| 1 | A bill to be entitled |
| 2 | An act relating to oil and gas production taxes; amending |
| 3 | s. 211.02, F.S.; providing a tiered tax rate structure for |
| 4 | the oil production tax on tertiary oil; revising |
| 5 | definitions; providing an effective date. |
| 6 |
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| 7 | Be It Enacted by the Legislature of the State of Florida: |
| 8 |
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| 9 | Section 1. Section 211.02, Florida Statutes, is amended to |
| 10 | read: |
| 11 | 211.02 Oil production tax; basis and rate of tax; tertiary |
| 12 | oil.--An excise tax is hereby levied upon every person who |
| 13 | severs oil in the state for sale, transport, storage, profit, or |
| 14 | commercial use. Except as otherwise provided in this part, the |
| 15 | tax is levied on the basis of the entire production of oil in |
| 16 | this state, including any royalty interest. Such tax shall |
| 17 | accrue at the time the oil is severed and shall be a lien on |
| 18 | production regardless of the place of sale, to whom sold, or by |
| 19 | whom used, and regardless of the fact that delivery of the oil |
| 20 | may be made outside the state. |
| 21 | (1) The amount of tax shall be measured by the value of |
| 22 | the oil produced and saved or sold during a month. The value of |
| 23 | oil shall be taxed at the following rates: |
| 24 | (a) Small well oil and tertiary oil, 5 percent of gross |
| 25 | value.; |
| 26 | (b) Tertiary oil: |
| 27 | 1. One percent of the gross value of oil on the value of |
| 28 | oil $60 dollars and below; |
| 29 | 2. Seven percent of the gross value of oil on the value of |
| 30 | oil above $60 and below $80; and |
| 31 | 3. Nine percent of the gross value of oil on the value of |
| 32 | oil $80 and above. |
| 33 | (c)(b) All other oil, 8 percent of gross value. |
| 34 | (2)(a) For the purposes of this section, "value" means the |
| 35 | sale price or market price of a barrel of oil at the mouth of |
| 36 | the well in its natural, unrefined condition. If the oil is |
| 37 | exchanged for something other than cash, if there is no sale at |
| 38 | the mouth of the well, or if the sale price is not indicative of |
| 39 | the true value or market price of the oil produced, value shall |
| 40 | be determined by the sale price of oil of like kind and quality, |
| 41 | considering any differences in the place of production or sale. |
| 42 | (b) Any charges prepaid by the producer or included in the |
| 43 | invoice price for delivery of the oil shall be deducted from the |
| 44 | gross proceeds of the sale which are used to determine the value |
| 45 | of oil produced, provided the oil was sold at a delivered price. |
| 46 | (c) The value of oil produced shall not include any |
| 47 | wellhead or other production taxes imposed by the United States |
| 48 | on the producer, to the extent that such taxes do not provide a |
| 49 | credit or deduction for the tax imposed under this part. |
| 50 | (3)(a) The term "tertiary oil" means the excess barrels of |
| 51 | oil produced, or estimated to be produced, as a result of the |
| 52 | actual use of a tertiary recovery method methods in a qualified |
| 53 | enhanced oil tertiary recovery project, over the barrels of oil |
| 54 | which could have been produced by continued maximum feasible |
| 55 | production methods in use prior to the start of tertiary |
| 56 | recovery. A "qualified enhanced oil tertiary recovery project" |
| 57 | means a project for enhancing recovery of oil which meets the |
| 58 | requirements of 26 U.S.C. s. 43(c)(2) s. 4993(c), Internal |
| 59 | Revenue Code of 1954, as amended, or substantially similar |
| 60 | requirements. |
| 61 | (b) The department may establish the method to be used by |
| 62 | producers to determine the taxable production of tertiary oil |
| 63 | and may require a producer or operator to furnish any |
| 64 | information the department deems necessary for this purpose. |
| 65 | (4) Oil production shall be measured or gauged. Mechanical |
| 66 | metering systems using meters of a type generally approved for |
| 67 | use in the industry may be used to measure oil production. If |
| 68 | tank tables are used to determine oil production, tables |
| 69 | compiled to show 100 percent of the full capacity of tanks, |
| 70 | without deduction for overage or losses in handling, shall be |
| 71 | used; or the oil production shall be adjusted to a basis of 100 |
| 72 | percent of the full capacity of tanks if oil production is |
| 73 | determined using tank tables compiled to show less than 100 |
| 74 | percent of the full capacity of tanks. Oil production shall be |
| 75 | expressed in barrels. |
| 76 | (5) The tax imposed under this section shall be |
| 77 | administered, collected, and enforced by the department. |
| 78 | Section 2. This act shall take effect July 1, 2009. |
| 79 |
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