Texas Tax Code

§ 202.061 — TAX CREDIT FOR ENHANCED EFFICIENCY EQUIPMENT

TX § 202.061Title 2. STATE TAXATION · Part I. SEVERANCE TAXES · Ch. 202. OIL PRODUCTION TAX · Art. B. TAX IMPOSED

Statute text

(a)In this section:

(1)"Enhanced efficiency equipment" means equipment used in the production of oil that reduces the energy used to produce a barrel of fluid by 10 percent or more when compared to commonly available alternative equipment. The term does not include a motor or downhole pump. Equipment does not qualify as enhanced efficiency equipment unless an institution of higher education approved by the comptroller that is located in this state and that has an accredited petroleum engineering program evaluated the equipment and determined that the equipment does produce the required energy reduction.

(2)"Marginal well" means an oil well that produces 10 barrels of oil or less per day on average during a month.

(b)The taxpayer responsible for the payment of severance taxes on the production from a marginal well in this state on which enhanced efficiency equipment is installed and used is entitled to a credit in an amount equal to 10 percent of the cost of the equipment, provided that:

(1)the cumulative total of all severance tax credits authorized by this section may not exceed $1,000 for any marginal well;

(2)the enhanced efficiency equipment installed in a qualifying marginal well must have been purchased and installed not earlier than September 1, 2005, or later than September 1, 2013;

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Legislative history

Acts 2007, 80th Leg., R.S., Ch. 931 (H.B. 3314), Sec. 19, eff. September 1, 2007.