Another of the new laws recently created by the Oklahoma legislature and signed by Gov. Kevin Stitt is one to help rural communities with road damage caused by heavy trucks in the oil and gas industry.
The governor put his name to House Bill 3037 which creates a $5 million fund to be used by the small towns that cannot afford to pay for the heavy damage from oilfield trucks.
House Bill 3037, authored by House Energy Committee Chair Rep. Brad Boles, R-Marlow, creates the Municipal Road Drilling Activity Revolving Fund.
The fund will receive $5 million annually from funds received by the Oklahoma Dept. of Transportation (ODOT) through sales tax that is already being collected by the Red-Dyed Diesel sales tax. This will not increase the sales tax, but instead re-appropriate $5 million already collected from the Red-Dyed Diesel sales tax each year from the state’s general fund to this newly created municipal road activity revolving fund.
The fund can only be allocated to municipalities with a population of less than 15,000 people and can only be used to repair roads that were damaged as a result of increased use from oil or gas drilling activity. Many of these small communities, especially those located in the Oklahoma SCOOP and STACK drilling plays, have a significant portion of the drilling activity in the state in their backyards but don’t have a large enough sales tax base in their community to repair roads damaged by drilling activity.
“Currently, the whole state benefits from revenue from the gross production tax (GPT) paid by the oil and gas industry. In 2021, approximately $200 million was apportioned to school districts, more than $100 million to county governments for road repairs and over $1 billion in GPT from this industry alone went to the state government,” Boles said. “However, municipalities don’t receive any funds from this tax, so this bill proposes a way for smaller communities with oil and gas activity to apply for an annual grant to repair damage to their local municipal roads caused by the heavy machinery used by this industry.”
The bill requires communities to apply for the money through a grant program managed by ODOT. It requires that the community detail how the roads they want to repair or maintain were damaged by traffic from the oil and gas industry and also come up with a 25% local match.
