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Oklahoma House votes to cap tax credit for at-risk oil wells at $12.5 million

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OKLAHOMA CITY – After tabling a measure that would save over $100 million earlier in day, lawmakers in the Oklahoma House of Representatives decided to approve the bill during a late-night session.

Last year, Oklahoma gave oil and gas companies more than $600 million in tax credits and rebates, including one rebate that helps companies who are not making a profit or own an ‘at risk’ well.

In the past, the rebate cost the state about $10 million each year.

However, due to the drop in oil prices across the globe, more companies have been filing in an attempt to claim the rebate.

Next year, experts predicted that rebate alone would cost Oklahoma more than $130 million.

The Oklahoma Senate voted to eliminate the at-risk well program altogether, but lawmakers in the House of Representatives pushed through an amendment that would put a cap of $25 million on the program.

“We understand what’s going on, we know Oklahoma is in a tough position,” said Mike Terry, President of the Oklahoma Independent Petroleum Association. “We came up with a compromise, let’s put a cap at $25 million.”

Eventually, House Speaker Jeff Hickman pulled the bill from consideration.

“Because this bill now would cost $25 million to our budget. We’re facing budget difficulties, we will need to lay this bill over, probably for the rest of this year,” Hickman said on the House floor on Thursday.

Hickman’s move puzzled Oklahomans, lawmakers and oil executives.

“Speaker Hickman chose to hold the bill over and not let it be voted on,” Terry said. “I don’t understand it, it was his bill. So the only think I can come up with is he didn’t like the amendment.”

With the financial¬†crisis looming and only a week left for lawmakers to create next year’s budget, the House brought the bill back up during a late night session on Thursday.

Lawmakers renegotiated the amendment, passing the measure which would keep the program in place but cap it at $12.5 million.

Also, it restricts who is eligible for the rebate.

Only companies with a well that produces an average volume of 10 barrels a day or less can qualify.

The bill passed the House 93-2, sending it to the Oklahoma Senate for consideration.

Hickman told the Associated Press that he believes the bill will restore about $120 million for schools and other services.

This video was created Thursday afternoon, after the bill was put on hold.