Madam Speaker, at the request of the Secretary of State of the State of Texas, I am officially entering House Concurrent Resolution 183, as passed by the 81st Legislature, Regular Session, 2009, of…
Madam Speaker, at the request of the Secretary of State of the State of Texas, I am officially entering House Concurrent Resolution 183, as passed by the 81st Legislature, Regular Session, 2009, of the State of Texas, into the Congressional Record.
House Concurrent Resolution
Whereas, The oil and natural gas exploration industry has
been a significant part of the state's economy since the
early 20th century; today, Texas is the leading producing
state for oil and natural gas in the country, accounting for
21.3 percent and 27.8 percent of total U.S. production,
respectively; and
Whereas, Texas producers provide more than 200,000 jobs for
Texas citizens, with an average pay that is almost three
times higher than the average paid by all other industries;
during fiscal year 2008, Texas producers paid over $5 billion
in taxes and fees to the state's general revenue fund; and
Whereas, Natural gas is a highly valued, clean fuel that
has become a mainstay of electricity production and other
industrial operations in Texas, while oil continues to
constitute the backbone of the state's industrial sector and
fuels virtually all of the state's transportation system; and
Whereas, Renewable energy sources offer great promise for
Texas' long-term energy needs, but the technology that would
make
these sources abundant is in its infancy, and until that
technology is adequately developed, renewable energy sources
will remain dispersed and unable to deliver base load
capacity; and
Whereas, Conservation can help satisfy the state's energy
needs, and action to reduce customer demand is the quickest
way to meet energy needs in the short term, but a growing
economy and population will require more energy than can be
saved through more efficient energy use; and
Whereas, To keep pace with increased demand, independent
producers completed more than 11,000 wells in Texas in 2008,
and in the two-year period 2007-2008, they increased the
production of natural gas in Texas by more than 12 percent;
and
Whereas, In addition to generating high-quality jobs,
independent producers help to reduce America's dependence on
Middle East oil by exploring for domestic resources and
providing stable supplies of cost-effective energy to
consumers; and
Whereas, Independent producers rely on longstanding tax
provisions to plan their activities and to explore for new
wells to offset declining production from older ones; without
the development of new wells, energy supplies would decline
and the costs to consumers would rise; and
Whereas, President Barack Obama's initial budget includes
provisions deleting the intangible drilling costs deduction,
percentage depletion allowance, geologic and geophysical
costs deduction, and domestic production activities
deduction, and the elimination of these provisions would
cripple this state's energy jobs, reduce small businesses'
access to capital, and harm royalty owners; and
Whereas, Intangible drilling costs (IDCs) typically include
expenditures for physical items with no salvage value, as
well as other costs associated with preparing and completing
a well for the production of oil, gas, or geothermal steam or
water; producers have long been able to deduct IDCs as
current business expenses, rather than depreciate or amortize
them over the life of the well; IDCs are actually similar to
research and development costs, for which most
manufacturing businesses are able to take a tax credit,
rather than a deduction; and
Whereas, The percentage depletion allowance, also known as
the small producers exemption, was created in the 1920s to
encourage oil and natural gas exploration, which is an
inherently high-risk venture; the exemption is available only
to the smallest producers and allows them to deduct 15
percent of their gross income from oil and gas properties;
and
Whereas, Geologic and geophysical (G&G) costs relate to the
surveys that producers conduct or commission in order to
locate and develop oil and natural gas reserves and to
minimize unnecessary drilling; G&G costs may be amortized
over the first 24 months of the life of a well; and
Whereas, The domestic production activities provision
allows businesses a tax deduction for qualified production
activities that are based in the United States; the deduction
helps to preserve American jobs and American small
businesses; and
Whereas, Major integrated companies are not eligible for
the IDC deduction, percentage depletion allowance, or
domestic production activities deduction, and they are
subject to a seven-year amortization schedule for G&G work;
consequently, ``big oil'' is not impacted by the proposed
budget changes; and
Whereas, President Obama has stated his intention to
support the development of jobs, promote the use of clean-
burning energy, and reduce America's dependence on foreign
oil, yet his budget proposals would lessen the ability of
independent producers to help meet those three goals: Now,
therefore, be it
Resolved, That the 81st Legislature of the State of Texas
hereby respectfully urge the United States Congress to reject
the provisions of President Barack Obama's budget that would
eliminate the intangible drilling costs deduction, percentage
depletion allowance, geologic and geophysical costs
deduction, and domestic production activities deduction and
to encourage instead the development of Texas oil and natural
gas; and, be it further
Resolved, That the Texas secretary of state forward
official copies of this resolution to the president of the
United States, to the speaker of the house of representatives
and the president of the senate of the United States
Congress, and to all the members of the Texas delegation to
Congress with the request that this resolution be officially
entered in the Congressional Record as a memorial to the
Congress of the United States of America.
David Dewhurst,
President of the Senate.
Joe Straus,
Speaker of the House.
Robert Haney,
Chief Clerk of the House.
Patsy Span,
Secretary of the Senate.
Approved: Rick Perry, Governor.
