SB 64 SEVERANCE TAX EXEMPTION FOR CERTAIN PROJECTS

Sen Ron Griggs

Actions: [1] SCC/STBTC/SFC-SCC [6]germane-STBTC

Scheduled: Not Scheduled

 Senate Bill 64 (SB 64) provides a temporary Oil and Gas Tax exemption for the severance of natural gas from a production compliance project completed to comply with certain agency rules. 

 Senate Bill 64 (SB 64) provides an Oil and Gas Tax exemption for the extraction of natural gas from a production compliance project (project) for the first ten years of production following the project’s completion or until the date that the amount of exempted tax equals the project’s cost. Production compliance project is defined as a project required after 2022 by either the Oil Conservation Commission to reduce the venting and flaring of natural gas from wells, equipment, and facilities or by the Environment Improvement Board to reduce ozone to remain in production.

A natural gas or crude oil well will qualify as a project if the well’s operator applies to Taxation and Revenue (TRD) within 12 months of completion of the compliance project; the project was required after 2022 by regulation in order to remain in production; the well is a stripper well; total production in the state does not exceed 1,000 barrels of oil equivalent per day; and the project installs tank controls, pneumatic devices, actuators, vapor recovery units, infrared cameras, or smokeless combustion chambers. 

SB 64 applies to production compliance projects completed on or after July 1, 2024.