OklahomaOklahoma law ties well tax refunds to recycled water use
Starting January 1, 2027, Oklahoma well operators could receive production-tax refunds based on the share of recycled water used to finish their wells.
What it does
Starting January 1, 2027, wells finished using recycled water would qualify for production-tax refunds for 24 months from first sales. Refunds depend on the recycled-water share and a statewide yearly cap.
Argument forTying tax refunds to the share of recycled water used could encourage well operators to reuse treated oil and gas wastewater.
Argument againstThe yearly refund cap could leave eligible operators receiving less than expected when total claims exceed $10 million.
More detail
Eligible operators and owners would receive refunds of taxes on oil and gas production from wells finished using recycled water. The exemption covers oil and gas production from wells completed using recycled water. The exempt share matches the share of recycled water used to finish the well. This means oil and gas wastewater treated for reuse. Applicants need Tax Commission approval after the Oklahoma Corporation Commission determines eligibility. Claims are limited to operators or owners with a recorded working interest at the time of production. Refunds are capped at $10 million statewide each fiscal year. Claims above that cap receive proportionally smaller refunds. A well cannot receive both the recycled-water and recovery-project exemptions together. It may qualify for the recovery-project exemption after the recycled-water exemption expires. The act takes effect January 1, 2027. The exemption lasts 24 months from first sales.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- May 12Approved by Governor Kevin Stitt 05/12/2026Became Law
- May 6Sent to GovernorTo Governor
- May 6Enrolled measure signed, returned to House
- May 6Enrolled, signed, to Senate
- May 5Referred for enrollment
- Vote recorded Third Reading. Result: pass.Upper
- May 5Engrossed measure signed, returned to HouseMajor
- May 5Measure passed: Ayes: 40 Nays: 5Major
- May 5General Order, Considered
- Apr 15Placed on General Order
- Apr 13Reported Do Pass Revenue and Taxation committee; CR filedMinor
- Vote recorded Do Pass. Result: pass.Upper
- Apr 9Referred to Revenue and TaxationMinor
- Vote recorded Do Pass. Result: pass.Upper
- Apr 9Reported Do Pass Energy committee; CR filedMinor
- Apr 1Second Reading referred to Energy Committee then to Revenue and Taxation CommitteeMinor
- Mar 25First ReadingMinor
- Mar 25Engrossed, signed, to SenatePassed Senate
- Mar 24Referred for engrossment
- Vote recorded Third Reading. Result: pass.Lower
- Mar 24Third Reading, Measure passed: Ayes: 81 Nays: 11Passed House
- Mar 24General Order
- Feb 25Authored by Senator Thompson (principal Senate author)
- Feb 25CR; Do Pass, amended by committee substitute Appropriations and Budget CommitteeMinor
- Feb 24
- Vote recorded Appropriations And Budget Committee: Do Pass As Amended By Cs. Result: pass.Lower
- Feb 18Referred to Appropriations and BudgetMinor
- Feb 18Withdrawn from Rules Committee
- Feb 3Second Reading referred to RulesMinor
- Feb 2Authored by Representative Caldwell (Trey)
- Feb 2First ReadingIntroduced
Taxes & BudgetEnvironment & Energy