State Representative Jessica Gonzalez (D-104) filed legislation that would repeal the current exemption of severance tax for flared and vented gas that is produced in Texas, a measure that would produce more tax revenue and discourage excess pollution.
On Tuesday, January 26, 2021, Rep. Gonzalez filed House Bill 1377, a bill that would repeal the flared and vented gas severance tax exemption. Currently, flared and vented gas produced in the state is exempt from being taxed at 7.5% of the market value of gas produced. Because of the exemption, Texas missed out on collecting over $120 million from flared and vented gas tax from 2012-2017.
HB 1377 would also prevent the waste and pollution that results from excessive flaring. Since gas flaring is a significant source of pollution, a tax on flared gas creates a market incentive, encouraging producers to limit their flaring.
Revenue from taxes collected would be allocated to the Economic Stabilization Fund (more commonly known as the ?Rainy Day Fund?), the State Highway Fund, and the Foundation School Program as constitutionally directed.
“Texas is currently one of the largest contributors of flared and vented gas pollution, and the state legislature gives polluters a pass on their taxes,” Gonzalez said. “Texas has seen a massive increase of natural gas flared and vented, from 39,569 million cubic feet in 2010, to 251,186 million cubic feet in 2019. According to the U.S. Energy Information Administration, Texas accounted for 47% of the total flared and vented natural gas in the United States in 2019. Vented and flared gas contains pollutants, such as sulfur, that are hazardous to health, and climate pollutants, such as methane, that make climate change worse. HB 1377 would protect our environment by discouraging the practice of excessive flaring and venting, and generate millions in revenue for the state.
“At time when the Texas state budget is severely constrained and the public is increasingly worried about Texas oil field waste, this bill makes good sense,” said Adrian Shelley, Director of Public Citizen Texas. “Rep. Gonzalez’s proposal offers a smart way to curb pollution and generate revenue for Texas.”
Representative Jessica Gonzalez was elected in 2018 to represent House District 104 in Dallas County. Gonzalez is Vice-chair of the House LGBTQ Caucus and Vice-Chair of NHCSL’s Human and Civil Rights Task Force.