Enrolled Bill Summary

            Senate Bill 290 amends the Tax Code to provide temporary severance tax relief for marginal oil and natural gas wells when market energy prices are low. The act applies to oil and gas production for February through July 1999. Qualifying oil leases and gas wells are those whose production from October and December 1998 was no more than 15 barrels of oil per day per well or 90 thousand cubic feet of gas per day per well, excluding any flared amount. The Railroad Commission of Texas is responsible for certifying which leases and wells qualify. For those qualifying, a tax exemption is triggered if the comptroller certifies that the monthly average closing price of West Texas intermediate crude is below $15 per barrel, or the monthly average closing price of gas is below $1.80 per million Btu, for the three months preceding the month of production. The applicable price is that of the New York Mercantile Exchange. The temporary exemption expires September 1, 1999, or when the state has waived $45 million in total oil and gas severance taxes, whichever occurs first. Any taxes paid on exempt oil or gas entitle a payer, on application, to a subsequent tax credit.