Bill > SB782

This bill introduces a new severance tax exemption for oil and gas produced from restimulation wells, which are previously completed wells that undergo a special treatment to enhance hydrocarbon production. The exemption allows operators to avoid paying severance taxes for up to 36 consecutive months after a restimulation treatment, or until the total tax exemption reaches $750,000, whichever comes first. To qualify, a well must have at least 60 months of prior production and cannot be part of an enhanced oil recovery project. Operators must apply to the Railroad Commission of Texas to certify their well as a "qualifying well" and then to the state comptroller to claim the exemption. The bill includes provisions for revoking certificates if requirements are not met and imposes civil penalties of up to $10,000 for fraudulent applications. The tax exemption will only apply to hydrocarbons produced on or after January 1, 2026, and does not affect tax liabilities that accrued before the bill's effective date. The legislation aims to incentivize restimulation of existing oil and gas wells by providing a financial benefit to operators who invest in treatments to enhance production.