Lawmakers back bill offering credit for operators who plug inactive wells amid debate on fiscal impacts
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Summary
Committee reported HB 596 favorable after adopting a technical amendment; the bill would let operators apply a credit against inactive‑well assessment fees for plugging wells themselves, a change proponents say will reduce orphan‑well liabilities while department staff warned of potential large fiscal credits requiring appropriations work.
Representative Brett McCormick presented HB 596 to allow operators who plug inactive wells to receive a credit against inactive‑well assessment fees (a $4.50/foot credit was discussed as a working figure). The stated intent is to incentivize operators to plug wells rather than have the state assume orphan‑well liabilities.
Department of Conservation and Energy staff and LDWF/agency witnesses described the practical benefits of privately plugging wells (lower cost, existing operator knowledge and flexibility) but warned the bill’s current mechanics could generate credits that exceed annual assessments and thus require appropriations or technical fixes. Department staff outlined an example showing that if operators who plugged older wells in a recent year had been eligible, the generated credits could have substantially exceeded assessments due that year, creating a budgetary gap.
Members raised questions about bonds, grandfathered wells and the potential for “double‑dipping.” Department officials confirmed wells inactive five or more years typically require financial security; they noted existing programs allow plugging orphan wells by contractors, and that the bill’s authors were willing to work with the department to refine credit mechanics. The committee adopted a clarifying technical amendment that slightly adjusted the statutory language and then reported HB 596 favorable; members said the bill will be dual‑referred to appropriations so fiscal effects can be resolved.
