[Congressional Record Volume 155, Number 118 (Friday, July 31, 2009)]
[Extensions of Remarks]
[Pages E2150-E2151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         TEXAS H. CON. RES. 183

                                 ______
                                 

                        HON. K. MICHAEL CONAWAY

                                of texas

                    in the house of representatives

                         Friday, July 31, 2009

  Mr. CONAWAY. 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

[[Page E2151]]

     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.

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