"Collection wells" refer to a unique method of oil recovery currently being used by only one operation in Wyoming.

Rather than being pumped, oil essentially seeps into collection wells from which it is recovered.

The single collection well operation in Wyoming enjoys two different tax breaks. Until January 1, 1999, the collection well operator will pay only the constitutionally-mandated 1.5% severance tax instead of the usual 6% on oil and gas production.

In addition, the Legislature approved a property tax exemption for collection wells in 1990. HB 24 extended this exemption to include production during calendar year 1994.

According to figures from the Legislative Service Office, production from the collection well operation totalled less than 140,000 barrels during the years 1990 through 1993 (with only 5100 barrels produced during the first nine months of 1994), so the revenue impact is relatively minimal.

Proponents of continuing the tax break stated that it is necessary to maintain the current operation, which ostensibly is primarily for research.

Opponents pointed to the track record of the single collection well operator (overall, production has declined) and the lack of any other operations coming into production.

HB 24 passed overwhelmingly, 55-4 (1 excused) in the House and 29-1 in the Senate.