SB 1296

relating to phasing out the tax reduction for certain high-cost
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 201.057(f), Tax Code, is amended to read
(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
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.