Companion bills have been introduced in the Texas legislature to
give small producers a break on gas and oil severance taxes in
light of foundering commodity prices. If enacted, legislation would
trigger a temporary suspension of severance taxes on production
from certain wells.
Relief would be triggered if the three-month average price for
gas hits $1.89/Mcf (NYMEX) or $15/barrel (NYMEX) for oil.. When the
price trigger is reached, the severance tax would be suspended
until the three-month average rises above the trigger price.
Severance tax relief would apply to oil production from leases with
wells averaging 15 barrels/d or less and to gas production from
leases with wells averaging 90 Mcf/d or less. If passed, the
measure would take effect immediately and last until Aug. 31 or
until $45 million in tax relief has been granted, whichever comes
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