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TX Producers Move Closer to Tax Relief

TX Producers Move Closer to Tax Relief

Texas producers laboring under the weight of low commodity prices are on their way to getting a temporary tax break from the Texas legislature. Last week, the Texas Senate passed S.B. 290, which grants a severance tax exemption to marginal gas and oil wells producing 90 Mcf/d or less or 15 barrels/d or less. Relief would kick in when gas drops below $1.80/MMBtu and/or oil drops below $15/barrel for three consecutive months on the New York Mercantile Exchange.

If enacted, the legislation would take effect immediately and would apply until Aug. 1 or until $445 million in tax exemptions have been granted, whichever comes first.

"We are grateful for some temporary relief during the oil and gas industry's worst-ever price collapse," said Lindsey Dingmore, Texas Independent Producers and Royalty Owners vice president for public affairs. "Small, marginal producers are in real trouble. It is moving to see the governor and the legislature respond so quickly." Texas Gov. George W. Bush has said he would sign the legislation. The proposed legislation has been referred to the House Ways and Means Committee.

Joe Fisher, Houston

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