Bill Text: TX HB2277 | 2017-2018 | 85th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the temporary exemption or tax reduction for certain high-cost gas.
Spectrum: Bipartisan Bill
Status: (Passed) 2017-06-01 - Effective on 9/1/17 [HB2277 Detail]
Download: Texas-2017-HB2277-Introduced.html
Bill Title: Relating to the temporary exemption or tax reduction for certain high-cost gas.
Spectrum: Bipartisan Bill
Status: (Passed) 2017-06-01 - Effective on 9/1/17 [HB2277 Detail]
Download: Texas-2017-HB2277-Introduced.html
By: Darby | H.B. No. 2277 |
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relating to fixing the median cost of high-cost gas wells. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 201.057, Tax Code, is amended by | ||
amending subsections (a), (c), (e) through (g), and (i), and adding | ||
subsection (g-1) to read as follows: | ||
(a) In this section: | ||
(1) "Commission" means the Railroad Commission of | ||
Texas. | ||
(2) "High-cost gas" means[ |
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Section 107, Natural Gas Policy Act of 1978 (15 U.S.C. Section | ||
3317), as that section exists on January 1, 1989, without regard to | ||
whether that section is in effect or whether a determination has | ||
been made that the gas is high-cost natural gas for purposes of that | ||
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(6) "Operator" means the person responsible for the | ||
actual physical operation of an oil or gas well. | ||
(7) "Consecutive months" means months in consecutive | ||
order, regardless of whether or not a well produces oil or gas | ||
during any or all such months. | ||
(c) High-cost gas as defined in Subsection (a)(2) | ||
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after August 31, 1996, is entitled to a reduction of the tax imposed | ||
by this chapter for the first 120 consecutive calendar months | ||
beginning on the first day of production, or until the cumulative | ||
value of the tax reduction equals 50 percent of the drilling and | ||
completion costs incurred for the well, whichever occurs first. | ||
The amount of tax reduction shall be computed by subtracting from | ||
the tax rate imposed by Section 201.052 the product of that tax rate | ||
times the ratio of drilling and completion costs incurred for the | ||
well to twice the median drilling and completion costs for | ||
high-cost wells as defined in Subsection (a)(2) [ |
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spudded or completed during the previous state fiscal year, except | ||
that the effective rate of tax may not be reduced below zero. | ||
(e) The operator of a proposed or existing gas well, | ||
including a gas well that has not been completed[ |
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certification that the well produces or will produce high-cost gas. | ||
Such application [ |
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the first day of production. The application may be made but is not | ||
required to be made concurrently with a request for a determination | ||
that gas produced from the well is high-cost natural gas for | ||
purposes of the Natural Gas Policy Act of 1978 (15 U.S.C. Section | ||
3301 et seq.) [ |
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provide the commission with any relevant information required to | ||
administer this section. For purposes of this section, a | ||
determination that gas is high-cost natural gas according to | ||
Subsection (a)(2) [ |
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is a certification that the gas is high-cost gas for purposes of | ||
this section, and in that event additional certification is not | ||
required to qualify for the [ |
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by this section. | ||
(f) To qualify for the [ |
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provided by this section, the person responsible for paying the tax | ||
must apply to the comptroller. The application must contain the | ||
certification of the commission that the well produces high-cost | ||
gas and[ |
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completion costs incurred for each well on a form and in the detail | ||
as determined by the comptroller. Drilling and completion costs | ||
for a recompletion shall only include current and contemporaneous | ||
costs associated with the recompletion. Notwithstanding any other | ||
provision of this section, to obtain the maximum [ |
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tax deduction, an application to the comptroller for certification | ||
according to Subsection (a)(2) [ |
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comptroller at the later of the 180th day after the date of first | ||
production or the 45th day after the date of approval by the | ||
commission. If the application is not filed by the applicable | ||
deadline, the [ |
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percent for the period beginning on the 180th day after the first | ||
day of production and ending on the date on which the application is | ||
filed with the comptroller. [ |
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comptroller shall approve the application of a person who | ||
demonstrates that the gas is eligible for the [ |
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reduction. The comptroller may require a person applying for the | ||
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the person's monthly report that the comptroller considers | ||
necessary to administer this section. The commission shall notify | ||
the comptroller in writing immediately if it determines that a [ |
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does not produce high-cost gas or if it takes any action or | ||
discovers any information that affects the eligibility of gas for | ||
an exemption or tax reduction under this section. | ||
(g) As soon as practicable after March 1 of each year, the | ||
comptroller shall determine [ |
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all high-cost wells as defined in Subsection (a)(2) [ |
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for which an application for the [ |
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during the previous state fiscal year. In making its | ||
determination, the comptroller shall use the drilling and | ||
completion cost data required under Subsection (f). The [ |
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median drilling and completion cost [ |
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date of the comptroller's determination and shall be used to | ||
compute the reduced tax under Subsection (c). | ||
(g-1) The report of drilling and completion costs required | ||
by subsection (f) may not be amended after March 1 of the year | ||
following the state fiscal year in which the application required | ||
by Subsection (f) was made. | ||
(i) If, before the commission certifies that a well produces | ||
high-cost gas or before the comptroller approves an application for | ||
the [ |
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imposed by this chapter is paid on high-cost gas that otherwise | ||
qualifies for the [ |
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section, the person who remitted the tax shall be [ |
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between the amount of the tax paid and the amount of tax that would | ||
have been paid on the high-cost gas if it had received the [ |
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provided under this section. No refund shall be due under this | ||
subsection unless the comptroller approves an application for an | ||
exemption or tax reduction under this section [ |
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The [ |
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date the application is filed may not exceed the total tax paid on | ||
the gas that otherwise qualified for the [ |
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reduction and that was produced during the 24 consecutive calendar | ||
months immediately preceding the month in which the application for | ||
certification under this section was filed with the commission. | ||
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not later than the first anniversary after the date the comptroller | ||
approves the application for a [ |
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under this section. [ |
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SECTION 2. Sections 201.057(b), (d), and (j), Tax Code, are | ||
repealed. | ||
SECTION 3. This Act takes effect September 1, 2017. |