Bill > HB3159

This bill creates a severance tax exemption for oil and gas produced from previously inactive wells that undergo a restimulation treatment, which involves applying fluid under pressure to fracture geological formations and enhance hydrocarbon production. The exemption applies to qualifying wells that meet specific criteria, including being inactive for a certain period and having at least 60 months of prior production. The tax exemption lasts for either 36 consecutive months after the well resumes production or until the total tax exemption reaches $750,000, whichever comes first. Operators must apply to the Railroad Commission of Texas for certification as a qualifying well and then to the comptroller for the actual tax exemption. The bill includes provisions to prevent abuse, such as civil penalties for knowingly submitting false applications, with potential fines up to $10,000 plus the difference in taxes owed. The tax exemption will only apply to hydrocarbons produced on or after January 1, 2026, and is designed to incentivize revitalizing existing oil and gas wells that have become inactive, potentially extending the productive life of existing energy infrastructure.