CHAPTER 202. OIL PRODUCTION TAX
TAX CODE
TITLE 2. STATE TAXATION
SUBTITLE I. SEVERANCE TAXES
CHAPTER 202. OIL PRODUCTION TAX
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 202.001. DEFINITIONS. In this chapter:
(1) "Carrier" means a person who owns, operates, or manages a
means of transporting oil.
(2) "First purchaser" means a person who purchases crude oil
from a producer.
(3) "Oil" means crude oil or other oil taken from the earth,
regardless of the gravity of the oil.
(4) "Producer" means a person who takes oil from the earth or
water in any manner, a person who owns, controls, manages, or
leases an oil well, or a person who owns an interest, including a
royalty interest, in oil or its value, whether the oil is
produced by the person owning the interest or by another on his
behalf by lease, contract, or any other arrangement.
(5) "Royalty interest" means an interest in mineral rights in a
producing leasehold in the state, but does not include the
interest of a person having the management and operation of a
well.
(6) "Subsequent purchaser" means a person who purchases oil from
a person other than the producer of the oil, or a person
operating a reclamation plant, topping plant, treating plant,
refinery, or processing plant.
Acts 1981, 67th Leg., p. 1736, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.002. PRODUCTION AND MEASUREMENT OF OIL. (a)
"Production" means the total gross amount of oil produced,
including royalty and other interests.
(b) The amount of production shall be measured or determined by:
(1) tank tables compiled to show 100 percent of the capacity of
the tanks without deduction for overage or losses in handling; or
(2) meter or other measuring devices that accurately determine
the amount of production.
(c) If the amount of production has been measured or determined
by a tank table compiled to show less than 100 percent of the
full capacity of a tank, the amount must be raised to a basis of
100 percent.
(d) When measuring or determining the amount of production, a
reasonable deduction may be made for basic sediment and water and
a reasonable allowance may be made for correction of the
temperature to 60 degrees Fahrenheit.
(e) This section does not authorize the use of metering devices
for the measurement of oil on a well without the express
permission of the operator of the well.
Acts 1981, 67th Leg., p. 1736, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.003. AGREEMENT TO PAY TAX NOT IMPAIRED. This code does
not impair a contract in which any person has agreed to pay any
part of the tax imposed by this chapter. This code does not
relieve any person of any contractual liability.
Acts 1981, 67th Leg., p. 1737, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.004. INSPECTION OF RECORDS AND REPORTS. A person
required by this chapter to make and keep a record shall keep the
record open for inspection by the comptroller or the attorney
general at all times. Reports filed under this chapter are open
to inspection by the attorney general.
Acts 1981, 67th Leg., p. 1737, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.005. EMPLOYMENT OF AUDITORS. The comptroller may
employ auditors and supervisors to verify reports and investigate
the affairs of producers and purchasers to determine whether the
tax imposed by this chapter is being properly reported and paid.
Acts 1981, 67th Leg., p. 1737, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.006. TAXPAYER IDENTIFICATION NUMBER. (a) Except as
otherwise provided by Subsection (b), each producer must obtain a
taxpayer identification number from the comptroller.
(b) A producer whose only ownership interest in the oil is a
royalty interest must obtain a tax identification number from the
comptroller only if the producer has elected to take the
producer's share of production in kind or if the comptroller
determines that the producer's activity or interest requires that
a number be assigned to protect the state's interest in the tax
attributable to the producer.
Added by Acts 1993, 73rd Leg., ch. 587, Sec. 33, eff. Jan. 1,
1994.
SUBCHAPTER B. TAX IMPOSED
Sec. 202.051. TAX IMPOSED. There is imposed a tax on the
production of oil.
Acts 1981, 67th Leg., p. 1737, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.052. RATE OF TAX. (a) The tax imposed by this chapter
is at the rate of 4.6 percent of the market value of oil produced
in this state or 4.6 cents for each barrel of 42 standard gallons
of oil produced in this state, whichever rate results in the
greater amount of tax.
(b) For oil produced in this state from a new or expanded
enhanced recovery project that qualifies under Section 202.054 of
this code, the rate of the tax imposed by this chapter is 2.3
percent of the market value of the oil.
(c) The exemptions described by Sections 202.056, 202.059, and
202.060 apply to oil produced in this state from a well that
qualifies under Section 202.056, 202.059, or 202.060, subject to
the certifications and approvals required by those sections.
Acts 1981, 67th Leg., p. 1737, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 795, Sec. 1, eff.
Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 604, Sec. 1, eff. Sept.
1, 1991; Acts 1993, 73rd Leg., ch. 1015, Sec. 1, eff. Sept. 1,
1993; Acts 1995, 74th Leg., ch. 989, Sec. 4, eff. Jan. 1, 1996.
Amended by:
Acts 2005, 79th Leg., Ch.
267, Sec. 11, eff. January 1, 2006.
Sec. 202.053. MARKET VALUE. The market value of oil is the
actual market value plus any bonus, premium, or other thing of
value paid for the oil or that the oil will reasonably bring if
lawfully produced.
Acts 1981, 67th Leg., p. 1737, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.054. QUALIFICATION OF OIL FROM NEW OR EXPANDED ENHANCED
RECOVERY PROJECT FOR SPECIAL TAX RATE. (a) In this section:
(1) "Active operation" means the start and continuation of a
fluid injection program for a secondary or tertiary recovery
project to enhance the displacement process in the reservoir.
(2) "Commission" means the Railroad Commission of Texas.
(3) "Enhanced recovery project" means the use of any process for
the displacement of oil from the earth other than primary
recovery and includes the use of an immiscible, miscible,
chemical, thermal, or biological process and any co-production
project.
(4) "Existing enhanced recovery project" means an enhanced
recovery project that began active operations before September 1,
1989.
(5) "Expanded enhanced recovery project" or "expansion" means
the addition of injection and producing wells, the change of
injection pattern, or other operating changes to an existing
enhanced oil recovery project that will result in the recovery of
oil that would not otherwise be recovered.
(6) "Incremental production" means the volume of oil produced by
an expanded enhanced recovery project in excess of the production
decline rate established under conditions before expansion for an
existing enhanced recovery project.
(7) "Operator" means the person responsible for the actual
physical operation of an enhanced recovery project.
(8) "Positive production response" means that the rate of oil
production from the wells affected by an enhanced recovery
project is greater than the rate that would have occurred without
the project.
(9) "Primary recovery" means the displacement of oil from the
earth into the well bore by means of the natural pressure of the
oil reservoir, including artificial lift.
(10) "Production decline rate" means the projected future oil
production from a project area as extrapolated by a method
approved by the commission.
(11) "Recovered oil tax rate" means the tax rate provided by
Section 202.052(b) of this code.
(12) "Secondary recovery project" means an enhanced recovery
project that is not a tertiary recovery project.
(13) "Tertiary recovery project" means an enhanced recovery
project using a tertiary recovery method listed in the federal
June 1979 energy regulations referred to in Section 4993,
Internal Revenue Code of 1986, or approved by the United States
secretary of the treasury for purposes of administering Section
4993, Internal Revenue Code of 1986, without regard to whether
that section remains in effect.
(14) "Co-production project" means an enhanced recovery project
in which water is permanently removed from an oil and/or gas
reservoir in an effort to lower the gas-water or oil-water
contact in the reservoir or to reduce reservoir pressure to
recover entrained hydrocarbons from the reservoir that would not
be produced by conventional primary or secondary production
methods.
(15) "Commission approved co-production project" means a
reservoir development project in which the commission has
recognized that water withdrawals from an oil or gas reservoir in
excess of specified minimum volumes will result in recovery of
additional oil and/or gas from the reservoir that would not be
produced by conventional production methods and where operators
in the field have begun to implement commission requirements to
withdraw such volumes of water and dispose of such water outside
the subject reservoir. Reservoirs potentially eligible for this
designation shall be limited to those reservoirs in which oil
and/or gas has been bypassed by water encroachment caused by
production from the reservoir and such bypassed oil and/or gas
may be produced as a result of fieldwide high-volume water
withdrawals of natural formation water.
(16) "High-volume water withdrawals" means the withdrawal of
water from a reservoir in an amount sufficient to dewater
portions of the reservoir containing oil and/or gas previously
bypassed by water encroachment.
(b) Oil produced from an enhanced recovery project other than a
co-production project qualifies for the recovered oil tax rate
if, before the project begins active operation, the commission
approves the project and designates the area to be affected by
the project. The incremental production from an expanded enhanced
recovery project other than a co-production project qualifies for
the recovered oil tax rate if, before the expansion begins, the
commission approves the expansion and designates the area to be
affected by the expansion. For a new or expanded enhanced
recovery project, other than a co-production project, for which
an application for approval under this section is filed with the
commission on or after January 1, 1994, severance tax for all oil
produced during the period from January 1, 1994, through August
31, 1995, to which the recovered tax rate is applicable, must be
paid when due at the rate provided by Section 202.052(a) of this
code. On or after January 1, 1996, the payor may apply to the
comptroller for and shall be entitled to receive a tax credit
equal to the difference between the tax paid and the tax which
would have been due at the recovered oil tax rate for all
production to which the recovered tax rate is applicable during
the period from January 1, 1994, through August 31, 1995. The tax
credit may be applied to either oil or gas severance taxes
regardless of the field from which the production originates. Oil
produced from a commission approved co-production project,
whether a new enhanced recovery project or an expanded enhanced
recovery project, qualifies for the recovered oil tax rate
following commission certification of a positive production
response without regard to whether the commission approval is
before or after the project began active operations; provided,
however, tax must be paid when due at the rate provided in
Section 202.052(a) of this code for all oil produced on or before
July 31, 1995. On or after September 1, 1995, the operator may
apply to the comptroller for a refund and shall be entitled to
receive a refund equal to the difference between the tax paid on
all oil produced from a commission approved co-production project
after commission certification of a positive production response
and the tax due at the recovered oil tax rate for all oil
produced after commission certification of a positive production
response from such co-production project. The operator of a
proposed project or a proposed expansion may apply to the
commission for approval of the project or expansion under this
section. The commission may require an applicant to provide the
commission with any relevant information required to administer
this section. If approval by the commission of a unitization
agreement under Subchapter B, Chapter 101, Natural Resources
Code, is required for purposes of carrying out the project or
expansion, the commission may not approve the project or
expansion unless it approves the unitization agreement. A person
may apply for approval of a proposed enhanced recovery project or
a proposed expansion under this subsection concurrently with an
application for approval of a unitization agreement for purposes
of carrying out the enhanced recovery project or expansion under
Section 101.011, Natural Resources Code, or with an application
for certification of the project or expansion as a tertiary
recovery project for purposes of Section 4993, Internal Revenue
Code of 1986, or may make a separate application for approval.
(c) This section applies to an enhanced recovery project that
begins active operation on or after September 1, 1989, and to an
expansion that the commission approves on or after September 1,
1991. An application for approval under this section must be
filed on or after September 1, 1989, for a new enhanced recovery
project. An application for approval under this section must be
filed on or after September 1, 1991, for an expansion of an
existing enhanced recovery project. A project may not qualify as
an expansion if the project has qualified as a new enhanced
recovery project under this section. An application may be filed
on or after September 1, 1989, even if a separate application for
approval of the project or expansion has already been filed under
Subchapter B, Chapter 101, Natural Resources Code, or for
approval as a tertiary recovery project for purposes of Section
4993, Internal Revenue Code of 1986, if the operation of a new
project or the expansion of an existing project, other than a
co-production project, does not begin before the application for
approval under this section is approved by the commission;
provided, however, nothing herein shall require commission
approval of a co-production project prior to commencing active
operations on such project in order for such project to be
eligible for the recovered oil tax rate.
(d) An applicant for commission approval of a co-production
project shall submit a written application for approval to the
commission. Such application must be filed before January 1,
1994. The applicant shall provide the commission with any
relevant information required to administer this section,
including evidence demonstrating that the reservoir is eligible
for the designation and demonstrating the minimum volumes of
high-volume water withdrawal required to recover oil and/or gas
from the reservoir that would not be produced by conventional
production methods. A commission representative may
administratively approve the application. If the commission
representative denies administrative approval, the applicant
shall have the right to a hearing upon request.
(e) If the commission approves an enhanced recovery project or
an expansion under this section, it shall issue a certification
of approval for an approved project designating the area to be
affected by the project.
(f) The recovered oil tax rate applies only to oil produced from
a new enhanced oil recovery project, any co-production project,
or the incremental production caused by the expansion of an
existing enhanced recovery project from the area the commission
certifies to be affected by the project.
(g) Subject to the provisions of Subsections (b) and (h) of this
section, the recovered oil tax rate applies to oil on which a tax
is imposed by this chapter for the 10 years beginning the first
day of the month following the date the commission certifies
that, in the case of an enhanced recovery project including a
co-production project, a positive production response has
occurred or, in the case of an expansion, other than related to a
co-production project, incremental production has occurred, if
the application for certification is filed:
(1) not later than three years from the date the commission
approves the project if the project is designated as a new or
existing project other than a co-production project that uses a
secondary recovery process; or
(2) not later than five years from the date the commission
approves the project if the project is designated as a new or
existing project that uses a tertiary recovery process or is a
co-production project.
(h) The operator may designate the certification date, subject
to commission approval. If the commission determines that the
project has caused a positive production response or incremental
production, the commission shall certify that fact.
(i) Notwithstanding Subsection (g) of this section,
qualification for the recovered oil tax rate ends on the first
day of the first calendar month that begins on or after the 91st
day following the date of termination of the active operation of
the enhanced recovery project or of termination of an approved
expansion.
(j) If the active operation of an approved enhanced recovery
project or expansion is terminated, the person who immediately
before the termination is the operator of the project shall
notify the commission and the comptroller in writing not later
than the 30th day after the last day of active operation. Any
person who violates this subsection is liable to the state for a
civil penalty if the person pays or attempts to pay the tax
imposed by this chapter on oil from the project at the recovered
oil tax rate after qualification for that rate ends under
Subsection (g) or (i) of this section. 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.
(k) The attorney general may recover a penalty under Subsection
(j) of this section in a suit brought on behalf of the state.
Venue for the suit is in Travis County.
(l) The commission has broad discretion in administering this
section and shall adopt and enforce any appropriate rules or
orders that the commission finds necessary to administer this
section concerning the designation, operation, and termination of
enhanced recovery projects and expansions. The commission shall
notify the comptroller of any action taken under this subsection.
The comptroller shall have the power to establish procedures in
order to comply with this Act.
(m) Subject to the provisions of Subsection (b) of this section,
if , before the comptroller approves an application for taxation
at the recovered oil tax rate, the tax imposed by this chapter is
paid at the rate provided by Section 202.052(a) of this code on
oil that qualifies under this section for the recovered oil tax
rate, the producer or producers of the oil are entitled to a
credit against taxes imposed by this chapter in an amount equal
to the difference between the tax paid on the oil and the tax due
on the oil at the recovered oil tax rate. The credit is allocated
to each producer according to the producer's proportionate share
in the oil. To receive a credit, one or more of the producers of
the oil must apply to the comptroller for the credit not later
than the first anniversary after the date the commission
certifies that a positive production response has occurred.
(n) To qualify for the taxation of oil at the recovered oil tax
rate, a person responsible for paying the tax must apply to the
comptroller. The application must include the certification of
the commission that the project or expansion has been approved
and that the project has resulted in a positive production
response or that the expansion has resulted in incremental
production. The comptroller shall approve the application of a
person who demonstrates that the oil is eligible for taxation at
the recovered oil tax rate. The comptroller may require a person
applying for the recovered oil tax rate to provide any relevant
information in the person's monthly report and internal records
that the comptroller considers necessary to administer this
section. The commission shall notify the comptroller in writing
immediately if it determines that active operation of an approved
enhanced recovery project or an approved expansion has been
terminated or if it takes any action or discovers any information
that affects the taxation of oil at the recovered oil tax rate.
Added by Acts 1989, 71st Leg., ch. 795, Sec. 2, eff. Sept. 1,
1989. Amended by Acts 1991, 72nd Leg., ch. 604, Sec. 2, eff.
Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 335, Sec. 1, 2, eff.
Jan. 1, 1994; Acts 1993, 73rd Leg., ch. 958, Sec. 2, eff. Sept.
1, 1993; Acts 1997, 75th Leg., ch. 931, Sec. 1, 2, eff. Sept. 1,
1997; Acts 2003, 78th Leg., ch. 209, Sec. 53, eff. Oct. 1, 2003.
Sec. 202.0545. TAX EXEMPTION FOR ENHANCED RECOVERY PROJECTS
USING ANTHROPOGENIC CARBON DIOXIDE. (a) Subject to the
limitations provided by this section, until the 30th anniversary
of the date that the comptroller first approves an application
for a tax rate reduction under this section, the producer of oil
recovered through an enhanced oil recovery project that qualifies
under Section 202.054 for the recovered oil tax rate provided by
Section 202.052(b) is entitled to an additional 50 percent
reduction in that tax rate if in the recovery of the oil the
enhanced oil recovery project uses carbon dioxide that:
(1) is captured from an anthropogenic source in this state;
(2) would otherwise be released into the atmosphere as
industrial emissions;
(3) is measurable at the source of capture; and
(4) is sequestered in one or more geological formations in this
state following the enhanced oil recovery process.
(b) In the event that a portion of the carbon dioxide used in
the enhanced oil recovery project is anthropogenic carbon dioxide
that satisfies the criteria of Subsection (a) and a portion of
the carbon dioxide used in the project fails to satisfy the
criteria of Subsection (a) because it is not anthropogenic, the
tax reduction provided by Subsection (a) shall be reduced to
reflect the proportion of the carbon dioxide used in the project
that satisfies the criteria of Subsection (a).
(c) To qualify for the tax rate reduction under this section,
the operator must:
(1) apply to the comptroller for the reduction and include with
the application any information and documentation that the
comptroller may require; and
(2) apply for a certification from:
(A) the Railroad Commission of Texas, if carbon dioxide used in
the project is to be sequestered in an oil or natural gas
reservoir;
(B) the Texas Commission on Environmental Quality, if carbon
dioxide used in the project is to be sequestered in a geological
formation other than an oil or natural gas reservoir; or
(C) both the Railroad Commission of Texas and the Texas
Commission on Environmental Quality if both Paragraphs (A) and
(B) apply.
(d) An agency to which an operator applies for a certification
under Subsection (c)(2) may issue the certification only if the
agency finds that, based on substantial evidence, there is a
reasonable expectation that:
(1) at least 99 percent of the carbon dioxide sequestered as
required by Subsection (a)(4) will remain sequestered for at
least 1,000 years; and
(2) the operator's planned sequestration program will include
appropriately designed monitoring and verification measures that
will be employed for a period sufficient to demonstrate whether
the sequestration program is performing as expected.
(e) The tax rate reduction does not apply if the operator's
sequestration program or the operator's monitoring and
verification measures differ substantially from the planned
program described by Subsection (d), and the operator shall
refund the difference between the amount of the tax paid under
this section and the amount that would have been imposed in the
absence of this section.
(f) The comptroller shall approve the application if the
operator submits the certification or certifications required by
Subsection (c)(2) and if the comptroller determines that the oil
is otherwise eligible under this section.
(g) If, before the comptroller approves an application for the
tax rate reduction under this section, the tax imposed by this
chapter is paid at the rate provided by Section 202.052(a) or (b)
on oil that qualifies under this section, the producer or
producers of the oil are entitled to a credit against taxes
imposed by this chapter in an amount equal to the difference
between the tax paid on the oil and the tax due on the oil after
the rate reduction under this section is applied. The credit is
allowed to each producer according to the producer's
proportionate share in the oil. To receive a credit, one or more
of the producers of the oil must apply to the comptroller for the
credit not later than the first anniversary of the date the oil
is produced.
(h) The comptroller, the Railroad Commission of Texas, and the
Texas Commission on Environmental Quality may adopt rules and
establish procedures to implement and administer this section.
Added by Acts 2007, 80th Leg., R.S., Ch.
1277, Sec. 9, eff. September 1, 2007.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1109, Sec. 5, eff. September 1, 2009.
Sec. 202.056. EXEMPTION FOR OIL AND GAS FROM WELLS PREVIOUSLY
INACTIVE. (a) In this section:
(1) "Commission" means the Railroad Commission of Texas.
(2) "Hydrocarbons" means any oil or gas produced from a well,
including hydrocarbon production.
(3) "Three-year inactive well" means any well that has not
produced in more than one month in the three years prior to the
date of application for severance tax exemption under this
section.
(4) "Two-year inactive well" means a well that has not produced
oil or gas in more than one month in the two years preceding the
date of application for severance tax exemption under this
section.
(b) Hydrocarbons produced from a well qualify for a 10-year
severance tax exemption if the commission designates the well as
a three-year inactive well or a two-year inactive well. The
commission may require an applicant to provide the commission
with any relevant information required to administer this
section. The commission may require additional well tests to
determine well capability as it deems necessary. The commission
shall notify the comptroller in writing immediately if it
determines that the operation of the three-year inactive well or
two-year inactive well has been terminated or if it discovers any
information that affects the taxation of the production from the
designated well.
(c) If the commission designates a three-year inactive well
under this section, it shall issue a certificate designating the
well as a three-year inactive well as defined by Subsection
(a)(3) of this section. The commission may not designate a
three-year inactive well under this section after February 29,
1996. If the commission designates a two-year inactive well under
this section, it shall issue a certificate designating the well
as a two-year inactive well as defined by Subsection (a)(4) of
this section. The commission may not designate a two-year
inactive well under this section after February 28, 2010.
(d) An application for three-year inactive well certification
shall be made during the period of September 1, 1993, through
August 31, 1995, to qualify for the tax exemption under this
section. An application for two-year inactive well certification
shall be made during the period September 1, 1997, through August
31, 2009, to qualify for the tax exemption under this section.
Hydrocarbons sold after the date of certification are eligible
for the tax exemption.
(e) The commission may revoke a certificate if information
indicates that a certified well was not a three-year inactive
well or a two-year inactive well, as appropriate, or if other
lease production is credited to the certified well. Upon notice
to the operator from the commission that the certificate for tax
exemption under this section has been revoked, the tax exemption
may not be applied to hydrocarbons sold from that well from the
date of revocation.
(f) The commission shall adopt all necessary rules to administer
this section.
(g) To qualify for the tax exemption provided by this section,
the person responsible for paying the tax must apply to the
comptroller. The comptroller shall approve the application of a
person who 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
shall have the power to establish procedures in order to comply
with this section.
(h) If the tax is paid at the full rate provided by Section
201.052(a), 201.052(b), 202.052(a), or 202.052(b) before the
comptroller approves an application for an exemption provided for
in this chapter, the operator is entitled to a credit against
taxes imposed by this chapter in an amount equal to the tax paid.
To receive a credit, the operator must apply to the comptroller
for the credit before the expiration of the applicable period for
filing a tax refund claim under Section 111.104.
(i) Penalties
(1) Any person who makes or subscribes any 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 false
or untrue in a material fact, may be subject to the penalties
imposed by Chapters 85 and 91, Natural Resources Code.
(2) Upon notice from the commission that the certification for a
three-year inactive well or a two-year inactive well has been
revoked, the tax exemption shall not apply to oil or gas
production sold after the date of notification. Any person who
violates this subsection is liable to the state for a civil
penalty if the person applies or attempts to apply the tax
exemption allowed by this chapter after the certification for a
three-year inactive well or a two-year inactive well is revoked.
The amount of the penalty may not exceed the sum of:
(A) $10,000; and
(B) the difference between the amount of taxes paid or attempted
to be paid and the amount of taxes due.
(3) The attorney general may recover a penalty under Subdivision
(2) of this subsection in a suit brought on behalf of the state.
Venue for the suit is in Travis County.
Added by Acts 1993, 73rd Leg., ch. 1015, Sec. 3, eff. Sept. 1,
1993. Amended by Acts 1997, 75th Leg., ch. 208, Sec. 1 to 3, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 365, Sec. 2, eff. Aug.
30, 1999; Acts 1999, 76th Leg., ch. 893, Sec. 1, eff. June 18,
1999.
Sec. 202.057. TAX CREDIT FOR INCREMENTAL PRODUCTION TECHNIQUES.
(a) In this section:
(1) "Baseline production" means a lease's average monthly
production during the four highest months of production in the
time period from January 1, 1996, through December 31, 1996.
(2) "Commission" means the Railroad Commission of Texas.
(3) "Incremental production" means production from a qualifying
lease in excess of the baseline production.
(4) "Incremental production technique" means any secondary or
tertiary production enhancement technique. For wells in primary
production, the use of incremental production techniques means
that an expenditure of at least $5,000 must have been made to
cause increased production. Operators must certify to the
commission that such expenditure has been made to qualify for the
tax exemption. The incremental production techniques listed in
this subdivision must cause incremental production from an
existing oil lease or from a newly drilled single-completion well
on an existing lease.
(5) "Incremental ratio" means the amount of a qualifying lease's
average monthly incremental production during the four-month
period used to meet the definition of a qualifying lease divided
by its average monthly total production during the same
four-month period.
(6) "Qualifying lease" means a commission-designated oil lease
whose production during the four-month period used in computing
the baseline is no more than seven barrels of oil equivalents per
day per well, excluding gas flared pursuant to the rules of the
commission, and which has shown incremental production for four
of five consecutive months on or after September 1, 1997, and
after performing an incremental production technique within the
lease. For purposes of qualifying a lease, production per well
per day is measured by dividing the sum of lease production
during the four highest months of production in the baseline
period by the sum of the number of well-days, where a well-day is
one well producing for one day.
(7) "Qualified incremental production" means the lease's monthly
total production multiplied by the incremental ratio.
(b) An operator of a qualifying lease is entitled to a 50
percent tax exemption on that lease's qualified incremental
production for five years provided that:
(1) the incremental production required to define a qualifying
lease occurred after September 1, 1997, and before December 31,
1998;
(2) the operator of a qualifying lease applies to the commission
for a determination of a lease's incremental ratio before
February 11, 1999; and
(3) the operator provides to the comptroller a
commission-certified incremental ratio.
(c) If the comptroller's average taxable price of crude oil
reaches $25 per barrel, adjusted to 1997 dollars, for three
consecutive months, the tax credit under this section shall be
suspended until the price drops below $25 per barrel, adjusted to
1997 dollars, for three consecutive months.
(d) If the tax is paid at the full rate provided by Section
201.052(a) or (b) or Section 202.052(a) or (b) before the
comptroller approves an application for an exemption provided in
this chapter, the operator is entitled to a credit against taxes
imposed by this chapter in an amount equal to 50 percent of the
tax paid on the incremental production. To receive the credit,
the operator must apply to the comptroller for the credit not
later than the first anniversary after the date the commission
certifies the incremental ratio for a qualifying lease.
(e) The commission may enact rules necessary to administer the
provisions of this section.
Added by Acts 1997, 75th Leg., ch. 1060, Sec. 2, eff. Sept. 1,
1997.
Subsec. (h) of this section provided for the expiration of the
section on Sept. 1, 2007. Subsec. (h) was repealed by Acts 2007,
80th Leg., R.S., Ch.
911, Sec. 4, which was effective January 1, 2008, after the
section had expired.
Sec. 202.058. CREDITS FOR QUALIFYING LOW-PRODUCING OIL LEASES.
(a) In this section:
(1) "Commission" means the Railroad Commission of Texas.
(2) "Qualifying low-producing oil lease" means a well classified
as an oil well that is part of a lease whose production during a
90-day period is less than:
(A) 15 barrels of oil per day of production; or
(B) five percent recoverable oil per barrel of produced water.
(b) For purposes of qualifying a lease, production per well per
day is determined by computing the average daily per well
production from the lease using the monthly lease production
report made to the commission. For purposes of qualifying a
lease, production per well per day is measured by dividing the
sum of lease production during the three-month period by the sum
of the number of well-days, where a well-day is one well
producing for one day. The operator of a lease that is eligible
for a credit under this section only on the basis of Subsection
(a)(2)(B) must pay to the comptroller a filing fee of $100 before
the comptroller may authorize the credit.
(c) Each month, the comptroller shall certify the average
taxable price of oil, adjusted to 2005 dollars, during the
previous three months based on various price indices available to
producers, including the reported Texas Panhandle Spot Price,
West Texas Intermediate Crude Spot Price, New York Mercantile
Exchange, or other spot prices, as applicable. The comptroller
shall publish certifications under this subsection in the Texas
Register.
(d) An operator of a qualifying low-producing lease is entitled
to a 25 percent credit on the tax otherwise due on oil produced
from that lease during a month if the average taxable price of
oil certified by the comptroller under Subsection (c) for the
previous three-month period is more than $25 per barrel but not
more than $30 per barrel.
(e) An operator of a qualifying low-producing lease is entitled
to a 50 percent credit on the tax otherwise due on oil produced
from that lease during a month if the average taxable price of
oil certified by the comptroller under Subsection (c) for the
previous three-month period is more than $22 per barrel but not
more than $25 per barrel.
(f) An operator of a qualifying low-producing lease is entitled
to a 100 percent credit on the tax otherwise due on oil produced
from that lease during a month if the average taxable price of
oil certified by the comptroller under Subsection (c) for the
previous three-month period is not more than $22 per barrel.
(g) If the tax is paid on oil at the full rate provided by
Section 202.052, the person paying the tax is entitled to a
credit against taxes imposed by this chapter or Chapter 201 on
the amount overpaid. To receive the credit, the person must
apply to the comptroller for the credit not later than the
expiration of the applicable period for filing a tax refund under
Section 111.104.
Subsec. (h) was repealed by Acts 2007, 80th Leg., R.S., Ch.
911, Sec. 4. The effective date of the repeal was January 1,
2008, which was after the expiration of the section.
(h) This section expires September 1, 2007.
(h) Repealed by Acts 2007, 80th Leg., R.S., Ch. 911, Sec. 4,
eff. January 1, 2008.
Added by Acts 2005, 79th Leg., Ch.
267, Sec. 12, eff. September 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
911, Sec. 4, eff. January 1, 2008.
Sec. 202.059. EXEMPTION FOR HYDROCARBONS FROM TERRA WELLS. (a)
Hydrocarbons produced from a well subject to an agreement under
Chapter 93, Natural Resources Code, and under a license issued
under that chapter qualify for an exemption from the taxes
imposed by this chapter and Chapter 201 if the comptroller
approves the tax exemption under Subsection (g).
(b) Hydrocarbons produced from a well formerly subject to an
agreement under Chapter 93, Natural Resources Code, and a license
issued under that chapter resuming production after participation
in TERRA for two years qualify for an exemption from the taxes
imposed by this chapter and Chapter 201 if the comptroller
approves the tax exemption under Subsection (g).
(c) The commission may certify a well eligible for a tax
exemption or an application may be made to the commission for
certification under this section. The commission may require an
applicant to provide the commission with any relevant information
required to administer this section. The commission shall issue a
certificate to each operator of the well. The certificate must:
(1) include identification of the well; and
(2) state the date on which the tax exemption takes effect,
subject to the comptroller's approval of the exemption under
Subsection (g).
(d) The commission shall furnish to the comptroller a copy of a
certificate of exemption for each well qualifying under this
section.
(e) The commission may revoke a certificate for a tax exemption
if information indicates that a well was not eligible for that
designation at the time of certification or if a license issued
under Chapter 93, Natural Resources Code, is revoked by the
commission. The commission shall notify the operator and the
comptroller that a certificate has been revoked. A tax exemption
granted under this section is automatically revoked on the date
the certificate is revoked, and hydrocarbons produced from the
well after the date of revocation are not eligible for the tax
exemption.
(f) The commission may adopt and enforce any rules or orders
that the commission finds necessary to administer this section.
(g) To qualify for the tax exemption, the person responsible for
paying the tax must apply to the comptroller for the exemption
and include with the application the certificate issued by the
commission under Subsection (c). The comptroller shall approve
the application of a person if the hydrocarbons are eligible for
the 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 subsection and
Subsection (h).
(h) If the tax is paid at the full rate provided by this chapter
and Chapter 201 on hydrocarbons produced on or after the
effective date of the tax exemption but before the date the
comptroller approves an application for the tax exemption, the
operator is entitled to a credit on taxes due under Chapter 201
or this chapter in the amount equal to the tax paid during that
period. To receive a credit, the operator must apply to the
comptroller for the credit not later than one year after the date
the commission certifies the well for a tax exemption.
(i) A person is subject to the penalties that may be imposed
under Chapters 85 and 91, Natural Resources Code, if the person
makes and submits to the commission or comptroller an
application, report, or other document used or intended to be
used for a certification, tax exemption, or tax credit under this
section and the person knows that the application, report, or
other document contains a false or untrue material fact.
(j) A person is liable to the state for a civil penalty if the
person, after receiving notice from the commission that the
person's tax exemption certificate for a TERRA well or a former
TERRA well has been revoked, applies or attempts to apply for a
tax exemption for hydrocarbons produced from the well under the
revoked certificate. 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.
(k) The attorney general may recover a penalty under Subsection
(j) in a suit brought on behalf of the state. Venue for the suit
is in Travis County.
(l) In this section:
(1) "Commission" means the Railroad Commission of Texas.
(2) "Hydrocarbons" means any oil, gas, condensate, and other
liquid hydrocarbons produced from a well.
(3) "TERRA" means the Texas Experimental Research and Recovery
Activity under Chapter 93, Natural Resources Code.
Added by Acts 1995, 74th Leg., ch. 989, Sec. 5, eff. Jan. 1,
1996.
Sec. 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,
Natural Resources Code.
(b) The commission shall issue a certificate to a person who is
designated by the commission under Section 89.047, 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 and 91, 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.
Added by Acts 2005, 79th Leg., Ch.
267, Sec. 12, eff. January 1, 2006.
Sec. 202.061. TAX CREDIT FOR ENHANCED EFFICIENCY EQUIPMENT. (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;
(3) the taxpayer must file an application with the comptroller
for the credit and must demonstrate to the comptroller that the
enhanced efficiency equipment has been purchased and installed in
the marginal well within the period prescribed by Subdivision
(2);
(4) the number of applications the comptroller may approve each
state fiscal year may not exceed a number equal to one percent of
the producing marginal wells in this state on September 1 of that
state fiscal year, as determined by the comptroller; and
(5) the manufacturer of the enhanced efficiency equipment must
obtain an evaluation of the product under Subsection (a).
(c) The taxpayer may carry any unused credit forward until the
credit is used.
Added by Acts 2005, 79th Leg., Ch.
267, Sec. 12, eff. September 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
931, Sec. 19, eff. September 1, 2007.
Sec. 202.063. EXEMPTION OF OIL INCIDENTALLY PRODUCED IN
ASSOCIATION WITH THE PRODUCTION OF GEOTHERMAL ENERGY. Oil
incidentally produced in association with the production of
geothermal energy is not subject to the tax imposed by this
chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
1036, Sec. 2, eff. September 1, 2009.
SUBCHAPTER C. RECORDS
Sec. 202.101. PRODUCER'S RECORDS. A producer shall keep
accurate records in the state. The records must show:
(1) the counties in which the producer produces oil;
(2) the names of the leases from which the producer produces
oil;
(3) the total number of barrels of oil produced from each lease;
(4) for each sale or delivery to a first purchaser, the name and
address of the first purchaser, the number of barrels sold or
delivered, and the price received for the oil;
(5) the amount and disposition of oil refined, processed, or
used on the lease where it is produced;
(6) the location and number of barrels in storage that the
producer owns and has not sold; and
(7) the name and address of each pipeline or refinery that is
storing oil that the producer has not sold.
Acts 1981, 67th Leg., p. 1737, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.102. FIRST PURCHASER'S RECORDS. A first purchaser
shall keep accurate records in the state. The records must show:
(1) the name and address of each producer from which the first
purchaser buys oil;
(2) for each producer, the counties where the oil is produced;
(3) for each producer, the name of the lease from which the oil
is produced;
(4) the number of barrels of oil purchased from each producer
and the price paid each producer for the oil;
(5) the number of barrels purchased and used, refined, or
processed by the first purchaser; and
(6) for each sale to a subsequent purchaser, the name and
address of the subsequent purchaser, the number of barrels sold,
and the price received for the oil.
Acts 1981, 67th Leg., p. 1738, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.103. SUBSEQUENT PURCHASER'S RECORDS. A subsequent
purchaser shall keep accurate records in the state. The records
must show:
(1) the name and address of each person who sells oil to the
subsequent purchaser, the number of barrels sold, the price paid
to each seller, and the date of each sale;
(2) the disposition of all oil purchased by the subsequent
purchaser;
(3) the number of barrels of oil used, refined, or processed by
the subsequent purchaser; and
(4) the name and address of each person who buys oil from the
subsequent purchaser, the number of barrels sold or delivered to
each buyer, the price received for the oil from each buyer, and
the date of the sale or delivery.
Acts 1981, 67th Leg., p. 1738, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.104. ROYALTY OWNER'S RECORDS. The owner of a royalty
interest shall keep:
(1) a record of all money received as royalty from each
producing leasehold in the state; and
(2) a copy of all settlement sheets furnished by a purchaser or
operator or other statement showing the number of barrels of oil
for which a royalty was received and the amount of tax deducted.
Acts 1981, 67th Leg., p. 1738, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.105. CARRIER'S RECORDS. A carrier shall keep accurate
monthly records of oil the carrier transports for hire, for
itself or for its owners. The records shall be kept within the
state and must show, for each shipment:
(1) the date the oil was received;
(2) the number of barrels of oil received;
(3) the person from whom the oil was received;
(4) the point of delivery;
(5) the person to whom the oil was delivered; and
(6) the manner of transportation.
Acts 1981, 67th Leg., p. 1738, ch. 389, Sec. 1, eff. Jan. 1,
1982.
SUBCHAPTER D. PAYMENTS
Sec. 202.151. TAX DUE. The tax imposed by this chapter is due
at the office of the comptroller on the 25th day of each calendar
month for oil produced during the preceding calendar month.
Acts 1981, 67th Leg., p. 1739, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.152. PAYMENT OF TAX. The tax imposed by this chapter
must be paid by legal tender or cashier's check payable to the
comptroller.
Acts 1981, 67th Leg., p. 1739, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.121,
eff. Sept. 1, 1997.
Sec. 202.153. FIRST PURCHASER TO PAY TAX. (a) A first
purchaser shall pay the tax imposed by this chapter on oil that
the first purchaser purchases from a producer and takes delivery
on the premises where the oil is produced.
(b) A first purchaser shall withhold from payments to the
producer the amount of tax that the first purchaser is required
by Subsection (a) of this section to pay. This subsection does
not affect a lease or contract between the state or a political
subdivision of the state and a producer.
Acts 1981, 67th Leg., p. 1739, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.154. PRODUCER TO PAY TAX ON OIL NOT SOLD. If the
producer does not sell oil produced in the same month it is
produced, the producer shall pay the tax imposed by this chapter
as if the oil were sold that month. In such a case, the working
interest operator may pay the tax and deduct it from the interest
of other interest holders.
Acts 1981, 67th Leg., p. 1739, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.155. PURCHASER TO PAY TAX ON OIL FROM PROPERTY UNDER
LEGAL CONSTRAINT. (a) A purchaser shall pay the tax imposed by
this chapter on oil purchased from property in bankruptcy,
receivership, covered by an assignment, or subject to a legal
proceeding.
(b) The purchaser shall withhold the amount of tax required to
be paid by Subsection (a) of this section from payments to the
producer, trustee, assignee, or other person claiming the
payments and from payments the purchaser impounds or places in
escrow.
(c) The purchaser is not liable for the amount of tax paid as
required by this section to any claimant of payments for the
purchase of oil.
Acts 1981, 67th Leg., p. 1739, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.156. TAX BORNE RATABLY. The tax shall be borne ratably
by all interested parties, including royalty interests. Producers
or purchasers of oil, or both, are authorized and required to
withhold from any payment due interested parties the
proportionate amount of tax due.
Acts 1981, 67th Leg., p. 1739, ch. 389, Sec. 1, eff. Jan. 1,
1982.
SUBCHAPTER E. REPORTS
Sec. 202.201. PRODUCER'S REPORT. (a) A producer authorized by
the comptroller to remit the tax due shall file with the
comptroller, on or before the 25th day of each calendar month,
the report under this subsection and, as applicable, the report
under Subsection (d) showing the total oil produced, used, lost
or stolen, or possessed and otherwise unaccounted for by the
producer during the preceding calendar month. The report under
this subsection must show:
(1) the number of barrels of oil produced from each lease;
(2) each county in which each lease from which oil was produced
is located;
(3) the name, address, and taxpayer identification number
assigned by the comptroller of each first purchaser of oil and
for each the amount of oil purchased from each lease;
(4) the payment received for the oil from each first purchaser
from each lease from which oil was produced;
(5) the name and lease identification number of each lease from
which the oil was produced; and
(6) other information the comptroller may reasonably require.
(b) If the report the producer is required to file shows
additional tax due, the producer must pay the additional tax when
he files the report.
(c) A producer whose only sales are to a purchaser who remits
the tax due under Section 202.153 is not required to file a
report on the oil sold.
(d) A producer shall file a crude oil special tax report with
the comptroller and pay the applicable tax imposed under this
chapter if any oil has been used, lost or stolen, or possessed
and otherwise unaccounted for by the producer after it has been
produced and measured. The producer must file the report on or
before the 25th day of the month following the month in which the
oil is used, lost or stolen, or possessed and otherwise
unaccounted for. The report must show:
(1) the total number of barrels of oil used, lost or stolen, or
possessed and otherwise unaccounted for by the producer;
(2) where the oil was used, lost or stolen, or possessed and
otherwise unaccounted for; and
(3) other information the comptroller may reasonably require.
(e) A producer that is no longer in business shall notify the
comptroller of this fact on or before the 25th day of the first
month following the producer's last day of business.
Acts 1981, 67th Leg., p. 1740, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1983, 68th Leg., p. 1375, ch. 284, Sec. 2,
eff. Sept. 1, 1983; Acts 1993, 73rd Leg., ch. 587, Sec. 34, eff.
Jan. 1, 1994; Acts 1997, 75th Leg., ch. 1040, Sec. 55, eff. Jan.
1, 1998; Acts 1999, 76th Leg., ch. 1183, Sec. 4, eff. Sept. 1,
2001.
Sec. 202.202. FIRST PURCHASER'S REPORT. (a) On or before the
25th day of each calendar month, each first purchaser or his
authorized agent shall file a report with the comptroller. The
report must contain the following information concerning oil
purchased from a producer during the preceding calendar month:
(1) the number of barrels of oil purchased from each lease for
each producer;
(2) the amount paid to each producer for each lease from which
oil was purchased;
(3) the name and address of each producer;
(4) each county in which each lease from which the purchased oil
was produced is located;
(5) the name and lease identification number of each lease from
which the purchased oil was produced; and
(6) other information the comptroller may reasonably require.
(b) If the report the first purchaser is required to file shows
additional tax due, the first purchaser must pay the additional
tax when he files the report.
Acts 1981, 67th Leg., p. 1740, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1983, 68th Leg., p. 1376, ch. 284, Sec. 3,
eff. Sept. 1, 1983; Acts 1997, 75th Leg., ch. 1040, Sec. 56, eff.
Jan. 1, 1998; Acts 1999, 76th Leg., ch. 1183, Sec. 5, eff. Sept.
1, 2001.
Sec. 202.204. REPORTS OF CARRIER. A carrier shall provide
information and file reports on the movements of oil if requested
by the comptroller as often as required by the comptroller.
Acts 1981, 67th Leg., p. 1740, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 202.205. TRANSFER OF OWNERSHIP. (a) If an oil-producing
lease is transferred, or is to be transferred, the producer
transferring the lease shall note the name and address of the
producer acquiring the lease and the date of the transfer on the
last report covering the lease that he is required by Section
202.201 of this code to file.
(b) If an oil-producing lease is transferred, the producer
acquiring the lease shall note the date of the transfer and the
name and address of the person from whom the lease was acquired
on the first report covering the lease that he is required by
Secti