Gross production tax; modifying apportionment of collections for certain fiscal years; modifying apportionment limit. Effective date.
SB 1390 revises Oklahoma’s gross production tax apportionment formulas for oil and natural gas, primarily by changing how collections are divided among the General Revenue Fund, county highway funds, school districts, and several dedicated state funds. The bill updates the statutory language and references in 68 O.S. Section 1004 and adjusts the apportionment percentages tied to different gross production tax rates and fiscal years, including a new long-term structure beginning July 1, 2025 for certain natural gas collections and revised allocations for oil collections.
The measure also creates or continues a special transportation-related destination for a portion of natural gas revenue: the Preserving and Advancing County Transportation Fund. In addition, it preserves funding streams for education, higher education, student aid, county bridge and road improvements, tourism, conservation, and water infrastructure, while capping total annual deposits to several of those dedicated funds at $150 million. Amounts above that cap are redirected to the General Revenue Fund. The bill takes effect November 1, 2026.
SB 1390 amends the state’s gross production tax apportionment statute, changing how oil and gas tax receipts are distributed across state and local funds. It affects the General Revenue Fund, Revenue Stabilization Fund, county highway funds, school district distributions, the Statewide Circuit Engineering District Revolving Fund, and multiple dedicated revolving funds for education, transportation, tourism, conservation, and water projects. The bill also updates fiscal-year references and imposes or maintains caps on certain earmarked deposits, which can shift revenue back to general state operations once those caps are reached.
The available voting record suggests broad support for the bill. It passed the Senate Revenue & Taxation Committee unanimously, cleared the Senate Appropriations Committee unanimously with an amended committee substitute, and later passed the House Appropriations and Budget Transportation Subcommittee and the full House Appropriations and Budget Committee unanimously. The Senate third-reading vote was also favorable, though not unanimous, indicating some broader chamber-level concern or disagreement despite strong committee support.
The main policy tension in SB 1390 is how to balance general state revenue needs against earmarked spending for transportation, education, and other dedicated funds. Supporters appear to favor a revised apportionment structure that preserves funding for counties, schools, and infrastructure while directing excess collections to the General Revenue Fund after certain thresholds are met. Any opposition likely centers on the redistribution of gross production tax receipts, the changing percentages for specific funds, and the long-term cap on deposits to dedicated accounts, which can affect how much money is available for targeted programs versus general government spending.