Companion bills have been introduced in the Texas legislature togive small producers a break on gas and oil severance taxes inlight of foundering commodity prices. If enacted, legislation wouldtrigger a temporary suspension of severance taxes on productionfrom certain wells.

Relief would be triggered if the three-month average price forgas hits $1.89/Mcf (NYMEX) or $15/barrel (NYMEX) for oil.. When theprice trigger is reached, the severance tax would be suspendeduntil the three-month average rises above the trigger price.Severance tax relief would apply to oil production from leases withwells averaging 15 barrels/d or less and to gas production fromleases with wells averaging 90 Mcf/d or less. If passed, themeasure would take effect immediately and last until Aug. 31 oruntil $45 million in tax relief has been granted, whichever comesfirst.

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