Johnson Bill Closes High-Cost Gas Tax Break To New Wells

The text as introduced · 480 words

89R2248 RDS-F

By: Johnson
S.B. No. 1296

A BILL TO BE ENTITLED

AN ACT

relating to phasing out the tax reduction for certain high-cost

gas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 201.057(f), Tax Code, is amended to read

as follows:

(f) To qualify for the tax reduction provided by this

section, the person responsible for paying the tax must apply to the

comptroller. Notwithstanding any other provision of this section,

the application must be filed with the comptroller before September

1, 2025. The application must contain the certification of the

commission that the well produces high-cost gas and must contain a

report of drilling and 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 tax reduction, an application to the

comptroller for certification according to Subsection (a)(2) must

be filed with the comptroller before September 1, 2025, and 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 to obtain the

maximum tax reduction but is filed before September 1, 2025 , the tax

reduction is reduced by 10 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. The

comptroller shall approve the application of a person who

demonstrates that the gas is eligible for the tax reduction. The

comptroller may require a person applying for the tax reduction to

provide any relevant information in 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 well previously certified as

producing high-cost gas does not produce high-cost gas or if it

takes any action or discovers any information that affects the

eligibility of gas for a tax reduction under this section.

SECTION 2. 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 3. This Act takes effect immediately if it 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, this

Act takes effect September 1, 2025.