2023S0239-T 03/03/23     By: Blanco S.B. No. 1549     A BILL TO BE ENTITLED   AN ACT   relating to an exemption from the severance tax for gas produced   from certain wells that is consumed on site and would otherwise have   been lawfully vented or flared.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter B, Chapter 201, Tax Code, is amended   by adding Section 201.061 to read as follows:          Sec. 201.061.  EXEMPTION FOR GAS PRODUCED THAT WOULD   OTHERWISE HAVE BEEN VENTED OR FLARED. (a)  In this section:                (1)  "Commission" means the Railroad Commission of   Texas.                (2)  "Qualifying well" means a well that:                      (A)  is connected to a pipeline on which pipeline   takeaway capacity is not expected to meet the demand for gas   produced by the well;                      (B)  is not connected to a pipeline and for which   connection to a pipeline is technically or commercially unfeasible   but is operated by a well operator who has contractually dedicated   the well, the gas produced from the well, or the land or lease on   which the well is located to a pipeline operator; or                      (C)  is not connected to a pipeline and is   operated by a well operator who has not contractually dedicated the   well, the gas produced from the well, or the land or lease on which   the well is located to a pipeline operator.                (3)  "Well operator" means the person responsible for   the actual physical operation of an oil or gas well.          (b)  Gas produced from a qualifying well that is consumed on   the well site and would otherwise have been lawfully vented or   flared is not subject to the tax imposed by this chapter.          (c)  A well operator and a pipeline operator, as applicable,   may apply to the commission in the manner provided by Subsection   (d), (e), or (f), as applicable, for certification that a well is a   qualifying well.          (d)  An application that relates to a well described by   Subsection (a)(2)(A) must:                (1)  attest that the pipeline takeaway capacity is not   expected to meet the demand for gas produced by the well;                (2)  be submitted jointly by the well operator and the   pipeline operator; and                (3)  certify that the well has received an exemption to   flare from the commission totaling 30 days in the year preceding   their application.          (e)  An application that relates to a well described by   Subsection (a)(2)(B) must:                (1)  attest that:                      (A)  the well is not connected to a pipeline; and                      (B)  it is technically or commercially unfeasible   to connect the well to a pipeline;                (2)  be submitted jointly by the well operator and the   pipeline operator.                (3)  certify that the well has received an exemption to   flare from the commission totaling 30 days in the year preceding   their application.          (f)  An application that relates to a well described by   Subsection (a)(2)(C) must:                (1)  attest that the well:                      (A)  is not connected to a pipeline;                      (B)  is operated by a well operator who has not   contractually dedicated the well, the gas produced from the well,   or the land or lease on which the well is located to a pipeline   operator;                (2)  be submitted by the well operator; and                (3)  certify that the well has received an exemption to   flare from the commission totaling 30 days in the year preceding   their application.          (g)  The commission may require an applicant described by   Subsection (c) to provide the commission with any information the   commission determines is relevant to determining whether a well is   a qualifying well.  If the commission approves an application   submitted under Subsection (c), the commission shall issue a   certificate designating the well as a qualifying well.  The   certificate shall expire one year after the commission issues the   certification.          (h)  A qualified well certified under subsection (d) must use   all available pipeline takeaway capacity before using gas for on   site uses which qualify for the exemption provided by this section.          (i)  To qualify for the exemption provided by this section,   the person responsible for paying the tax imposed by this chapter   must apply to the comptroller. The application must contain the   certificate issued by the commission under Subsection (g). The   comptroller may require a person applying for the exemption to   provide any additional information the comptroller determines is   relevant to determining whether the gas is eligible for the   exemption.          (j)  The commission, well operator, or pipeline operator   shall notify the comptroller in writing immediately if a well   certified under this section is no longer a qualifying well.          (k)  The commission and the comptroller may adopt rules   necessary to implement and administer 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 September 1, 2023.