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Relating to the severance tax exemption for oil and gas produced
from certain inactive wells.
According to the Legislative Budget Board, no significant fiscal implication to the State is anticipated.
SB 533 would clarify requirements for wells exempt from severance taxes, not including wells that are part of an oil enhanced recovery project, or a well that is drilled but not completed and that does not have a record of hydrocarbon production. The bill also reduces the exemption from ten years to five years. Furthermore, it streamlines all exemptions to two years. There was historically three-year exemptions for wells in the 1990s.
Texas Action recommends opposing SB 533 because it infringes upon the principles of free markets and limited government. It is not the proper role of government to provide tax incentives to private companies for economic development purposes.