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Bill

SB 1296

Relating to phasing out the tax reduction for certain high-cost gas.

89th Legislature (2025)

SB 1296 would gradually eliminate the existing tax reduction for high-cost natural gas in Texas, increasing state revenue while potentially raising production costs and consumer prices.

Referred to Finance
#comptrollerofpublicaccounts(v2608) #oil&gas(i0545) #taxation--energyresources(i0810)
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Bill Summary · SB 1296

Legislative bill overview

SB 1296 proposes to phase out a tax reduction that currently applies to certain high-cost natural gas in Texas. The bill would gradually eliminate this existing tax break over a specified period. The exact mechanism and timeline for the phase-out are not detailed in the available bill information.

Why is this important

This change would affect natural gas consumers and producers who currently benefit from reduced taxes on high-cost gas production. It could increase state tax revenue but may also increase costs for consumers or reduce incentives for gas production in certain contexts. The fiscal impact depends on how broadly "high-cost gas" is defined and the phase-out timeline.

Potential points of contention

  • Revenue vs. economic impact trade-off: Eliminating the tax reduction increases state revenue but may reduce profitability for gas producers and potentially affect energy prices
  • Definition ambiguity: The specific definition of "high-cost gas" is critical—too broad could harm viable producers, too narrow could limit intended tax increases
  • Industry competitiveness: Removing tax advantages may disadvantage Texas producers relative to other states with similar incentives, potentially affecting jobs and investment

Compiled from official sources — confirm details with the bill’s official record.

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