84R12183 CJC-D
	By: Darby	H.B. No. 4035

	A BILL TO BE ENTITLED
	AN ACT
	relating to an oil and gas severance tax credit for certain
	community investments.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle I, Title 2, Tax Code, is amended by
	adding Chapter 205 to read as follows:
	CHAPTER 205. OIL AND GAS TAX CREDIT FOR COMMUNITY INVESTMENT
	Sec. 205.001.  DEFINITIONS. In this chapter:
	(1)  "No water production technique" means a method of
	producing oil and gas that uses nitrogen, carbon dioxide, or fluids
	other than water.
	(2)  "Operator" means the person responsible for the
	actual physical operation of an oil or gas well.
	(3)  "Public junior college" has the meaning assigned
	by Section 61.003, Education Code.
	(4)  "Water infrastructure and road project" means a
	project to acquire, construct, finance, improve, operate, and
	maintain water infrastructure and macadamized, graveled, or paved
	roads, or improvements, including storm drainage, in aid of those
	roads.
	Sec. 205.002.  TAX CREDIT. (a) The operator of an oil or gas
	well is entitled to a credit against the tax imposed by Chapter 201
	or 202, as applicable, as provided by this chapter if the operator:
	(1)  implements a no water production technique to
	produce oil or gas in this state;
	(2)  contributes towards the costs of a water
	infrastructure and road project in this state; or
	(3)  makes a monetary donation to a public junior
	college in this state.
	(b)  Subject to Subsection (c), the amount of the credit to
	which an operator is entitled under this chapter is an amount equal
	to:
	(1)  the costs to the operator of implementation of the
	no water production technique;
	(2)  the amount of money the operator contributes to a
	water infrastructure and road project; or
	(3)  the amount of money the operator donates to a
	public junior college.
	(c)  The amount of the credit to which an operator is
	entitled under this chapter may not exceed $10,000. An operator may
	not claim an amount of the credit on a report that exceeds the
	amount of tax due on the report. Any unused amount of the credit may
	be carried forward to subsequent reports until the credit amount is
	exhausted.  An operator may not receive more than one type of tax
	credit authorized under Subsection (a), and may claim only one tax
	credit for that type of credit.
	(d)  The credit is allocated to each person who bears the tax
	under Section 201.205 or 202.156, as applicable, according to the
	person's proportionate share in the oil or gas produced.
	Sec. 205.003.  APPLICATION. (a) To qualify for the credit
	provided under this chapter, the person responsible for paying the
	tax must apply to the comptroller.
	(b)  The application must include any information required
	by the comptroller.
	SECTION 2.  The comptroller shall adopt rules necessary to
	administer Chapter 205, Tax Code, as added by this Act, not later
	than December 31, 2015.
	SECTION 3.  Chapter 205, Tax Code, as added by this Act,
	applies only to oil or gas produced on or after the effective date
	of this Act. Oil or gas produced before the effective date of this
	Act is subject to the law in effect when the oil or gas was produced,
	and that law is continued in effect for that purpose.
	SECTION 4.  The change in law made by this Act does not
	affect tax liability accruing before the effective date of this
	Act. That liability continues in effect as if this Act had not been
	enacted, and the former law is continued in effect for the
	collection of taxes due and for civil and criminal enforcement of
	the liability for those taxes.
	SECTION 5.  (a)  Except as provided by Subsection (b) of this
	section, this Act takes effect January 1, 2016.
	(b)  Section 2 of this Act takes effect immediately if this
	Act receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, Section 2 of this Act takes effect September 1, 2015.