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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 1059 By: Thompson and Hall of the
Senate
and
Wallace and Hilbert of the
House
COMMITTEE SUBSTITUTE
An Act relating to the Corporation Commission
Plugging Fund; amending 17 O.S. 2011, Section 180.10,
as last amended by Section 1, Chapter 153, O.S.L.
2016 (17 O.S. Supp. 2020, Section 180.10), which
relates to the Corporation Commission Pluggin g Fund;
modifying certain termination date for plugging fund;
amending 68 O.S. 2011, Sections 1101 and 1102, as
amended by Sections 2 and 3, Chapter 153, O.S.L.
2016, and 1103, as last amended by Section 4, Chapter
153, O.S.L. 2016 (68 O.S. Supp. 2020, Sections 1101,
1102 and 1103), which relate to the excise tax on oil
and gas; extending termination date for certain
taxes; providing an effective date; and declaring an
emergency.
BE IT ENACTED BY THE PEOPLE OF T HE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 17 O.S. 2011, Section 180.10, as
last amended by Section 1, Chapter 153, O.S.L. 2016 (17 O.S. Sup p.
2020, Section 180.10), is amended to read as follows:
Section 180.10. A. There is hereby created in the State
Treasury a fund for the Corporation Commission to be designated the
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“Corporation Commission Plugging Fund ”. The plugging fund shall
consist of monies received by the Corporation Commission as required
by law to be deposited to th e credit of said fund. The fund s hall
be a continuing fund not subject to fisc al year limitations and
shall not be subject to legislativ e appropriations. Expenditure s
from the plugging fund shall be made pursuant to the laws of this
state and the statute s relating to the Corporation Comm ission. For
each fiscal year, the Commission may expend not more than eight
percent (8%) of the total amount deposited to the credit of the
plugging fund during the previous fiscal year for the purpose of
responding to occurrences of seeping natural gas a s provided for in
Section 317.1 of Title 52 o f the Oklahoma Statutes. In addition,
expenditures from the plugging fund may be made p ursuant to The
Oklahoma Central Purchasing Act, Section 85.1 et seq. of Title 74 of
the Oklahoma Statutes, for purposes of immediately responding to
emergency situations, within the Commission ’s jurisdiction, having
potentially critical environmental or pu blic safety impact.
Warrants for expenditures from the fund shall be drawn by the State
Treasurer, based on claims signed by an authorized employee of the
Corporation Commission and approved for payment by the Director of
the Office of Management and Ente rprise Services. The provisions of
this act or rules promulgated pursuant thereto, shall not be
construed to relieve or in any way diminish the surety bonding
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requirements required by Section 318.1 of Title 52 of the Oklahoma
Statutes.
B. Prior to July 1, 2021 2026, the plugging fund shall be
maintained at Five Million Dollars ($5,000,000.00). I f the plugging
fund falls below the five-million-dollar maintenance level, the
Corporation Commission shall notify the Tax Commission that the
plugging fund has fallen below the required maintenance level and
that the excise tax which has been levied by su bsection A of Section
1101 of Title 68 of the Oklahoma Statutes and subsec tion A of
Section 1102 of Title 68 of the Oklahoma Statutes which is credited
and apportioned to the Corporation Commission Plugging Fund pursuant
to Section 1103 of Title 68 of the Oklahoma Statutes is to be
imposed. Such additional excise tax shall be i mposed and collected
until such time as is necessary to mee t the additional five-million-
dollar maintenance level. The Tax Commission shall notify the
persons responsible for paymen t of the excise tax on oil an d gas of
the imposition of such tax. The pro visions of this subsection shall
terminate on July 1, 2021 2026.
SECTION 2. AMENDATORY 68 O.S. 2011, Section 1101, as
amended by Section 2, Chapter 153, O.S.L. 2016 (68 O.S. S upp. 2020,
Section 1101), is amended to read as follows :
Section 1101. A. Prior to July 1, 2021 2026, and as provided
in Section 1103.1 of this title, there is hereby levied, in addition
to the gross production tax, an excise tax equal to ninety -five one
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thousandths of one percent (.095 of 1%) of the gross v alue on each
barrel of petroleum oil produced in the State of Oklahoma this state
which is subject to gross production tax in the State of Oklahoma
this state. Such excise tax of ninety -five one thousandths of one
percent (.095 of 1%) of the gross value shall be reported to and
collected by the Tax Commission at the same time and in the same
manner as is provided b y law for the collection of gross production
tax on petroleum oil. On petroleum oil sold at the time of
production, the excise tax thereon shall be paid by the purchaser,
who is hereby authorized to deduct in making settlement with the
producer and/or royalty owner the amount of tax so paid; provided,
that in the event oil on which such tax becomes due is not sold at
the time of production, but is retained by the producer, the tax on
such oil not so sold shall be paid by the pr oducer, including the
tax due on royalty oil not sold; and provided, further, that in
settlement with royalty owner, such producer shall have the righ t to
deduct the amount of tax so paid on royalty oil, or to deduct
therefrom royalty oil equivalent in val ue at the time such tax
becomes due with the amount of tax paid.
The provisions of this subsection shall terminate on June 30,
2021 2026.
B. Beginning on July 1, 2021 2026, there is hereby levied, in
addition to the gross production tax, an excise tax equal to eighty-
five one thousandths of one percent (.085 of 1%) of the gross value
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on each barrel of petroleum oil produced in the State of Oklahoma
this state which is subject to gross production tax in the State of
Oklahoma this state. Such excise tax of eighty -five one thousandths
of one percent (.085 of 1 %) of the gross value shall be reported to
and collected by the Tax Commission at the same time and in the same
manner as is provided by law for the collection of gross production
tax on petroleum oil. On petroleum oil sold at the time of
production, the excise tax thereon shall be paid by the purchaser,
who is hereby authorized to deduct in making settlement with the
producer and/or royalty owner th e amount of tax so paid; provided,
that in the event oil on which such tax beco mes due is not sold at
the time of production, but is retained by the producer, the tax on
such oil not so sold shall be paid by the producer , including the
tax due on royalty o il not sold; and provided, further, that in
settlement with royalty owner, such producer shall have the righ t to
deduct the amount of tax so paid on royalty oil, or to deduct
therefrom royalty oil equivalent in value at the tim e such tax
becomes due with the amount of tax paid.
SECTION 3. AMENDATORY 68 O.S. 2011, Section 1102, as
amended by Section 3, Chapter 153, O.S.L. 2016 (68 O.S. Supp. 2020,
Section 1102), is amended to read as follows:
Section 1102. A. Prior to July 1, 2021 2026, and as provided
in Section 1103.1 of this title, there is hereby levied, in addition
to the gross production tax, an excise tax equal to ninety -five one
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thousandths of one percent ( .095 of 1%) of the gross value of all
natural gas and/or casinghead gas produced in the State of Oklahoma
this state which is subject to gross production tax i n the State of
Oklahoma this state. Such excise tax of ninety -five one thousandths
of one percent (.095 of 1%) of the gross value shall be reported to
and collected by the Tax Commission at the same time and in the same
manner as is provided by law for the collectio n of gross production
tax on natural gas and/or casinghead gas, and this excise tax shall
apply in all cases where the gross production tax provided for by
law applies to the production of natural gas and/or casinghead gas.
The excise tax shall be paid by the purchaser, who is hereby
authorized to deduct in making settlement with the producer and/or
royalty owner the amount of tax so paid,; provided, however, that if
such natural gas and/or casinghead gas is retained by the producer,
then the tax shall be p aid by the producer, who shal l have the right
to deduct the amount of tax so paid on royalty gas at the time of
settlement with the royalty owner.
The provisions of this subsection shall terminate on June 30,
2021 2026.
B. Beginning on July 1, 2021 2026, there is hereby levied, in
addition to the gross production tax, an excise tax equal to eighty -
five one thousandths of one percent (.085 of 1%) of the gross value
of all natural gas and/or casinghead gas produced in the State of
Oklahoma this state which is subject to gross production tax in the
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State of Oklahoma this state. Such excise tax of eighty -five one
thousandths of one percent (.085 of 1%) of the gross value sha ll be
reported to and collected by the Tax Commission at the same time and
in the same manner as is provided by law for the collection of gr oss
production tax on natural gas and/or casinghead gas, and this excise
tax shall apply in all cases where the gros s production tax provided
for by law applies to the production of natural gas and/or
casinghead gas. The excis e tax shall be paid by the pu rchaser, who
is hereby authorized to deduct in making settlement with th e
producer and/or royalty owner the amount o f tax so paid,; provided,
however, that if such natural gas and/or casinghead gas is retained
by the producer, then the tax shall be paid by the producer, who
shall have the right to deduct the amount of tax so p aid on royalty
gas at the time of settlement with the royalty owner .
SECTION 4. AMENDATORY 68 O.S. 2011, Section 1103, as
last amended by Section 4, Chapter 153 , O.S.L. 2016 (68 O.S. Supp.
2020, Section 1103), is amended to read a s follows:
Section 1103. A. 1. Prior to Jul y 1, 2021 2026, and as
provided in Section 1103.1 of this title, all monies derived from
the levy of the excise tax on petroleum oil provided for by Section
1101 of this title sh all be deposited with the State Treasurer, who
shall credit and apportion the same as follows:
a. eighty-two and six hundred thirty -four thousandths
percent (82.634%) of said excise tax shal l be credited
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to the General Revenue Fund of the State Treasury;
provided, in each fiscal year beg inning on or after
July 1, 2013, the first One Million Three Hundred
Fifty Thousand Dollars ($1,350,000.00) which would
otherwise have been apportioned to the General Revenue
Fund pursuant to this subparagraph shall be
transferred to the Oil and Gas Divisi on Revolving Fund
of the Oklahoma Corporation Commission,
b. ten and five hundred twenty -six thousandths percent
(10.526%) shall be credited and apportioned t o a
separate and distinct fun d to be known as the
“Corporation Commission Plugging Fund ”, and
c. the remaining six and eighty -four hundredths percent
(6.84%) of said excise tax shall be credited and
apportioned to a separate and distinct fund to be
known as “The Interstate Oil Compact Fund of
Oklahoma”, which fund is hereby created.
2. Prior to July 1, 2021 2026, and as provided in Section
1103.1 of this title, all monies derived from the levy of the excise
tax on natural gas and/or casinghead gas provided for by Section
1102 of this title shall be deposited with the State Tr easurer, who
shall credit and apportion the same as follows:
a. eighty-two and six thousand forty -five ten thousandths
percent (82.6045%) of said excise tax shall be
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credited to the Gene ral Revenue Fund of the State
Treasury; provided, in each fiscal year beginning on
or after July 1, 2013, the first One Million Three
Hundred Fifty Thousand Dollars ($1,350,000.00) which
would otherwise have been apportioned to the General
Revenue Fund pursuant to this subparagraph sh all be
transferred to the Oil and Gas Div ision Revolving Fund
of the Oklahoma Corporation Commission,
b. ten and five thousand five hundred fifty -five ten
thousandths percent (10.5555%) shall be credited and
apportioned to the Corporation Commission Pluggi ng
Fund, and
c. six and eighty-four hundredths percent (6.84%) of sa id
excise tax shall be credited and apportione d to The
Interstate Oil Compact Fund of Oklahoma.
3. Prior to July 1, 2021 2026, and as provided in Section
1103.1 of this title, all monies t o accrue to “The Interstate Oil
Compact Fund of Oklahoma” under the provisions of this article,
together with all monies remaining unexpended in “The Interstate Oil
Compact Fund of Oklahoma ” created under this subsection are he reby
appropriated and shall b e used for the payment of the compensation
of the assistant represe ntative of the State of Oklahoma on “The
Interstate Oil Compact Commission ”, the compensation of such
clerical, technical, and legal assistants as he or she may with the
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consent of the Governor employ; the actual and necessary traveli ng
expenses of the assistant representative and employees, and of th e
Governor when traveling in the Governor ’s capacity as official
representative of the State of Oklahoma on “The Interstate Oil
Compact Commission”; all items of office expense , including the cost
of office supplies and equipment; such contributions as the Governor
shall deem necessary and proper to pay to “The Interstate Oil
Compact Commission” to defray its expenses ; and such other necessary
expenses as may be incurred in enabling the Sta te of Oklahoma to
fully cooperate in accomplishing the objects of th e Interstate
Compact to conserve oil and gas. The fund shall be disbursed by the
State Treasurer upon sworn, item ized claims approved by the
assistant representative and the Governor; pro vided, that if at the
end of any fiscal year any part of the special fund shall remain
unexpended, such balance shall be transferred by the State Treasurer
to, and become a part of, the General Revenue Fund of t he state for
the ensuing fiscal year. Provid ed, further, that if t he State of
Oklahoma withdraws from the Inters tate Compact to conserve oil and
gas, any unencumbered monies in “The Interstate Oil Compact Fund of
Oklahoma” shall be transferred to and beco me a part of the General
Revenue Fund of the State Treasury and the reafter the excise tax on
petroleum oil, natur al gas and/or casinghead gas levied by this
article shall be levied, collected and deposited in the General
Revenue Fund of the State Treasury.
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4. All monies to accrue to the Corporation Commission Plugging
Fund are hereby appropriated and shall be used f or payment of
expenses related to the statutory purpose of the fund.
The provisions of this subsection shall termi nate on June 30,
2021 2026.
B. 1. Beginning on July 1, 2021 2026, all monies derived from
the levy of the excise tax on petroleum oil provid ed for by Section
1101 of this title shall be deposited with the State Treasurer, who
shall credit and apportion the same as follows:
a. ninety-two and thirty-five hundredths percent (92.35%)
of said excise tax shall be credited and apportioned
to the General Revenue Fund of the State Treasury;
provided, in each fiscal year beginning on or after
July 1, 2013, the first One Million Three Hundred
Fifty Thousand Dollars ($1,350,000.00) which would
otherwise have been apportioned to the General Revenue
Fund pursuant to this subparagraph shall be
transferred to the Oil and Gas Division Revolving Fund
of the Oklahoma Corporati on Commission, and
b. the remaining seven and sixty -five hundredths percent
(7.65%) of said excise tax shall be credited and
apportioned to a separate and distinct fund to be
known as “The Interstate Oil Compact Fund of
Oklahoma”, which fund is hereby crea ted.
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2. Beginning on July 1, 2021 2026, all monies derived from the
levy of the excise tax on natural gas and/or casinghead gas provided
for by Section 1102 of this title shall be deposited with the State
Treasurer, who shall credit and apportion the same as follows:
a. ninety-two and thirty-five hundredths percent (92.35%)
of said excise tax shall be credited and apportioned
to the General Revenue Fund of the State Treasury;
provided, in each fiscal year beginning on or after
July 1, 2013, the first One Mi llion Three Hundred
Fifty Thousand Dollars ($1,350,000.00) which would
otherwise have been apportioned to the General Revenue
Fund pursuant to this subparagraph shall be
transferred to the Oil and Gas Division Revolving Fund
of the Oklahoma Corporation Com mission, and
b. seven and sixty-five hundredths percent (7.65%) of
said excise tax shall be credited and apportioned to
The Interstate Oil Compact Fund of Oklahoma.
3. Beginning on July 1, 2021 2026, all monies to accrue to “The
Interstate Oil Compact Fund of Oklahoma” under the provisions of
this article, together with all monies remaining une xpended in “The
Interstate Oil Compact Fund of O klahoma” created under this
subsection are hereby appropriated and shall be used for the payment
of the compensation o f the assistant representativ e of the State of
Oklahoma on “The Interstate Oil Compact Com mission”, the
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compensation of such clerical, tec hnical, and legal assistants as he
or she may with the consent of the Governor employ; the actual and
necessary traveling expenses of the assistant representative and
employees, and of the Governor when trave ling in the Governor’s
capacity as official repr esentative of the State of Oklahoma on “The
Interstate Oil Compact Commission ”; all items of office expense ,
including the cost of office supplies and equipment; such
contributions as the Governor shall deem necessary and proper to pay
to “The Interstate Oil Compact Commission ” to defray its expenses;
and such other necessary expenses as may be incurred in enabling the
State of Oklahoma to fully coop erate in accomplishing the objects of
the Interstate Compact to conserve oil and gas. The fund shall be
disbursed by the State Treasurer upon sworn, itemized claims
approved by the assistant representative and the Governor; pr ovided,
that if at the end of any fiscal year any part of the special fund
shall remain unexpended, such balance shall be transferred by t he
State Treasurer to, and become a part of, the General Revenue Fund
of the State Treasury for the ensuing fiscal yea r. Provided,
further, that if the State of Oklahoma withdraws from the Interstate
Compact to conserve oil and gas, any unencumbered monie s in “The
Interstate Oil Compact Fund of Oklahoma ” shall be transferred to and
become a part of the General Revenue Fu nd of the State Treasury and
thereafter the excise tax on petroleum oil, natural gas and/o r
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casinghead gas levied by this article shall be levied, collected and
deposited in the General Revenue Fund of the State Treasury .
SECTION 5. This act shall become effective J uly 1, 2021.
SECTION 6. It being immediately nec essary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after i ts passage and approval.
58-1-2124 APW 5/14/2021 12:52:10 PM