84R12183 CJC-D
By: Darby H.B. No. 4035
A BILL TO BE ENTITLED
AN ACT
relating to an oil and gas severance tax credit for certain
community investments.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle I, Title 2, Tax Code, is amended by
adding Chapter 205 to read as follows:
CHAPTER 205. OIL AND GAS TAX CREDIT FOR COMMUNITY INVESTMENT
Sec. 205.001. DEFINITIONS. In this chapter:
(1) "No water production technique" means a method of
producing oil and gas that uses nitrogen, carbon dioxide, or fluids
other than water.
(2) "Operator" means the person responsible for the
actual physical operation of an oil or gas well.
(3) "Public junior college" has the meaning assigned
by Section 61.003, Education Code.
(4) "Water infrastructure and road project" means a
project to acquire, construct, finance, improve, operate, and
maintain water infrastructure and macadamized, graveled, or paved
roads, or improvements, including storm drainage, in aid of those
roads.
Sec. 205.002. TAX CREDIT. (a) The operator of an oil or gas
well is entitled to a credit against the tax imposed by Chapter 201
or 202, as applicable, as provided by this chapter if the operator:
(1) implements a no water production technique to
produce oil or gas in this state;
(2) contributes towards the costs of a water
infrastructure and road project in this state; or
(3) makes a monetary donation to a public junior
college in this state.
(b) Subject to Subsection (c), the amount of the credit to
which an operator is entitled under this chapter is an amount equal
to:
(1) the costs to the operator of implementation of the
no water production technique;
(2) the amount of money the operator contributes to a
water infrastructure and road project; or
(3) the amount of money the operator donates to a
public junior college.
(c) The amount of the credit to which an operator is
entitled under this chapter may not exceed $10,000. An operator may
not claim an amount of the credit on a report that exceeds the
amount of tax due on the report. Any unused amount of the credit may
be carried forward to subsequent reports until the credit amount is
exhausted. An operator may not receive more than one type of tax
credit authorized under Subsection (a), and may claim only one tax
credit for that type of credit.
(d) The credit is allocated to each person who bears the tax
under Section 201.205 or 202.156, as applicable, according to the
person's proportionate share in the oil or gas produced.
Sec. 205.003. APPLICATION. (a) To qualify for the credit
provided under this chapter, the person responsible for paying the
tax must apply to the comptroller.
(b) The application must include any information required
by the comptroller.
SECTION 2. The comptroller shall adopt rules necessary to
administer Chapter 205, Tax Code, as added by this Act, not later
than December 31, 2015.
SECTION 3. Chapter 205, Tax Code, as added by this Act,
applies only to oil or gas produced on or after the effective date
of this Act. Oil or gas produced before the effective date of this
Act is subject to the law in effect when the oil or gas was produced,
and that law is continued in effect for that purpose.
SECTION 4. The change in law made 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 5. (a) Except as provided by Subsection (b) of this
section, this Act takes effect January 1, 2016.
(b) Section 2 of this Act takes effect immediately if this
Act 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, Section 2 of this Act takes effect September 1, 2015.