TX HB3159

Creates a severance tax exemption for oil and gas produced from previously inactive wells that undergo restimulation treatment (hydraulic fracturing to enhance production)

Qualifying wells must have at least 60 months of prior production history, must have been classified as inactive before restimulation, and cannot be part of enhanced oil recovery projects

Tax exemption lasts until the earlier of 36 consecutive months after post-treatment production begins, or when cumulative tax savings equal the lesser of actual restimulation costs or $750,000

Railroad Commission of Texas certifies qualifying wells; comptroller approves exemption applications and may issue tax credits for taxes paid between certification and exemption approval

Civil penalty of up to $10,000 plus unpaid tax amounts applies to persons who knowingly apply for exemptions on non-qualifying wells; false submissions also subject to Natural Resources Code penalties

Effective date: January 1, 2026; applies only to hydrocarbons produced on or after that date