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HB 596

ENERGY/OIL & GAS WELLS: Establishes an inactive well fee assessment credit (EG INCREASE GF EX See Note)

2026 Regular Session Introduced by Danny McCormick

HB 596 creates a plugging credit that reduces an operator’s inactive well assessment dollar-for-dollar by $4.50 per foot of any 10+ year old plugged well.

Read by title, amended, ordered engrossed, recommitted to the Committee on Appropriations.
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Bill Summary · HB 596

Bill Summary: HB 596 (Louisiana, 2026 Session)

Title

Energy/Oil & Gas Wells: Establishes an inactive well fee assessment credit (EG INCREASE GF EX See Note)

Purpose and Intent

HB 596 creates a new credit program for oil and gas operators that plug inactive wells. The credit allows operators to reduce their outstanding inactive well assessments (fees owed for wells deemed inactive) by an amount tied to the plugging of eligible wells. The overall goal is to incentivize the plugging of older wells and reduce ongoing financial obligations related to inactive wells.

Key Provisions

  • Plugging Credit Authorization

    • Operators may earn a plugging credit by plugging wells that are at least 10 years old.
    • The credit is calculated at $4.50 per foot of the plugged well.
    • The credit is applied against the operator’s inactive well assessment on a dollar-for-dollar basis (i.e., the credit directly reduces the amount owed).

  • Applicability

    • The credit applies to plugging activities for wells that have been inactive and are at least 10 years old.
    • The current law requiring the inactive well assessment remains in place; the credit offsets the assessment owed.

  • Administration and Rules

    • The Louisiana Department (Secretary) is authorized to promulgate rules to implement the provisions of the act.

  • Amendment Details (House Committee Amendments)

    • A technical amendment clarifies that the offset portion of the inactive well assessment would offset the portion of the assessment dedicated to the Oilfield Site Restoration Fund, while not impacting the portion dedicated to the Oil and Gas Regulatory Fund Account.

Affected Parties

  • Operators/Companies with inactive wells:

    • Eligible to receive the plugging credit for wells that are 10+ years old.
    • The credit reduces their outstanding inactive well assessment obligations dollar-for-dollar.

  • State Agencies/Funds:

    • Inactive well assessments and related funds (Oilfield Site Restoration Fund, Oil and Gas Regulatory Fund Account) are involved in the statutory framework and the amendment clarifies how credits interact with these funds.

Procedural and Timeline Details

  • Effective/Implementation:

    • The bill authorizes the secretary to promulgate implementing rules; no explicit effective date is provided in the summary, but rules are expected to guide application, timing, and administration.

  • Legislative History Highlights:

    • The bill was amended by the House Committee on Appropriations (Amendment No. 1) to clarify the interaction between the credit and fund allocations.
    • Sponsor: Representative Danny McCormick.
    • Committee actions occurred in early 2026; the bill underwent standard readings and referrals before the amendment.

Practical Implications

  • Operators can reduce ongoing costs associated with inactive wells by plugging eligible wells and applying the resulting credit toward their passive obligation.
  • The credit provides a financial incentive to accelerate plugging, potentially improving environmental and site restoration outcomes and reducing long-term liabilities related to inactive wells.
  • The rulemaking process will define eligibility specifics (e.g., verification of plugging, foot measurement, sequencing of credits).

If you’d like, I can add a comparison to current law text, map the credit to a hypothetical operator scenario (with numbers), or outline potential fiscal impacts if enacted.

Compiled from official sources — confirm details with the bill’s official record.

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