HBA-SEB S.B. 792 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 792 By: Nixon, Drew Energy Resources 5/10/1999 Engrossed BACKGROUND AND PURPOSE Currently, there is some question as to whether companies that pay the proceeds from the sale of gas are required to provide certain information that would be useful to the payee for payment of federal taxes. Many companies already provide this information, but no definite requirement exists. S.B. 792 would require a payor of proceeds from the sale of gas to provide a statement with the information necessary to compute the federal income tax credit for the gas for which payment was made in the preceding year. This bill provides that the information must include identifying information about the lease, property, or well and the volume of gas measured. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter J, Chapter 91, Natural Resources Code, by adding Section 91.408, as follows: Sec. 91.408. INFORMATION FOR PAYEES OF PROCEEDS OF PRODUCTION FROM CERTAIN GAS WELLS. Requires a payor of the proceeds from the sale of gas produced from a tight formation as defined by Section 29(c)(2)(B), Internal Revenue Code of 1986, to annually furnish the payee a statement providing the information necessary to compute the federal income tax credit provided by that section for the gas for which payment was made in the preceding year. Establishes that this information includes identifying information about the lease, property, or well and the volume of gas measured. SECTION 2. Requires the statement described by Section 91.408, Natural Resources Code, as added by this Act, to be furnished no later than March 15. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.