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.