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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
HOUSE BILL 3054 By: Boles
AS INTRODUCED
An Act relating to gross production tax; amending 68
O.S. 2021, Section 1001.1 , which relates to property
exempt from ad valorem taxation due to payment of
gross production tax; modifying exempt property to
include flowlines and gathering lines ; and providing
an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1001.1, is
amended to read as follows:
Section 1001.1 The Oklahoma Tax Commission shall adopt rules
and regulations which establish guidelines for the determination of
property exempt from ad valorem taxation pur suant to the provisions
of subsections G and H of Section 1001 of this title. Said
guidelines shall include, but are not limited to, the following:
1. "Producing leases" means wells or leases or production units
which have had production during any of th e previous three (3)
calendar years which is subject to the gross production tax levied
by Section 1001 of this title and which have not been abandoned or
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required to be plugged as required by law on or before January 1 of
the year for which the assessment or valuation is made;
2. "Payment of gross production tax " means payment of the ta x
levied by Section 1001 of this title on production during any of the
three (3) calendar years immediately prior to January 1 of the year
for which the assessment or valua tion is made; and
3. Property exempt from ad valorem tax pursuant to the
provisions of subsections G and H of Section 1001 of this title
shall include, but is not limited to , lease production tanks, lease
production meters, flowlines and gathering lines going from the
wellhead to the point of custody transfer, and disposal systems,
including all materials and equipment of disposal systems and the
lines transporting the waste materials, serving one or more wells ,
which are not for commercial purposes . Provided, the exemption
shall include the wellbore and non -recoverable down-hole material,
including casing, actually used in the commercial disposal of waste
materials produced with such oil or gas. Such exempt property shall
remain exempt as long as the property is essential to the production
of oil and gas in commercial quantities. The count y assessor shall
be notified when such property becomes nonexempt.
SECTION 2. This act shall become effective November 1, 2024.
59-2-9101 AO 01/10/24