Texas 2017 - 85th Regular

Texas House Bill HB2277 Compare Versions

Version 1 (Old)

Version 2 (New)

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1		-	By: Darby (Senate Sponsor - Watson) H.B. No. 2277
2		-	(In the Senate - Received from the House May 8, 2017;
3		-	May 9, 2017, read first time and referred to Committee on Finance;
4		-	May 15, 2017, reported favorably by the following vote: Yeas 9,
5		-	Nays 0; May 15, 2017, sent to printer.)
6		-	Click here to see the committee vote
	1	+	H.B. No. 2277
7	2
8	3
9		-	A BILL TO BE ENTITLED
10	4		AN ACT
11	5		relating to the temporary exemption or tax reduction for certain
12	6		high-cost gas.
13	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	8		SECTION 1. Section 201.057(a)(2), Tax Code, is amended to
15	9		read as follows:
16	10		(2) "High-cost gas" means[:
17	11		[(A)] high-cost natural gas as described by
18	12		Section 107, Natural Gas Policy Act of 1978 (15 U.S.C. Section
19	13		3317), as that section existed [exists] on January 1, 1989, without
20	14		regard to whether that section is in effect or whether a
21	15		determination has been made that the gas is high-cost natural gas
22	16		for purposes of that Act[; or
23	17		[(B) all gas produced from oil wells or gas wells
24	18		within a commission approved co-production project].
25	19		SECTION 2. Section 201.057, Tax Code, is amended by
26	20		amending Subsections (c), (e), (f), (g), and (i) and adding
27	21		Subsection (g-1) to read as follows:
28	22		(c) High-cost gas [as defined in Subsection (a)(2)(A)]
29	23		produced from a well that is spudded or completed after August 31,
30	24		1996, is entitled to a reduction of the tax imposed by this chapter
31	25		for the first 120 consecutive calendar months beginning on the
32	26		first day of production, or until the cumulative value of the tax
33	27		reduction equals 50 percent of the drilling and completion costs
34	28		incurred for the well, whichever occurs first. The amount of tax
35	29		reduction shall be computed by subtracting from the tax rate
36	30		imposed by Section 201.052 the product of that tax rate times the
37	31		ratio of drilling and completion costs incurred for the well to
38	32		twice the median drilling and completion costs for high-cost wells
39	33		[as defined in Subsection (a)(2)(A)] spudded or completed during
40	34		the previous state fiscal year, except that the effective rate of
41	35		tax may not be reduced below zero.
42	36		(e) The operator of a proposed or existing gas well,
43	37		including a gas well that has not been completed, [or the operator
44	38		of any proposed or existing oil or gas well within a commission
45	39		approved co-production project,] may apply to the commission for
46	40		certification that the well produces or will produce high-cost gas.
47	41		The [Such] application[, if seeking certification as high-cost gas
48	42		according to Subsection (a)(2)(A),] may be made at any time after
49	43		the first day of production. The application may be made but is not
50	44		required to be made concurrently with a request for a determination
51	45		that gas produced from the well is high-cost natural gas for
52	46		purposes of the Natural Gas Policy Act of 1978 (15 U.S.C. Section
53	47		3301 et seq.) [or with a request for commission approval of a
54	48		co-production project]. The commission may require an applicant to
55	49		provide the commission with any relevant information required to
56	50		administer this section. For purposes of this section, a
57	51		determination that gas is high-cost natural gas for purposes of the
58	52		Natural Gas Policy Act of 1978 (15 U.S.C. Section 3301 et seq.)
59	53		[according to Subsection (a)(2)(A) or a determination that gas is
60	54		produced from within a commission approved co-production project]
61	55		is a certification that the gas is high-cost gas for purposes of
62	56		this section, and in that event additional certification is not
63	57		required to qualify for the [exemption or] tax reduction provided
64	58		by this section.
65	59		(f) To qualify for the [exemption or] tax reduction provided
66	60		by this section, the person responsible for paying the tax must
67	61		apply to the comptroller. The application must contain the
68	62		certification of the commission that the well produces high-cost
69	63		gas and[, if the application is for a well spudded or completed
70	64		after September 1, 1995,] must contain a report of drilling and
71	65		completion costs incurred for each well on a form and in the detail
72	66		as determined by the comptroller. Drilling and completion costs
73	67		for a recompletion shall only include current and contemporaneous
74	68		costs associated with the recompletion. Notwithstanding any other
75	69		provision of this section, to obtain the maximum [tax exemption or]
76	70		tax reduction [deduction], an application to the comptroller for
77	71		certification according to Subsection (a)(2) [(a)(2)(A)] must be
78	72		filed with the comptroller at the later of the 180th day after the
79	73		date of first production or the 45th day after the date of approval
80	74		by the commission. If the application is not filed by the
81	75		applicable deadline, the [tax exemption or] tax reduction
82	76		[deduction] is reduced by 10 percent for the period beginning on the
83	77		180th day after the first day of production and ending on the date
84	78		on which the application is filed with the comptroller. [An
85	79		application to the comptroller for certification according to
86	80		Subsection (a)(2)(B) may not be filed before January 1, 1990, or
87	81		after December 31, 1998.] The comptroller shall approve the
88	82		application of a person who demonstrates that the gas is eligible
89	83		for the [exemption or] tax reduction. The comptroller may require a
90	84		person applying for the [exemption or] tax reduction to provide any
91	85		relevant information in the person's monthly report that the
92	86		comptroller considers necessary to administer this section. The
93	87		commission shall notify the comptroller in writing immediately if
94	88		it determines that a [an oil or gas] well previously certified as
95	89		producing high-cost gas does not produce high-cost gas or if it
96	90		takes any action or discovers any information that affects the
97	91		eligibility of gas for a [an exemption or] tax reduction under this
98	92		section.
99	93		(g) As soon as practicable after March 1 of each year, the
100	94		comptroller shall determine [from reports containing drilling and
101	95		completion cost data as required on applications to the comptroller
102	96		under Subsection (f),] the median drilling and completion cost for
103	97		all high-cost wells [as defined in Subsection (a)(2)(A)] for which
104	98		an application for a tax reduction [exemption or reduced tax] was
105	99		made during the previous state fiscal year. In making the
106	100		determination, the comptroller shall use the drilling and
107	101		completion cost data required to be reported to the comptroller
108	102		under Subsection (f). The [Those] median drilling and completion
109	103		cost [costs] shall be used to compute the reduced tax under
110	104		Subsection (c) and is fixed on the date of the comptroller's
111	105		determination under this subsection.
112	106		(g-1) The report of drilling and completion costs required
113	107		under Subsection (f) may not be amended after March 1 of the year
114	108		following the state fiscal year in which the application was made.
115	109		(i) If, before the commission certifies that a well produces
116	110		high-cost gas or before the comptroller approves an application for
117	111		a [an exemption or] tax reduction under this section, the tax
118	112		imposed by this chapter is paid on high-cost gas that otherwise
119	113		qualifies for the [exemption or] tax reduction provided by this
120	114		section, the person who remitted the tax is [producer or producers
121	115		of the gas are] entitled to a refund [credit against other taxes
122	116		imposed by this chapter] in an amount equal to the difference
123	117		between the amount of the tax paid on the gas and the amount of tax
124	118		that would have been paid on the gas if it had received a [that
125	119		otherwise qualified for the exemption or] tax reduction under this
126	120		section [on or after the first day of the next month after the month
127	121		in which the application for certification under this section was
128	122		filed with the commission]. The [If the application for
129	123		certification is submitted to the commission after January 1, 2004,
130	124		the] total allowable refund [credit] for taxes paid for reporting
131	125		periods before the date the application is filed may not exceed the
132	126		total tax paid on the gas that otherwise qualified for the
133	127		[exemption or] tax reduction and that was produced during the 24
134	128		consecutive calendar months immediately preceding the month in
135	129		which the application for certification under this section that the
136	130		comptroller approved was filed with the commission. [The credit is
137	131		allocated to each producer according to the producer's
138	132		proportionate share in the gas.] To receive a refund [credit], the
139	133		person entitled to the refund [one or more of the producers] must
140	134		apply to the comptroller for the refund [credit] not later than the
141	135		first anniversary after the date the comptroller approves the
142	136		application for a [an exemption or] tax reduction under this
143	137		section. [If a producer demonstrates that the producer does not
144	138		have sufficient tax liability under this chapter to claim the
145	139		credit within five years from the date the application for the
146	140		credit is made, the producer is entitled to a refund in the amount
147	141		of any credit the comptroller determines may not be claimed within
148	142		that five years. Nothing in this subsection shall relieve the
149	143		obligation imposed by Subsection (b) to pay tax when due on
150	144		high-cost gas produced from co-production projects on or before
151	145		July 31, 1995.]
152	146		SECTION 3. Sections 201.057(a)(3), (a)(4), (a)(5), (b),
153	147		(d), and (j), Tax Code, are repealed.
154	148		SECTION 4. The change in law made by this Act does not
155	149		affect tax liability accruing before the effective date of this
156	150		Act. That liability continues in effect as if this Act had not been
157	151		enacted, and the former law is continued in effect for the
158	152		collection of taxes due and for civil and criminal enforcement of
159	153		the liability for those taxes.
160	154		SECTION 5. This Act takes effect September 1, 2017.
161		-	* * * * *
	155	+	______________________________ ______________________________
	156	+	President of the Senate Speaker of the House
	157	+	I certify that H.B. No. 2277 was passed by the House on May 6,
	158	+	2017, by the following vote: Yeas 141, Nays 2, 2 present, not
	159	+	voting.
	160	+	______________________________
	161	+	Chief Clerk of the House
	162	+	I certify that H.B. No. 2277 was passed by the Senate on May
	163	+	19, 2017, by the following vote: Yeas 31, Nays 0.
	164	+	______________________________
	165	+	Secretary of the Senate
	166	+	APPROVED: _____________________
	167	+	Date
	168	+	_____________________
	169	+	Governor