Tex.
Tax Code Section 202.060
Exemption for Oil and Gas from Reactivated Orphaned Wells
(a)
In this section:(1)
“Commission” means the Railroad Commission of Texas.(2)
“Orphaned well” has the meaning assigned by Section 89.047 (Orphaned Well Reduction Program), Natural Resources Code.(b)
The commission shall issue a certificate to a person who is designated by the commission under Section 89.047 (Orphaned Well Reduction Program), Natural Resources Code, as the operator of an orphaned well. The certificate must identify the operator to whom and the well for which the certificate is issued.(c)
Hydrocarbons produced from the well identified in the certificate qualify for a severance tax exemption.(d)
The commission shall adopt all rules necessary to administer this section.(e)
To qualify for the tax exemption provided by this section, the person responsible for paying the tax must apply to the comptroller. The application must include a copy of the certificate issued by the commission. The comptroller shall approve the application if the person demonstrates that the hydrocarbon production is eligible for a tax exemption. The comptroller may require a person applying for the tax exemption to provide any relevant information necessary to administer this section. The comptroller may establish procedures to comply with this section.(f)
The exemption takes effect on the first day of the month following the month in which the comptroller approves the application.(g)
If the person to whom the certificate is issued ceases to be the operator of the well as shown by the records of the commission, the commission shall notify the comptroller. The exemption expires on the date the notice is received.(h)
A person who makes or subscribes an application, report, or other document and submits it to the commission to form the basis for an application for a tax exemption under this section, knowing that the application, report, or other document is untrue in a material fact, is subject to the penalties imposed by Chapters 85 (Conservation of Oil and Gas) and 91 (Provisions Generally Applicable), Natural Resources Code.(i)
A person is liable to the state for a civil penalty if the person applies or attempts to apply the tax exemption authorized by this section for a well after the person to whom the certificate for the well was issued ceases to be the operator of the well as shown by the records of the commission. The amount of the penalty may not exceed the sum of:(1)
$10,000; and(2)
the difference between the amount of taxes paid or attempted to be paid and the amount of taxes due.(j)
The attorney general may recover a penalty under Subsection (i) in a suit brought on behalf of the state. Venue for the suit is in Travis County.
Source:
Section 202.060 — Exemption for Oil and Gas from Reactivated Orphaned Wells, https://statutes.capitol.texas.gov/Docs/TX/htm/TX.202.htm#202.060 (accessed Jun. 5, 2024).
