OKLAHOMA SENATE BILL 1577 Oklahoma Governor Mary Fallin signed SB1577 into law on June 6, 2016 and alterations to the Marginal Well Tax Credit took effect July 1, 2016. An Act relating to gross production tax exemption; amending 68 O.S. 2011, Section 1001.3a, as amended by Section 2, Chapter 346, O.S.L. 2014 (68 O.S. Supp. 2015, Section 1001.3a), which relates to exemption for economically at-risk oil or gas leases; modifying definition; defining term; limiting production eligible for exemption; clarifying time period during which refund may be paid; modifying required documentation; deleting time limit for specified determination; providing an effective date; and declaring an emergency. SUBJECT: Gross production tax exemption O.S.L. 2014 (68 O.S. Supp. 2015, Section 1001.3a), is amended to read as follows: Section 1001.3a. A. As used in this section: 1. “Economically Prior to January 1, 2015, “economically at-risk oil or gas lease” means any oil or gas lease operated at a net loss or at a net profit which is less than the total gross production tax remitted for such lease during the previous calendar year; and 2. On or after January 1, 2015, “economically at-risk oil or gas lease” means any oil or gas lease with one or more producing wells with an average production volume per well of ten (10) barrels of oil or sixty (60) MCF of natural gas per day or less operated at a net loss or at a net profit which is less than the total gross production tax B. When certified as such pursuant to the provisions of this section, production from an economical- ly at-risk oil or gas lease shall be eligible for an exemption from the gross production tax levied pursuant to subsection B of Section 1001 of this title for production on such lease during the previous calendar year in the following amounts: 1. If the gross production tax rate levied pursuant to subsection B of Section 1001 of this title was seven percent (7%), then the exemption shall equal six-sevenths (6/7) of the gross production tax levied; 2. If the gross production tax rate levied pursuant to subsection B of Section 1001 of this title was four percent (4%), then the exemption shall equal three-fourths (3/4) of the gross production tax levied; and 3. If the gross production tax rate levied pursuant to subsection B of Section 1001 of this title was one percent (1%) or two percent (2%), no exemption shall apply. C. For all production exempt from gross production taxes pursuant to this section, a refund of gross pro- duction taxes paid for production in the previous calendar year in the amounts specified in this subsection B of section, subject to the limitations specified in subsection D of this section, shall be issued to the well operator or a designee. The For production in calendar years ending on or before December 31, 2015, the refund shall not be claimed until after July 1 of the year subsequent to following the year of production. For production in the calendar year ending December 31, 2016, and each year thereafter, the refund shall be claimed before July 1 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: SECTION 1. AMENDATORY 68 O.S. 2011, Section 1001.3a, as amended by Section 2, Chapter 346, remitted for such lease during the previous calendar year; and 3. “Lease” shall be defined as in Section 1001.2 of this title.
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Na t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r An a l y s t s
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