Enhanced oil recovery-severance tax exemption.

24LSO-0450
2024
STATE OF WYOMING
24LSO-0450
Numbered
2.0

HOUSE BILL NO. HB0185

Enhanced oil recovery-severance tax exemption.

Sponsored by: Representative(s) Burkhart, Banks, Conrad, Heiner, Knapp, Larson, JT, Lawley and Tarver and Senator(s) Cooper, Ellis and Jones

A BILL

for

AN ACT relating to mine product taxes; providing an exemption for the production of crude oil and natural gas produced through enhanced oil recovery techniques and using Wyoming carbon dioxide; specifying conditions for the exemption; requiring reports; providing definitions; making conforming amendments; providing a sunset date for the exemption; and providing for an effective date.

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

Section 1
.

W.S. 39
‑
14
‑
204(a)(iii) and (iv) and 39
‑
14
‑
205 by creating a new subsection (q) are amended to read:

39
‑
14
‑
204.

Tax rate.

(a)

Except as otherwise provided by this section and W.S. 39
‑
14
‑
205, the total severance tax on crude oil, lease condensate or natural gas shall be six percent (6%), comprising one and one
‑
half percent (1.5%) imposed by the Wyoming constitution article 15, section 19 and the remaining amount imposed by Wyoming statute. The tax shall be distributed as provided in W.S. 39
‑
14
‑
211 and is imposed as follows:

(iii)

Two percent (2%)
, except as provided in W.S. 39
‑
14
‑
205(q)
; plus

(iv)

Two percent (2%)
,
except as provided in W.S. 39
‑
14
‑
205(n)
and (q)
.

39
‑
14
‑
205.

Exemptions.

(q)

Crude oil and natural gas production resulting from oil and gas that is produced by means of enhanced oil and gas recovery is exempt from one
‑
half (1/2) of the severance taxes imposed under W.S. 39
‑
14
‑
204(a)(iii) and from all of the severance taxes imposed under W.S. 39
‑
14
‑
204(a)(iv), subject to the following:

(i)

As used in this subsection:

(A)

"Carbon capture, utilization and storage technology" means technology that has the principal purpose of capturing, reusing, storing, sequestering or using carbon dioxide emissions to prevent carbon dioxide from entering the atmosphere;

(B)

"Enhanced oil and gas recovery" means all existing and future technologies or methods to recover oil and gas beyond traditional primary and secondary recovery methods, including technology to optimize development and recovery of oil and gas resources in new fields.

(ii)

The taxpayer seeking the exemption shall complete an application for the exemption on a form and in the manner prescribed by the department;

(iii)

To qualify for the exemption under this subsection, the crude oil and natural gas shall be produced by means of enhanced oil and gas recovery from projects using carbon capture, utilization and storage technology;

(iv)

The carbon dioxide used in the enhanced oil and gas recovery to produce crude oil and natural gas shall be from a carbon dioxide source originating within the state of Wyoming;

(v)

To ensure that the crude oil and natural gas production by means of enhanced oil and gas recovery satisfies the conditions of this subsection, the department may consult with the public service commission and the Wyoming oil and gas conservation commission before approving the exemption under this subsection;

(vi)

The department may promulgate rules as necessary to implement this subsection;

(vii)

The exemption available under this subsection shall be available to a taxpayer for all qualifying production by means of enhanced oil and gas recovery that is completed before July 1, 2032;

(viii)

Not later than November 1 of each year, the department shall report to the joint revenue interim committee and the joint minerals, business and economic development interim committee on the use of the exemption under this subsection and the associated revenue impacts.

Section 2
.

This act is effective July 1, 2024
.

(END)

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HB0185