Enhanced oil recovery-severance tax exemption.

Plain English Breakdown

The official source material does not provide specific details about the content of annual reports required by the act.

Oil Tax Break for Enhanced Recovery

This law removes severance taxes on oil recovered through enhanced recovery methods from July 2026 to July 2031, and requires yearly reports until November 2036.

What This Bill Does

• Exempts tertiary oil production from a two percent (2%) severance tax for five years after the first tertiary production begins.
• Requires the Oil and Gas Conservation Commission to certify projects that qualify for this exemption between July 1, 2026 and July 1, 2031.
• Necessitates annual reports from both the Department of Revenue and the Oil and Gas Conservation Commission on the exempted oil production until November 1, 2036.

Who It Names or Affects

• Oil companies that use enhanced recovery methods to extract tertiary oil in Wyoming.

Terms To Know

Tertiary Oil Production

The process of recovering additional oil from a reservoir using advanced techniques after primary and secondary recovery methods have been used.

Severance Tax

A tax on the removal or extraction of natural resources, such as oil, from a state's land or water.

Limits and Unknowns

• The exemption only applies to projects certified between July 1, 2026 and July 1, 2031.
• Annual reports are required until November 1, 2036, but the content of these reports is not detailed in this summary.

Official Summary Text

Bill Summary - 26LSO-0159

Bill No.:

HB0128

Effective:

7/1/2026

LSO No.:

26LSO-0159

Enrolled Act No.:

HEA No. 0018

Chapter No.:

46

Prime Sponsor:

Tarver

Catch Title:

Enhanced oil recovery-severance tax exemption.

Has Report:

Yes

Subject:

Providing a severance tax exemption for tertiary oil production.

Summary/Major Elements:

This act provides an exemption from the severance taxes charged in W.S. 39-14-204(a)(iii) (which is a two percent (2%) severance tax) for tertiary production resulting from enhanced oil recovery projects that the Oil and Gas Conservation Commission certifies.

This exemption applies to tertiary production from projects certified between July 1, 2026 and July 1, 2031, and the exemption applies for a period of five (5) years from the date of the first tertiary production from the project.

Under current law, tertiary production is oil that is recovered from a petroleum reservoir by means of a tertiary enhanced recovery project using at least one tertiary recovery technique that meets state or federal requirements.

The act requires the Department of Revenue and the Oil and Gas Conservation Commission to report annually on the tertiary production qualifying for the severance-tax exemption provided in this act until November 1, 2036.

Comments:

This act requires an annual report from the Department of Revenue and the Oil and Gas Conservation Commission until November 1, 2036.

The above summary is not an official publication of the Wyoming Legislature and is not an official statement of legislative intent.

While the Legislative Service Office endeavored to provide accurate information in this summary, it should not be relied upon as a comprehensive abstract of the bill.

Current Bill Text

26LSO-0159

ORIGINAL House

ENGROSSED
Bill No
.
HB0128

ENROLLED ACT NO. 18,

HOUSE OF REPRESENTATIVES

SIXTY-EIGHTH LEGISLATURE OF THE STATE OF WYOMING
2026 Budget Session

AN ACT relating to taxation and revenue; providing a severance tax exemption for tertiary oil production as specified; requiring reports; and providing for an effective date.

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

Section 1
.

W.S. 39
‑
14
‑
205 by creating a new subsection (q) is amended to read:

39
‑
14
‑
205.

Exemptions.

(q)

Tertiary production resulting from projects certified by the Wyoming oil and gas conservation commission after July 1, 2026 and before July 1, 2031 is exempt from the severance taxes imposed by W.S. 39
‑
14
‑
204(a)(iii) for a period of five (5) years from the date of first tertiary production. Not later than November 1, 2026 and each November 1 thereafter until November 1, 2036, the oil and gas conservation commission and the department shall report on the tertiary production qualifying for the exemption under this subsection. The report shall include the amount of production, the number of operators qualifying for the exemption, the number of wells, the amount of severance taxes paid on that production, the amount of severance taxes exempted under this subsection and the ad valorem and sales taxes paid in connection with that production.

Section 2
.

This act is effective July 1, 2026
.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the House.

Chief Clerk

1