Regular Session
Government Affairs & Regulatory Compliance Analysis
HB3159 creates a severance tax exemption of up to $750,000 per well for operators who restimulate (refracture) previously inactive oil and gas assets, effective January 1, 2026. Upstream operators must immediately adjust asset development plans and implement a strict two-step certification workflow with the Railroad Commission (RRC) and Comptroller to capture this value without triggering significant civil penalties for non-compliance.
Rep. Drew Darby·House Bill·Regular Session
This legislation has regulatory implications for the following Texas businesses and organizations:
Notable regulatory updates (effective 2026-01-01). Consider how these changes may affect your operations.
Affected business types:
lowMinimal cost impact anticipated.
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Key implementation requirements and action items for compliance with this legislation
The statute leaves two critical definitions to agency rulemaking. Monitor the *Texas Register* closely for:
JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.
Schedule a ConsultationInformation presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
This bill's path through the Texas Legislature
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Common questions about HB3159
HB3159 creates a severance tax exemption of up to $750,000 per well for operators who restimulate (refracture) previously inactive oil and gas assets, effective January 1, 2026. Upstream operators must immediately adjust asset development plans and implement a strict two-step certification workflow with the Railroad Commission (RRC) and Comptroller to capture this value without triggering significant civil penalties for non-compliance.
HB3159 was authored by Texas Representative Drew Darby during the Regular Session.
HB3159 was signed into law by Governor Greg Abbott on June 20, 2025.
HB3159 is enforced by Comptroller of Public Accounts (Tax Administration), Office of the Attorney General (OAG) and Railroad Commission of Texas (Certification).
The regulatory priority for HB3159 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.
The cost impact of HB3159 is estimated as "low". This may vary based on industry and implementation requirements.
HB3159 addresses topics including civil remedies & liabilities, oil & gas, taxation, taxation--energy resources and comptroller of public accounts.
Key dates for HB3159: Effective date is 2026-01-01. Rulemaking: Adopt rules necessary to administer the certification of qualifying restimulation wells (discretionary authority granted in Sec. 202.062(p)). (Prior to 2026-01-01); Establish forms and procedures for tax exemption applications and cost reporting (discretionary authority granted in Sec. 202.062(k)). (Prior to 2026-01-01). Consult with
HB3159 establishes the following penalties: civil penalty of Up to $10,000 plus the difference between taxes paid and taxes due for Applying or attempting to apply for an exemption knowing the well is not a qualifying well (Sec. 202.062(n)).; administrative/criminal penalty of Subject to penalties under Chapters 85 and 91, Natural Resources Code for Submitting an application, report, or document known to contain a material false statement (Sec. 202.062(m)).; administrative penalty of Revocation of Tax Exemption for RRC revocation of the qualifying well certificate automatically revokes the tax exemption (Sec. 202.062(h)).. Consult with legal counsel for specific applicability to your situation.
HB3159 primarily affects energy companies and power generators. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.
JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.
