A. The monies in the Municipal Road Drilling Activity Revolving Fund shall be allocated by the Oklahoma Department of Transportation only to municipalities having a population of less than fifteen thousand (15,000) persons according to the Federal Decennial Census or most recent population estimate to repair damage to municipal roads caused by or reasonably caused by increased use of such roads resulting from oil or gas drilling activity. The damage may be attributable to traffic associated with exploration and drilling activity, completion of an oil or gas well, production from an oil or gas well, servicing during the period of production, repairs or other necessary activity associated with the drilling or production activity, and other actions necessary for the operation or cessation of drilling or production activities.

B. A municipality seeking funds for distribution pursuant to the provisions of Section 2 of this act¹ and this section shall make application to the Oklahoma Department of Transportation on such forms as may be prescribed by the Department for such purpose. The initial application shall be filed not later than May 1, 2023.

C. A municipality shall be required to provide twenty-five percent (25%) of the total project costs in order to be eligible for distribution of funds from the Municipal Road Drilling Activity Revolving Fund.

D. The Department shall review applications in the order in which they are received and shall make distribution of funds based on analysis of considerations of public safety, volume of traffic which contributes to the need for repairs, and such other factors as the Department may determine to be relevant. The initial distribution of funds shall take place not later than October 1, 2023.

E. If the Department determines that the damage to a road has been caused or reasonably has been caused by increased traffic related to oil and gas drilling or production activity as provided by this section, the Department shall transfer the eligible amount of funds to the municipality for deposit into the municipal general fund or such other public fund as the municipality shall specify in its application.

F. Funds distributed pursuant to the provisions of this section shall only be used by a municipality for the repair of roads according to the requirements of this act and shall not be used to construct a new road unless the damage to an existing road has become extensive enough to require such replacement.