House Bill No. 3159 proposes a severance tax exemption for oil and gas produced from certain restimulation wells in Texas. The bill introduces a new section, 202.062, to the Tax Code, which defines key terms such as "qualifying well," "restimulation costs," and "restimulation treatment." Under this new provision, hydrocarbons produced from qualifying wells will be exempt from taxes imposed by Chapter 201 and the current chapter for a period of up to 36 consecutive months following the first production after restimulation treatment, or until the cumulative exempted taxes reach $750,000. The bill outlines the criteria for a well to qualify, including a requirement for certification by the Railroad Commission of Texas.

Additionally, the bill establishes a civil penalty for individuals who knowingly submit false information regarding the exemption or attempt to claim it for non-qualifying wells. The penalty can reach up to $10,000 plus any difference between taxes paid and those due. The bill also stipulates that the new tax exemption will only apply to hydrocarbons produced on or after January 1, 2026, and clarifies that existing tax liabilities prior to this date remain unaffected. The Texas Railroad Commission is granted authority to adopt necessary rules for administering this section.

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