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 36 consecutive months following the first production after 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 establishes civil penalties for individuals who knowingly apply for exemptions for wells that do not qualify, with penalties potentially reaching $10,000 plus any unpaid taxes. The Railroad Commission of Texas is tasked with certifying qualifying wells and may revoke certifications if conditions are not met. The provisions of this bill will take effect on January 1, 2026, and will only apply to hydrocarbons produced on or after that date, ensuring that existing tax liabilities remain unaffected until then.

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