The bill, S.B. No. 782, introduces a severance tax exemption for oil and gas produced from certain restimulation wells in Texas. It adds Section 202.062 to the Tax Code, defining key terms such as "qualifying well," "restimulation treatment," and "operator." The exemption applies to hydrocarbons produced from qualifying wells for a period of up to 36 consecutive months following the first production after a restimulation treatment, or until the cumulative amount of exempted taxes reaches $750,000. The bill outlines the process for operators to apply for certification of their wells as qualifying, the requirements for tax exemption applications, and the penalties for submitting false information or attempting to claim exemptions for non-qualifying wells.

Additionally, the bill specifies that the new tax exemption provisions will only apply to hydrocarbons produced on or after January 1, 2026, and it clarifies that any tax liabilities incurred before this date will remain unaffected. The legislation also allows the Texas Railroad Commission to revoke certifications for qualifying wells if they are found not to meet the criteria. The Attorney General is empowered to recover civil penalties for violations related to the exemption claims, with the venue for such actions being in Travis County. The bill is set to take effect on January 1, 2026.

Statutes affected:
Introduced: ()