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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 3054 By: Boles
COMMITTEE SUBSTITUTE
[ gross production tax – property – ad valorem –
flowlines – gathering lines – effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAH OMA:
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 K and H L 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 gro ss 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 r equired 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 tax
levied by Section 1001 of this title on production during any of the
three (3) calendar years im mediately prior to January 1 of the year
for which the assessment or valua tion is made; and
3. Property exempt from ad valorem tax pursu ant to the
provisions of subsections G K and H L of Section 1001 of this title
shall include, but is not limited to ,:
a. lease production tanks,
b. lease production meters,
c. flowlines and gathering lines going from the wellhead
either to the first sales meter that is the point of
custody transfer or t o the boundary of the production
unit, whichever distance is shorter, and
d. 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 c ommercial
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quantities. The count y assessor shall be notified when such
property becomes nonexempt.
SECTION 2. This act shall become effective November 1, 2024.
59-2-10663 JM 02/29/24