Natural gas regulations.

WORKING DRAFT
2012
STATE OF
WYOMING
12LSO-0175

SENATE FILE
NO.
SF0051

Natural gas regulations
.

Sponsored by:

Senator(s) Jennings

A BILL

for

AN ACT relating to

natural gas
; providing for a
moratorium
on the plugging of coalbed methane wells as specified;
providing a severance tax exemption
as specified
; providing
definitions
;
providing for reports; providing for a sunset date
on the
moratorium
;
and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
. W.S. 30
‑
5
‑
129 is created to read:

30
‑
5
‑
129.

Moratorium
on coalbed methane well plugging
; report; sunset
.

(a)

Notwithstanding any other provision of law, t
he commission, the department of environmental quality and the office of state lands
and investments shall not plug or
allow
or cause
another to plug
coalbed
methane well
s
under their authority, unless doing so is necessary to:

(i)

Protect public health, safety or welfare;

(ii)

Protect drinking water sources; or

(iii)

Prevent damage to the
mineral estate
.

(b)

The commission, the department of environmental quality and the
office of state lands and investments shall
report to the joint minerals, business and economic development interim committee
by December 1, 2012 and annually thereafter on the
number of coalbed methane wells
plugged in the last year and the stated reason for
the plugging of each well
.

(c)

This section is repealed
effective
June 30, 2015.

Section 2
.
W.S.
39
‑
14
‑
201(a)(iii), (xv) and by
creating a new paragraph (xx
x
v
ii
) and
39
‑
14
‑
205
(k) and by creating a new subsection (m
) are
amended to read:

39
‑
14
‑
201.

Definitions.

(a)

As used in this article:

(iii)

"Average daily production" means the qualified maximum total production of domestic crude oil

or natural gas
produced from wells reported as oil

or natural gas
wells to the Wyoming oil and gas commission during the preceding calendar year divided by the number of calendar days in that year times the number of wells which produced and wells which injected substances for the recovery of crude petroleum

or natural gas
from that property or lease in that year. To qualify as maximum total production each well must have been maintained at the maximum feasible rate of production in accordance with recognized conservation practices and not significantly curtailed by reason of mechanical failure or other disruption in production;

(xv) "Natural gas" means all gases, both hydrocarbon and nonhydrocarbon, that occur naturally

or are enhanced
beneath the earth's crust and are produced from an oil or gas well. For the purposes of taxation, the term natural gas includes products separated for sale or distribution during processing of the natural gas stream
including, but not limited to plant condensate, natural gas liquids
,

and

sulfur

and enhanced mic
r
obe coalbed methane
;

(xx
x
v
ii
)

"Stripper
gas
production" means the production from a property or lease
on which:

(A)

The
average daily production of
natural gas
from wells reported as
natural gas wells
to the Wyoming oil and gas commission did not exceed
seventy-five (75) MCF per day per well during the preceding calendar year; and

(B)

The producer did not discharge production water on or
above the surface of the earth.

39
‑
14
‑
205.

Exemptions.

(k)

A taxpayer who is liable for payment of taxes under W.S. 39
‑
14
‑
204(a)(i), (ii) and (iii) on the production of natural gas is entitled to a credit against those taxes in an amount equal to fifty percent (50%) of the amount certified by the gas research review committee under W.S. 39
‑
14
‑
202(a)(iv) through (x) as a qualifying investment by that taxpayer in a research project. Credits under this section shall first be applied to tax liability
under W.S. 39
‑
14
‑
204(a)(iii) and then to the tax liability under W.S. 39
‑
14
‑
204(a)(ii).

A taxpayer shall not be entitled to a credit under this section
for
any
stripper gas production
which is
exempt from taxes imposed by W.S. 39
‑
14
‑
204(a)(iii) as provided in subsection (m) of this section.

(m
)

Stripper gas production is exempt from a percentage of the severance taxes imposed by W.S. 39
‑
14
‑
204(a)(iii) as follows:

(i)

For natural gas stripper wells which beg
i
n production on or before January 1, 2013:

(A)

One hundred percent (100%) from January 1, 2013 through December 31, 2022; and

(B)

Fifty percent (50%) thereafter.

(ii)

For natural gas stripper wells whic
h begin
production
January 1, 2013
through December 31, 2013
:

(A)

Seventy-five percent (75%) from January 1, 2014 through December 31, 2023
; and

(B)

Fifty percent (50%) thereafter.

(iii)

For natural gas stripper wells whi
ch beg
i
n production on or after
January 1, 2014, fifty percent (50%).

Section
3
.

This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

1
SF0051