Texas 2015 - 84th Regular

Texas House Bill HB3554 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	84R27699 CJC-F
2	2	By: Dale H.B. No. 3554
3	3	Substitute the following for H.B. No. 3554:
4	4	By: Dale C.S.H.B. No. 3554
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to an oil and gas severance tax credit for the use of
10	10	incremental production increase techniques.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subtitle I, Title 2, Tax Code, is amended by
13	13	adding Chapter 205 to read as follows:
14	14	CHAPTER 205. TAX CREDIT FOR OIL AND GAS PRODUCED USING INCREMENTAL
15	15	PRODUCTION INCREASE TECHNIQUE
16	16	Sec. 205.001. DEFINITIONS. In this chapter:
17	17	(1) "Baseline production" means:
18	18	(A) for an existing gas well, the average monthly
19	19	production from that well for the four highest months of production
20	20	during the calendar year preceding the year in which an incremental
21	21	production increase technique is implemented; and
22	22	(B) for an oil well, the average monthly
23	23	production from the lease on which that well is located for the four
24	24	highest months of production during the calendar year preceding the
25	25	year in which an incremental production increase technique is
26	26	implemented.
27	27	(2) "Commission" means the Railroad Commission of
28	28	Texas.
29	29	(3) "Enhanced incremental production increase" means
30	30	an incremental production increase from an oil or gas well or lease
31	31	that constitutes an increase in production of at least 25 percent
32	32	over baseline production from that well or lease each month for a
33	33	period of at least four months and that results from the
34	34	implementation of an incremental production increase technique.
35	35	(4) "Incremental production increase" means
36	36	production from an oil or gas well or lease in excess of baseline
37	37	production.
38	38	(5) "Incremental production increase technique" means
39	39	a chemical, mechanical, or operational addition to a fracture
40	40	stimulation, acidization, or any other recognized well completion
41	41	process that has a cost of at least $50,000, as determined by the
42	42	commission, and that results in an incremental production increase
43	43	from an oil or gas well or lease.
44	44	(6) "Operator" means the person responsible for the
45	45	actual physical operation of an oil or gas well or lease.
46	46	Sec. 205.002. CERTIFICATION OF ENHANCED INCREMENTAL
47	47	PRODUCTION INCREASE BY COMMISSION. (a) Subject to Subsection (d),
48	48	an operator may request that the commission certify:
49	49	(1) that an incremental production increase technique
50	50	implemented by the operator has resulted in an enhanced incremental
51	51	production increase from the oil or gas well or lease; and
52	52	(2) the cost to the operator to implement the
53	53	incremental production increase technique described by Subdivision
54	54	(1).
55	55	(b) The commission may require an operator seeking
56	56	certification by the commission under this section to provide to
57	57	the commission any information the commission considers necessary
58	58	to make the certification under Subsection (a).
59	59	(c) Subject to Subsection (e), the commission shall issue a
60	60	certificate to the operator of an oil or gas well or lease if the
61	61	commission determines that an incremental production increase
62	62	technique implemented by the operator has resulted in an enhanced
63	63	incremental production increase from the oil or gas well or lease.
64	64	The certificate must state the amount of the enhanced incremental
65	65	production increase attributable to the incremental production
66	66	increase technique and the cost to the operator to implement the
67	67	incremental production increase technique.
68	68	(d) An operator may not request a certificate under this
69	69	section before the first anniversary of the date on which the period
70	70	of the enhanced incremental production increase for which the
71	71	operator is seeking certification ends.
72	72	(e) The commission may not issue a certificate under this
73	73	section until 18 months have elapsed after the date on which the
74	74	period of the enhanced incremental production increase for which
75	75	the operator is seeking certification ends.
76	76	(f) A determination made by the commission under this
77	77	section is final and not appealable.
78	78	Sec. 205.003. TAX CREDIT. (a) Subject to Subsection (d),
79	79	the operator of an oil or gas well who is issued a certificate under
80	80	Section 205.002 is entitled to a credit against the tax imposed
81	81	under Chapter 201 or 202, as applicable, on oil or gas produced from
82	82	that well.
83	83	(b) Subject to Subsection (c), the total amount of the
84	84	credit to which an operator is entitled under this chapter is equal
85	85	to the lesser of:
86	86	(1) an amount equal to 50 percent of the taxes paid by
87	87	the operator on the amount of the enhanced incremental production
88	88	increase stated in the certificate issued to the operator by the
89	89	commission, at the rate provided by Section 201.052 or 202.052, as
90	90	applicable;
91	91	(2) $100,000; or
92	92	(3) the operator's total cost of implementation of an
93	93	incremental production increase technique for which the operator
94	94	has been issued a certificate under Section 205.002.
95	95	(c) An operator may not claim an amount of the credit on a
96	96	report that exceeds the amount of tax due on the report. Any unused
97	97	amount of the credit may be carried forward and claimed on
98	98	subsequent reports until the credit amount is exhausted.
99	99	(d) The total amount of tax credits that the comptroller may
100	100	award under this section in a state fiscal year is $10 million. The
101	101	comptroller by rule shall prescribe procedures by which the
102	102	comptroller may allocate credits under this chapter. The
103	103	procedures must provide that credits are allocated on a first-come,
104	104	first-served basis, based on the date of an operator's
105	105	certification under Section 205.002.
106	106	Sec. 205.004. APPLICATION. (a) To qualify for the credit
107	107	provided under this chapter, the person responsible for paying the
108	108	tax must apply to the comptroller. The application must be filed
109	109	not later than the first anniversary of the date the commission
110	110	issues a certificate to an operator under Section 205.002.
111	111	(b) The application must include a copy of the certificate
112	112	issued by the commission under Section 205.002 and any other
113	113	information required by the comptroller.
114	114	SECTION 2. The comptroller of public accounts and the
115	115	Railroad Commission of Texas shall adopt rules necessary to
116	116	administer Chapter 205, Tax Code, as added by this Act, not later
117	117	than December 31, 2015.
118	118	SECTION 3. The credit authorized by Chapter 205, Tax Code,
119	119	as added by this Act, applies only to oil or gas produced on or after
120	120	the effective date of this Act. Oil or gas produced before the
121	121	effective date of this Act is subject to the law in effect when the
122	122	oil or gas was produced, and that law is continued in effect for
123	123	that purpose.
124	124	SECTION 4. The change in law made by this Act does not
125	125	affect tax liability accruing before the effective date of this
126	126	Act. That liability continues in effect as if this Act had not been
127	127	enacted, and the former law is continued in effect for the
128	128	collection of taxes due and for civil and criminal enforcement of
129	129	the liability for those taxes.
130	130	SECTION 5. (a) Except as provided by Subsection (b) of this
131	131	section, this Act takes effect January 1, 2016.
132	132	(b) Section 2 of this Act takes effect immediately if this
133	133	Act receives a vote of two-thirds of all the members elected to each
134	134	house, as provided by Section 39, Article III, Texas Constitution.
135	135	If this Act does not receive the vote necessary for immediate
136	136	effect, Section 2 of this Act takes effect September 1, 2015.