| 1 | 1 | | 86R9569 SMT-F |
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| 2 | 2 | | By: Bailes H.B. No. 3865 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to calculation of daily production for purposes of the oil |
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| 8 | 8 | | and gas production tax credits for low-producing wells and leases. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 201.059(a)(3), Tax Code, is amended to |
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| 11 | 11 | | read as follows: |
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| 12 | 12 | | (3) "Qualifying low-producing well" means a gas well |
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| 13 | 13 | | whose production during a three-month period is no more than 90 mcf |
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| 14 | 14 | | per day, excluding gas flared pursuant to the rules of the |
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| 15 | 15 | | commission. For purposes of qualifying a gas well, production per |
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| 16 | 16 | | well per day is determined by computing the average daily |
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| 17 | 17 | | production from the well using the greater of the monthly |
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| 18 | 18 | | production from the well as reported in the monthly well production |
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| 19 | 19 | | reports [report] made to the commission and the monthly production |
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| 20 | 20 | | from the well as reported in the producer's reports made to the |
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| 21 | 21 | | comptroller under Section 201.203, including any amendments to |
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| 22 | 22 | | those reports. |
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| 23 | 23 | | SECTION 2. Section 202.058(b), Tax Code, is amended to read |
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| 24 | 24 | | as follows: |
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| 25 | 25 | | (b) For purposes of qualifying a lease, production per well |
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| 26 | 26 | | per day is determined by computing the average daily per well |
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| 27 | 27 | | production from the lease using the greater of the monthly |
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| 28 | 28 | | production from the well as reported in the monthly lease |
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| 29 | 29 | | production reports [report] made to the commission and the monthly |
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| 30 | 30 | | production from the well as reported in the producer's reports made |
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| 31 | 31 | | to the comptroller under Section 202.201, including any amendments |
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| 32 | 32 | | to those reports. For purposes of qualifying a lease, production |
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| 33 | 33 | | per well per day is measured by dividing the sum of lease production |
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| 34 | 34 | | during the three-month period by the sum of the number of well-days, |
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| 35 | 35 | | where a well-day is one well producing for one day. The operator of |
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| 36 | 36 | | a lease that is eligible for a credit under this section only on the |
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| 37 | 37 | | basis of Subsection (a)(2)(B) must pay to the comptroller a filing |
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| 38 | 38 | | fee of $100 before the comptroller may authorize the credit. |
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| 39 | 39 | | SECTION 3. The change in law made by this Act does not |
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| 40 | 40 | | affect tax liability accruing before the effective date of this |
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| 41 | 41 | | Act. That liability continues in effect as if this Act had not been |
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| 42 | 42 | | enacted, and the former law is continued in effect for the |
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| 43 | 43 | | collection of taxes due and for civil and criminal enforcement of |
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| 44 | 44 | | the liability for those taxes. |
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| 45 | 45 | | SECTION 4. This Act takes effect September 1, 2019. |
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