| 1 | 1 | | 89R2248 RDS-F |
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| 2 | 2 | | By: Johnson S.B. No. 1296 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to phasing out the tax reduction for certain high-cost |
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| 10 | 10 | | gas. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Section 201.057(f), Tax Code, is amended to read |
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| 13 | 13 | | as follows: |
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| 14 | 14 | | (f) To qualify for the tax reduction provided by this |
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| 15 | 15 | | section, the person responsible for paying the tax must apply to the |
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| 16 | 16 | | comptroller. Notwithstanding any other provision of this section, |
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| 17 | 17 | | the application must be filed with the comptroller before September |
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| 18 | 18 | | 1, 2025. The application must contain the certification of the |
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| 19 | 19 | | commission that the well produces high-cost gas and must contain a |
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| 20 | 20 | | report of drilling and completion costs incurred for each well on a |
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| 21 | 21 | | form and in the detail as determined by the comptroller. Drilling |
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| 22 | 22 | | and completion costs for a recompletion shall only include current |
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| 23 | 23 | | and contemporaneous costs associated with the |
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| 24 | 24 | | recompletion. Notwithstanding any other provision of this |
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| 25 | 25 | | section, to obtain the maximum tax reduction, an application to the |
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| 26 | 26 | | comptroller for certification according to Subsection (a)(2) must |
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| 27 | 27 | | be filed with the comptroller before September 1, 2025, and at the |
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| 28 | 28 | | later of the 180th day after the date of first production or the |
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| 29 | 29 | | 45th day after the date of approval by the commission. If the |
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| 30 | 30 | | application is not filed by the applicable deadline to obtain the |
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| 31 | 31 | | maximum tax reduction but is filed before September 1, 2025, the tax |
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| 32 | 32 | | reduction is reduced by 10 percent for the period beginning on the |
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| 33 | 33 | | 180th day after the first day of production and ending on the date |
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| 34 | 34 | | on which the application is filed with the comptroller. The |
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| 35 | 35 | | comptroller shall approve the application of a person who |
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| 36 | 36 | | demonstrates that the gas is eligible for the tax reduction. The |
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| 37 | 37 | | comptroller may require a person applying for the tax reduction to |
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| 38 | 38 | | provide any relevant information in the person's monthly report |
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| 39 | 39 | | that the comptroller considers necessary to administer this |
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| 40 | 40 | | section. The commission shall notify the comptroller in writing |
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| 41 | 41 | | immediately if it determines that a well previously certified as |
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| 42 | 42 | | producing high-cost gas does not produce high-cost gas or if it |
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| 43 | 43 | | takes any action or discovers any information that affects the |
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| 44 | 44 | | eligibility of gas for a tax reduction under this section. |
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| 45 | 45 | | SECTION 2. The change in law made by this Act does not |
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| 46 | 46 | | affect tax liability accruing before the effective date of this |
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| 47 | 47 | | Act. That liability continues in effect as if this Act had not been |
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| 48 | 48 | | enacted, and the former law is continued in effect for the |
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| 49 | 49 | | collection of taxes due and for civil and criminal enforcement of |
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| 50 | 50 | | the liability for those taxes. |
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| 51 | 51 | | SECTION 3. This Act takes effect immediately if it receives |
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| 52 | 52 | | a vote of two-thirds of all the members elected to each house, as |
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| 53 | 53 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 54 | 54 | | Act does not receive the vote necessary for immediate effect, this |
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| 55 | 55 | | Act takes effect September 1, 2025. |
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