Texas 2021 - 87th Regular

Texas Senate Bill SB1293 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	87R9422 BEF-D
2	2	By: Eckhardt S.B. No. 1293
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the applicability of the gas production tax to flared or
8	8	vented gas at an increased rate.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 201.052, Tax Code, is amended to read as
11	11	follows:
12	12	Sec. 201.052. RATES [RATE] OF TAX. [(a)] The tax imposed
13	13	by this chapter is at the rate of:
14	14	(1) 7.5 percent of the market value of gas produced and
15	15	saved in this state by the producer; and
16	16	(2) 25 percent of the market value of gas produced and
17	17	flared or vented in this state by the producer.
18	18	SECTION 2. Section 201.053, Tax Code, is amended to read as
19	19	follows:
20	20	Sec. 201.053. GAS NOT TAXED. The tax imposed by this
21	21	chapter does not apply to gas:
22	22	(1) injected into the earth in this state, unless sold
23	23	for that purpose;
24	24	(2) [produced from oil wells with oil and lawfully
25	25	vented or flared;
26	26	[(3)] used for lifting oil, unless sold for that
27	27	purpose; or
28	28	(3) [(4)] produced in this state from a well that
29	29	qualifies under Section 202.056 or 202.060, except as provided by
30	30	Section 201.062.
31	31	SECTION 3. Section 201.054(b), Tax Code, is amended to read
32	32	as follows:
33	33	(b) The rate of the tax imposed by this section is the same
34	34	as the rate of the tax imposed by Section 201.052(1) [201.052 of
35	35	this code].
36	36	SECTION 4. Section 201.057(c), Tax Code, is amended to read
37	37	as follows:
38	38	(c) High-cost gas produced from a well that is spudded or
39	39	completed after August 31, 1996, is entitled to a reduction of the
40	40	tax imposed by this chapter for the first 120 consecutive calendar
41	41	months beginning on the first day of production, or until the
42	42	cumulative value of the tax reduction equals 50 percent of the
43	43	drilling and completion costs incurred for the well, whichever
44	44	occurs first. The amount of tax reduction shall be computed by
45	45	subtracting from the tax rate imposed by Section 201.052(1)
46	46	[201.052] the product of that tax rate times the ratio of drilling
47	47	and completion costs incurred for the well to twice the median
48	48	drilling and completion costs for high-cost wells spudded or
49	49	completed during the previous state fiscal year, except that the
50	50	effective rate of tax may not be reduced below zero.
51	51	SECTION 5. Subchapter B, Chapter 201, Tax Code, is amended
52	52	by adding Sections 201.061 and 201.062 to read as follows:
53	53	Sec. 201.061. ANNUAL EXEMPTION FOR FLARED OR VENTED GAS.
54	54	(a) Each calendar year, a producer is entitled to an exemption from
55	55	the tax imposed at the rate provided by Section 201.052(2).
56	56	(b) The exemption applies to gas produced and flared or
57	57	vented in this state by the producer during a calendar year in an
58	58	amount equal to, at the producer's election:
59	59	(1) 1,000 mcf; or
60	60	(2) 0.005 percent of the total amount of gas produced
61	61	in this state by the producer during the calendar year.
62	62	(c) The comptroller by rule shall provide procedures for a
63	63	producer to claim the exemption, including electing an amount under
64	64	Subsection (b) and allocating the amount among all gas produced and
65	65	flared or vented by the producer during a calendar year.
66	66	(d) The exemption under this section may not be transferred
67	67	to another producer or calendar year.
68	68	Sec. 201.062. APPLICABILITY OF CERTAIN PROVISIONS TO FLARED
69	69	OR VENTED GAS. Notwithstanding any other law including Section
70	70	201.058(a), Sections 201.057, 201.059, 202.056, 202.057, and
71	71	202.060 do not apply to gas that is flared or vented and may not be
72	72	used to reduce any amount of tax imposed at the rate provided by
73	73	Section 201.052(2).
74	74	SECTION 6. Sections 201.101(a) and (c), Tax Code, are
75	75	amended to read as follows:
76	76	(a) Except as provided by Section 201.1011, the [The] market
77	77	value of gas is its value at the mouth of the well from which it is
78	78	produced. The value of gas at the mouth of the well is determined by
79	79	ascertaining the producer's actual marketing costs and subtracting
80	80	those costs from the producer's gross cash receipts from the sale of
81	81	the gas.
82	82	(c) Marketing costs do not include:
83	83	(1) costs incurred in producing the gas;
84	84	(2) costs incurred in normal lease separation of the
85	85	oil or condensate; [or]
86	86	(3) insurance premiums on the marketing facility;
87	87	(4) the value of gas that is flared or vented; or
88	88	(5) any cost associated with flaring or venting gas.
89	89	SECTION 7. Subchapter C, Chapter 201, Tax Code, is amended
90	90	by adding Section 201.1011 to read as follows:
91	91	Sec. 201.1011. MARKET VALUE OF FLARED OR VENTED GAS. (a)
92	92	The market value of flared or vented gas is equal to the amount
93	93	determined under Subsection (b) for the month in which the gas is
94	94	produced.
95	95	(b) The comptroller shall determine the average cash value
96	96	at the mouth of the well for all gas produced and saved in this state
97	97	during each month, with no deduction for marketing costs. The
98	98	comptroller shall publish the amount determined on the
99	99	comptroller's Internet website.
100	100	(c) The comptroller may determine an amount under
101	101	Subsection (b) using a price index or other available statistical
102	102	data.
103	103	SECTION 8. Section 201.151, Tax Code, is amended to read as
104	104	follows:
105	105	Sec. 201.151. PRODUCER'S RECORDS. (a) A producer shall
106	106	keep accurate records of all gas the producer produces, including
107	107	the amount of gas produced and saved and the amount of gas produced
108	108	and flared or vented.
109	109	(b) The records shall be kept in the state.
110	110	SECTION 9. Section 201.201, Tax Code, is amended to read as
111	111	follows:
112	112	Sec. 201.201. TAX DUE. The tax imposed by this chapter for
113	113	gas produced [and saved] is due at the office of the comptroller in
114	114	Austin on the 20th day of the second month following the month of
115	115	production.
116	116	SECTION 10. Section 201.203(a), Tax Code, is amended to
117	117	read as follows:
118	118	(a) On or before the 20th day of the second month following
119	119	the month in which gas was produced, the producer shall file a
120	120	report with the comptroller on forms prescribed by the comptroller.
121	121	The report must contain the following information concerning gas
122	122	produced during the month being reported:
123	123	(1) the gross amount of gas produced that is subject to
124	124	the tax imposed by this chapter, including separate statements of
125	125	the amount of gas produced and saved and the amount of gas produced
126	126	and flared or vented;
127	127	(2) the leases from which the gas was produced;
128	128	(3) the names and addresses of the first purchasers of
129	129	the gas, if applicable; and
130	130	(4) other information the comptroller may reasonably
131	131	require.
132	132	SECTION 11. The changes in law made by this Act do not
133	133	affect tax liability accruing before the effective date of this
134	134	Act. That liability continues in effect as if this Act had not been
135	135	enacted, and the former law is continued in effect for the
136	136	collection of taxes due and for civil and criminal enforcement of
137	137	the liability for those taxes.
138	138	SECTION 12. This Act takes effect September 1, 2021.