Texas House Bill HB879

Texas 2021 - 87th Regular

Caption

Relating to phasing out the tax reduction for certain high-cost gas.

Impact

The implementation of HB 879 would mainly affect taxation policies related to gas production, particularly favoring an expiration of tax benefits for higher-cost producers. By reducing tax incentives over time, the bill could potentially stabilize and increase state revenue from gas production while aligning Texas tax obligations with changing market conditions. Nonetheless, this could necessitate producers to adapt to stricter financial expectations and operational changes, as reduced tax incentives may affect profitability for certain producers reliant on these reductions for financial viability.

Summary

House Bill 879 pertains to the phasing out of tax reductions applicable to certain high-cost gas producers in Texas. The bill amends Section 201.057 of the Tax Code, establishing a framework for the qualification and application process for tax reductions. This legislation aims to provide a structured approach for gas producers, ensuring they comply with necessary reporting requirements to receive the tax reduction benefits. Producers must file their applications for the tax reduction by specific deadlines to qualify for the maximum benefits. If not filed accordingly, the tax reduction will be subject to a percentage deduction depending on when the application is submitted.

Contention

While proponents of HB 879 might argue that phasing out tax reductions can lead to greater fiscal responsibility and a more equitable tax structure across all gas producers, there may be pushback from industry stakeholders. Critics of this bill could contend that the alterations negatively impact the competitive standing of high-cost gas producers, especially smaller companies that may struggle to compete with larger players in the industry who might leverage economies of scale. Concerns may also arise regarding job impacts in sectors dependent on high-cost gas production, which adds to the debate on the long-term implications of such tax policy changes.