SB 1577’s Cap of $12.5 Million for At Risk Wells On Governor’s Desk

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An Oklahoma bill providing a tax rebate for economically at-risk oil and gas wells received final passage in the Senate on Wednesday.

Senate Bill 1577, co-authored by Senate Pro Tempore Brian Bingman and House Speaker Jeff Hickman, was originally filed on May 2 in order to slash a tax rebate program that was originally created in 2005 which assisted operators of distressed wells during times of economic distress.

The House first amended SB 1577 by capping the tax rebate at $25 million annually; however, a second House amendment was ultimately passed, providing for a maximum rebate of $12.5 million annually for calendar years 2015-2020.

The rebate program soared over $130 million as the oil and gas industry experienced an economic downturn. The state legislature introduced several bills this session designed to eliminate or significantly reduce various tax credits and rebates.

During Wednesday’s debate on SB 1577, Senator Ralph Shortey from south Oklahoma City voiced his concern that small producers could potentially plug their wells instead.

“The smallest of the smallest are going to be hurt dramatically,” said Shortey.

“This should not jeopardize any wells to be plugged,” said Senate Pro Tempore Brian Bingman.

Following debate, the House amendments to SB 1577 were passed by a vote of 45-2. The bill was sent to the Governor’s office on Wednesday afternoon for approval or veto. Governor Fallin has expressed that she would support the amended bill.