Texas 2019 - 86th Regular

Texas Senate Bill SB533 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 533
	1	+	By: Birdwell, et al. S.B. No. 533
	2	+	(Paddie, Springer)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to the severance tax exemption for oil and gas produced
6	8		from certain inactive wells.
7	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	10		SECTION 1. Section 202.056(a)(4), Tax Code, is amended to
9	11		read as follows:
10	12		(4) "Two-year inactive well" means a well that has not
11	13		produced oil or gas in more than one month in the two years
12	14		preceding the date of application for severance tax exemption under
13	15		this section. The term does not include a well that is:
14	16		(A) part of an enhanced oil recovery project, as
15	17		defined by Section 89.002, Natural Resources Code; or
16	18		(B) drilled but not completed and that does not
17	19		have a record of hydrocarbon production reported to the commission.
18	20		SECTION 2. Section 202.056, Tax Code, is amended by
19	21		amending Subsections (b), (c), (d), (e), (h), and (i) and adding
20	22		Subsections (j) and (k) to read as follows:
21	23		(b) Hydrocarbons produced from a well qualify for a
22	24		five-year [10-year] severance tax exemption if the commission
23	25		designates the well as a [three-year inactive well or a] two-year
24	26		inactive well. The commission may require an applicant to provide
25	27		the commission with any relevant information required to administer
26	28		this section. The commission may require additional well tests to
27	29		determine well capability as the commission [it] deems necessary.
28	30		The commission shall notify the comptroller in writing immediately
29	31		if the commission [it] determines that the operation of the
30	32		[three-year inactive well or] two-year inactive well has been
31	33		terminated or if the commission [it] discovers any information that
32	34		affects the taxation of the production from the designated well.
33	35		(c) [If the commission designates a three-year inactive
34	36		well under this section, it shall issue a certificate designating
35	37		the well as a three-year inactive well as defined by Subsection
36	38		(a)(3) of this section. The commission may not designate a
37	39		three-year inactive well under this section after February 29,
38	40		1996.] If the commission designates a two-year inactive well under
39	41		this section, the commission [it] shall issue a certificate
40	42		designating the well as a two-year inactive well [as defined by
41	43		Subsection (a)(4) of this section. The commission may not
42	44		designate a two-year inactive well under this section after
43	45		February 28, 2010].
44	46		(d) [An application for three-year inactive well
45	47		certification shall be made during the period of September 1, 1993,
46	48		through August 31, 1995, to qualify for the tax exemption under this
47	49		section.] An application for two-year inactive well certification
48	50		must be made to the commission [shall be made during the period
49	51		September 1, 1997, through August 31, 2009,] to qualify for the tax
50	52		exemption under this section. Hydrocarbons sold after the date of
51	53		certification are eligible for the tax exemption.
52	54		(e) The commission may revoke a certificate if information
53	55		indicates that a certified well was not a [three-year inactive well
54	56		or a] two-year inactive well[, as appropriate,] or if other lease
55	57		production is credited to the certified well. Upon notice to the
56	58		operator from the commission that the certificate for tax exemption
57	59		under this section has been revoked, the tax exemption may not be
58	60		applied to hydrocarbons sold from that well from the date of
59	61		revocation.
60	62		(h) If the tax is paid at the full rate provided by Section
61	63		201.052(a) or[, 201.052(b),] 202.052(a)[, or 202.052(b)] before
62	64		the comptroller approves an application for an exemption provided
63	65		for in this chapter, the operator is entitled to a credit against
64	66		taxes imposed by this chapter in an amount equal to the tax paid. To
65	67		receive a credit, the operator must apply to the comptroller for the
66	68		credit before the expiration of the applicable period for filing a
67	69		tax refund claim under Section 111.104.
68	70		(i) A [Penalties
69	71		[(1) Any] person who makes or subscribes any
70	72		application, report, or other document and submits the application,
71	73		report, or other document [it] to the commission to form the basis
72	74		for an application for a tax exemption under this section, knowing
73	75		that the application, report, or other document is false or untrue
74	76		in a material fact, may be subject to the penalties imposed by
75	77		Chapters 85 and 91, Natural Resources Code.
76	78		(j) On [(2) Upon] notice from the commission that the
77	79		certification for a [three-year inactive well or a] two-year
78	80		inactive well has been revoked, the tax exemption shall not apply to
79	81		oil or gas production sold after the date of notification. A [Any]
80	82		person who violates this subsection is liable to the state for a
81	83		civil penalty if the person applies or attempts to apply the tax
82	84		exemption allowed by this chapter after the certification for a
83	85		[three-year inactive well or a] two-year inactive well is revoked.
84	86		The amount of the penalty may not exceed the sum of:
85	87		(1) [(A)] $10,000; and
86	88		(2) [(B)] the difference between the amount of taxes
87	89		paid or attempted to be paid and the amount of taxes due.
88	90		(k) [(3)] The attorney general may recover a penalty under
89	91		Subsection (j) [Subdivision (2) of this subsection] in a suit
90	92		brought on behalf of the state. Venue for the suit is in Travis
91	93		County.
92	94		SECTION 3. Section 202.056(a)(3), Tax Code, is repealed.
93	95		SECTION 4. The changes in law made by this Act apply only to
94	96		an oil or gas well designated by the Railroad Commission of Texas as
95	97		a two-year inactive well on or after the effective date of this Act.
96	98		An oil or gas well designated by the Railroad Commission of Texas as
97	99		a two-year inactive well, or as a three-year inactive well, before
98	100		the effective date of this Act is governed by the law in effect
99	101		immediately before that date, and the former law is continued in
100	102		effect for that purpose.
101	103		SECTION 5. This Act takes effect September 1, 2019.
102		-	______________________________ ______________________________
103		-	President of the Senate Speaker of the House
104		-	I hereby certify that S.B. No. 533 passed the Senate on
105		-	March 27, 2019, by the following vote: Yeas 31, Nays 0.
106		-	______________________________
107		-	Secretary of the Senate
108		-	I hereby certify that S.B. No. 533 passed the House on
109		-	April 24, 2019, by the following vote: Yeas 134, Nays 0, two
110		-	present not voting.
111		-	______________________________
112		-	Chief Clerk of the House
113		-	Approved:
114		-	______________________________
115		-	Date
116		-	______________________________
117		-	Governor