Texas 2015 - 84th Regular

Texas House Bill HB4021 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	By: Herrero H.B. No. 4021
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	Relating to creating a tax severance credit for oil and gas
7	7	operators for use of alternative fluids in place of fresh water
8	8	solely in the process of hydraulic fracturing (fracking).
9	9	BE IT ENACTED BY THE STATE OF TEXAS:
10	10	Section 1. Subchapter B, Chapter 201 Tax Code, is amended by
11	11	adding Section 201.061 to read as follows:
12	12	Sec. 201.061 TAX REFUND OR CREDIT FOR USE OF ALTERNATIVE
13	13	FLUIDS IN HYDRAULIC FRACTURING.
14	14	(a) In this section:
15	15	(1) "Fresh water" means any surface or fresh
16	16	groundwater with less than 3,000 milligrams per liter total
17	17	dissolved solids.
18	18	(2) "Brackish Groundwater" means any groundwater
19	19	3,000 milligrams per liter or more total dissolved solids (TDS), as
20	20	defined by the Railroad Commission of Texas as base of
21	21	usable-quality groundwater.
22	22	(3) "Hydraulic fracturing fluid" means the fluid used
23	23	to hydraulically fracture a well at the time of its initial
24	24	completion.
25	25	(4) "Alternative fluid" includes brackish
26	26	groundwater, desalinated, recycled, municipal treated water or any
27	27	other technologies that may be developed as alternative to fresh
28	28	water.
29	29	(5) "Comptroller" means the Texas Comptroller of
30	30	Public Accounts.
31	31	(6) "RRC" means the Railroad Commission of Texas.
32	32	(b) The operator of an oil or natural gas well may apply for
33	33	a $50,000 per well tax credit from the taxes imposed under Title 2,
34	34	Chapter 201 and 202, providing the hydraulic fracturing fluid
35	35	consists entirely of fluids other than fresh water.
36	36	(c) The RRC will collect and maintain the requisite data to
37	37	monitor qualification for the tax credit. Specifically, the RRC
38	38	will append to its existing reporting requirement for newly drilled
39	39	wells for this optional tax credit:
40	40	(1) the volume of fluids used in hydraulic fracturing;
41	41	(2) location of source of alternative fluid, if not
42	42	groundwater;
43	43	(3) for groundwater, respondents must provide quality
44	44	of the groundwater expressed in TDS (parts per million of total
45	45	dissolved solids); and
46	46	(4) for groundwater, the GPS location of the source
47	47	well.
48	48	(d) Each quarter, the RRC will provide to the Comptroller a
49	49	list of new wells qualifying for the tax credit and identify the
50	50	operator. To receive the tax credit, the operator of the well must
51	51	apply to the Comptroller for the tax credit.
52	52	(e) The RRC by rule shall create or use a form or forum for
53	53	producers to certify the qualification for the credit.
54	54	(f) The RRC may conduct random inspections to enforce this
55	55	section as the RRC deems appropriate.
56	56	(g) Penalty for claiming a tax credit based on false
57	57	information supplied to the RRC which would otherwise disqualify
58	58	the claim will result in a penalty as deemed appropriate by RRC.
59	59	(h) The RRC may recognize oil and gas operators who made
60	60	significant progress in the use of alternative fluids.
61	61	(i) The tax credit will begin January 1, 2016 and by
62	62	December 31, 2019, the RRC will report the status of the program's
63	63	progress to further discuss extension of the incentive program.
64	64	Section 2. Subchapter B, Chapter 202 Tax Code, is amended by
65	65	adding Section 202.064 to read as follows:
66	66	Sec. 202.064 TAX REFUND OR CREDIT FOR USE OF ALTERNATIVE
67	67	FLUIDS IN HYDRAULIC FRACTURING.
68	68	(a) In this section:
69	69	(1) "Fresh water" means any surface or fresh
70	70	groundwater with less than 3,000 milligrams per liter total
71	71	dissolved solids.
72	72	(2) "Brackish Groundwater" means any groundwater
73	73	3,000 milligrams per liter or more total dissolved solids (TDS), as
74	74	defined by the Railroad Commission of Texas as base of
75	75	usable-quality groundwater.
76	76	(3) "Hydraulic fracturing fluid" means the fluid used
77	77	to hydraulically fracture a well at the time of its initial
78	78	completion.
79	79	(4) "Alternative fluid" includes brackish
80	80	groundwater, desalinated, recycled, municipal treated water or any
81	81	other technologies that may be developed as alternative to fresh
82	82	water.
83	83	(5) "Comptroller" means the Texas Comptroller of
84	84	Public Accounts.
85	85	(6) "RRC" means the Railroad Commission of Texas.
86	86	(b) The operator of an oil or natural gas well may apply for
87	87	a $50,000 per well tax credit from the taxes imposed under Title 2,
88	88	Chapter 201 and 202, providing the hydraulic fracturing fluid
89	89	consists entirely of fluids other than fresh water.
90	90	(c) The RRC will collect and maintain the requisite data to
91	91	monitor qualification for the tax credit. Specifically, the RRC
92	92	will append to its existing reporting requirement for newly drilled
93	93	wells for this optional tax credit:
94	94	(1) the volume of fluids used in hydraulic fracturing;
95	95	(2) location of source of alternative fluid, if not
96	96	groundwater;
97	97	(3) for groundwater, respondents must provide quality
98	98	of the groundwater expressed in TDS (parts per million of total
99	99	dissolved solids); and
100	100	(4) for groundwater, the GPS location of the source
101	101	well.
102	102	(d) Each quarter, the RRC will provide to the Comptroller a
103	103	list of new wells qualifying for the tax credit and identify the
104	104	operator. To receive the tax credit, the operator of the well must
105	105	apply to the Comptroller for the tax credit.
106	106	(e) The RRC by rule shall create or use a form or forum for
107	107	producers to certify the qualification for the credit.
108	108	(f) The RRC may conduct random inspections to enforce this
109	109	section as the RRC deems appropriate.
110	110	(g) Penalty for claiming a tax credit based on false
111	111	information supplied to the RRC which would otherwise disqualify
112	112	the claim will result in a penalty as deemed appropriate by RRC.
113	113	(h) The RRC may recognize oil and gas operators who made
114	114	significant progress in the use of alternative fluids.
115	115	(i) The tax credit will begin January 1, 2016 and by
116	116	December 31, 2019, the RRC will report the status of the program's
117	117	progress to discuss extension of the incentive program.