Texas HB 3159: Relating to a severance tax exemption for oil and gas produced from certain previously inactive restimulation wells; providing a civil penalty.

Bill Text

89(R) HB 3159 - Enrolled version - Bill Text

  

  

  
 H.B. No. 3159

  

  

  

  

 AN ACT

  

 relating to a severance tax exemption for oil and gas produced from 

  

 certain previously inactive restimulation wells; providing a civil 

  

 penalty.

  

        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

  

        SECTION 1.  Subchapter B, Chapter 202, Tax Code, is amended 

  

 by adding Section 202.062 to read as follows:

  

        Sec. 202.062.  TAX EXEMPTION FOR OIL AND GAS PRODUCED FROM 

  

 CERTAIN RESTIMULATION WELLS. (a) In this section:

  

              (1)  "Commission" means the Railroad Commission of 

  

 Texas.

  

              (2)  "Consecutive months" means months in consecutive 

  

 order, regardless of whether an oil or gas well produces 

  

 hydrocarbons during any or all of those months.

  

              (3)  "Hydrocarbons" means the oil, gas, condensate, and 

  

 other hydrocarbons produced from an oil or gas well.

  

              (4)  "Operator" means the person responsible for the 

  

 actual physical operation of an oil or gas well.

  

              (5)  "Qualifying well" means a restimulation well that 

  

 has been certified by the commission under this section as a 

  

 qualifying well.

  

              (6)  "Restimulation costs" means expenses that are 

  

 directly attributable to payment for the restimulation treatment 

  

 performed on a restimulation well.

  

              (7)  "Restimulation treatment" means the treatment of 

  

 an oil or gas well with an application of fluid under pressure for 

  

 the purpose of initiating or propagating fractures in a target 

  

 geologic formation to enhance the production of hydrocarbons from 

  

 the well.

  

              (8)  "Restimulation well" means a previously completed 

  

 oil or gas well that, following production of hydrocarbons, became 

  

 an inactive well and subsequently received a restimulation 

  

 treatment.

  

        (b)  This section does not apply to an oil or gas well that:

  

              (1)  has less than 60 months of production reported to 

  

 the commission before the date a restimulation treatment is 

  

 performed;

  

              (2)  is part of an enhanced oil recovery project, as 

  

 defined by Section 89.002, Natural Resources Code;

  

              (3)  is drilled but not completed and that does not have 

  

 a record of hydrocarbon production reported to the commission; or

  

              (4)  is not an inactive well, as defined by Section 

  

 89.002, Natural Resources Code, immediately before the 

  

 restimulation treatment is performed.

  

        (c)  Hydrocarbons produced from a qualifying well are exempt 

  

 from the taxes imposed by Chapter 201 and this chapter until the 

  

 earlier of:

  

              (1)  the last day of the 36th consecutive month 

  

 following the month in which the well first produces hydrocarbons 

  

 after a restimulation treatment is completed; or 

  

              (2)  the date on which the cumulative amount of taxes 

  

 exempted under Chapter 201 and this chapter and any credit under 

  

 Subsection (l) equals the lesser of:

  

                    (A)  the restimulation cos