
46	46		percentage is equal to the lesser of:
47	47		(1) the percentage of the total volume of the base
48	48		fluids used in the fracturing operation that is alternative base
49	49		fluids; or
50	50		(2) 50 percent.
51	51		(c) The credit is allocated to each person who bears the tax
52	52		under Section 201.205 or 202.156, as applicable, according to the
53	53		person's proportionate share in the oil or gas produced.
54	54		Sec. 205.003. APPLICATION. (a) To qualify for the credit
55	55		provided under this chapter, the person responsible for paying the
56	56		tax must apply to the comptroller.
57	57		(b) The application must include any information required
58	58		by the comptroller and the FracFocus.org Hydraulic Fracturing Fluid
59	59		Product Component Information Disclosure report documenting the
60	60		Maximum Ingredient Concentration in HF Fluid (% by Mass) converted
61	61		to volume of the alternative base fluids for energized fracturing
62	62		operations for oil and gas production. The volume of alternative
63	63		base fluids is calculated according to the normal volume that the
64	64		base fluids would occupy as measured at the temperature and
65	65		pressure conditions at the ground surface before injection into the
66	66		well bore.
67	67		Sec. 205.004. PENALTIES. (a) A person is liable to this
68	68		state for a civil penalty if the person makes or subscribes an
69	69		application, report, or other document that forms the basis for an
70	70		application under Section 205.003 and submits it to the comptroller
71	71		knowing that it contains a false or untrue material fact. The amount
72	72		of the penalty may not exceed the sum of:
73	73		(1) $10,000; and
74	74		(2) the amount of the credit claimed.
75	75		(b) The attorney general may recover a penalty under
76	76		Subsection (a) in a suit brought on behalf of the state. Venue for
77	77		the suit is in Travis County.
78	78		SECTION 3. The comptroller shall adopt rules necessary to
79	79		administer Chapter 205, Tax Code, as added by this Act, not later
80	80		than December 31, 2015.
81	81		SECTION 4. Chapter 205, Tax Code, as added by this Act
82	82		applies only to oil or gas produced on or after the effective date
83	83		of this Act. Oil or gas produced before the effective date of this
84	84		Act is subject to the law in effect when the oil or gas was produced,
85	85		and that law is continued in effect for that purpose.
86	86		SECTION 5. The change in law made by this Act does not
87	87		affect tax liability accruing before the effective date of this
88	88		Act. That liability continues in effect as if this Act had not been
89	89		enacted, and the former law is continued in effect for the
90	90		collection of taxes due and for civil and criminal enforcement of
91	91		the liability for those taxes.
92	92		SECTION 6. (a) Except as provided by Subsection (b) of this
93	93		section, this Act takes effect January 1, 2016.
94	94		(b) Section 3 of this Act takes effect immediately if this
95	95		Act receives a vote of two-thirds of all the members elected to each
96	96		house, as provided by Section 39, Article III, Texas Constitution.
97	97		If this Act does not receive the vote necessary for immediate
98	98		effect, Section 3 of this Act takes effect September 1, 2015.