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 taxes exempted reaches $750,000. The bill outlines the criteria for a well to qualify, including a requirement for at least 60 months of production prior to restimulation and excludes wells that are part of enhanced oil recovery projects.

Additionally, the bill establishes a process for operators to apply for certification of their wells as qualifying, and it includes provisions for revocation of such certification if the well does not meet the criteria. It also imposes civil penalties for false applications or attempts to claim exemptions for non-qualifying wells. The law will take effect on January 1, 2026, and will only apply to hydrocarbons produced on or after that date, ensuring that any tax liabilities incurred before this date remain unaffected.

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