Texas 2023 - 88th Regular

Texas Senate Bill SB1549 Compare Versions

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1	1	2023S0239-T 03/03/23
2	2	By: Blanco S.B. No. 1549
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to an exemption from the severance tax for gas produced
8	8	from certain wells that is consumed on site and would otherwise have
9	9	been lawfully vented or flared.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter B, Chapter 201, Tax Code, is amended
12	12	by adding Section 201.061 to read as follows:
13	13	Sec. 201.061. EXEMPTION FOR GAS PRODUCED THAT WOULD
14	14	OTHERWISE HAVE BEEN VENTED OR FLARED. (a) In this section:
15	15	(1) "Commission" means the Railroad Commission of
16	16	Texas.
17	17	(2) "Qualifying well" means a well that:
18	18	(A) is connected to a pipeline on which pipeline
19	19	takeaway capacity is not expected to meet the demand for gas
20	20	produced by the well;
21	21	(B) is not connected to a pipeline and for which
22	22	connection to a pipeline is technically or commercially unfeasible
23	23	but is operated by a well operator who has contractually dedicated
24	24	the well, the gas produced from the well, or the land or lease on
25	25	which the well is located to a pipeline operator; or
26	26	(C) is not connected to a pipeline and is
27	27	operated by a well operator who has not contractually dedicated the
28	28	well, the gas produced from the well, or the land or lease on which
29	29	the well is located to a pipeline operator.
30	30	(3) "Well operator" means the person responsible for
31	31	the actual physical operation of an oil or gas well.
32	32	(b) Gas produced from a qualifying well that is consumed on
33	33	the well site and would otherwise have been lawfully vented or
34	34	flared is not subject to the tax imposed by this chapter.
35	35	(c) A well operator and a pipeline operator, as applicable,
36	36	may apply to the commission in the manner provided by Subsection
37	37	(d), (e), or (f), as applicable, for certification that a well is a
38	38	qualifying well.
39	39	(d) An application that relates to a well described by
40	40	Subsection (a)(2)(A) must:
41	41	(1) attest that the pipeline takeaway capacity is not
42	42	expected to meet the demand for gas produced by the well;
43	43	(2) be submitted jointly by the well operator and the
44	44	pipeline operator; and
45	45	(3) certify that the well has received an exemption to
46	46	flare from the commission totaling 30 days in the year preceding
47	47	their application.
48	48	(e) An application that relates to a well described by
49	49	Subsection (a)(2)(B) must:
50	50	(1) attest that:
51	51	(A) the well is not connected to a pipeline; and
52	52	(B) it is technically or commercially unfeasible
53	53	to connect the well to a pipeline;
54	54	(2) be submitted jointly by the well operator and the
55	55	pipeline operator.
56	56	(3) certify that the well has received an exemption to
57	57	flare from the commission totaling 30 days in the year preceding
58	58	their application.
59	59	(f) An application that relates to a well described by
60	60	Subsection (a)(2)(C) must:
61	61	(1) attest that the well:
62	62	(A) is not connected to a pipeline;
63	63	(B) is operated by a well operator who has not
64	64	contractually dedicated the well, the gas produced from the well,
65	65	or the land or lease on which the well is located to a pipeline
66	66	operator;
67	67	(2) be submitted by the well operator; and
68	68	(3) certify that the well has received an exemption to
69	69	flare from the commission totaling 30 days in the year preceding
70	70	their application.
71	71	(g) The commission may require an applicant described by
72	72	Subsection (c) to provide the commission with any information the
73	73	commission determines is relevant to determining whether a well is
74	74	a qualifying well. If the commission approves an application
75	75	submitted under Subsection (c), the commission shall issue a
76	76	certificate designating the well as a qualifying well. The
77	77	certificate shall expire one year after the commission issues the
78	78	certification.
79	79	(h) A qualified well certified under subsection (d) must use
80	80	all available pipeline takeaway capacity before using gas for on
81	81	site uses which qualify for the exemption provided by this section.
82	82	(i) To qualify for the exemption provided by this section,
83	83	the person responsible for paying the tax imposed by this chapter
84	84	must apply to the comptroller. The application must contain the
85	85	certificate issued by the commission under Subsection (g). The
86	86	comptroller may require a person applying for the exemption to
87	87	provide any additional information the comptroller determines is
88	88	relevant to determining whether the gas is eligible for the
89	89	exemption.
90	90	(j) The commission, well operator, or pipeline operator
91	91	shall notify the comptroller in writing immediately if a well
92	92	certified under this section is no longer a qualifying well.
93	93	(k) The commission and the comptroller may adopt rules
94	94	necessary to implement and administer this section.
95	95	SECTION 2. The change in law made by this Act does not
96	96	affect tax liability accruing before the effective date of this
97	97	Act. That liability continues in effect as if this Act had not been
98	98	enacted, and the former law is continued in effect for the
99	99	collection of taxes due and for civil and criminal enforcement of
100	100	the liability for those taxes.
101	101	SECTION 3. This Act takes effect September 1, 2023.