Section 55007. The Legislature hereby finds that the reduction of emissions from upstream and, midstream, and downstream oil and gas production, exploration, completions, gatherings, storage, processing, refining, distribution, and transmission activities serves the interests of the citizens of Oklahoma and such emission reduction activities with new and innovative technologies should be encouraged and incentivized.

Section 55008. As used in the Oklahoma Emission Reduction Technology Incentive Act, “Emission Reduction Project” means and includes, but is not limited to:

1. Existing and new technology projects that reduce on-site emissions of regulated pollutants or carbon oxides from stationary sources; and

2. Existing and new technology projects that reduce emissions from upstream and, midstream, and downstream oil and gas exploration, production, completions, gathering gatherings, storage, processing, refining, distribution, and transmission activities through the following:

Section 55009. A. Upon the effective date of this act July 1, 2022, there is hereby created the Oklahoma Emission Reduction Technology Rebate Program. There is hereby created a rebate in the amount of up to twenty-five percent (25%) of documented expenditures made in this state directly attributable to the implementation of a qualified Emission Reduction Project.

B. The rebate program shall be administered by the Department of Environmental Quality and the Oklahoma Tax Commission, as provided in the Oklahoma Emission Reduction Technology Incentive Act.

C. To be eligible for a rebate payment:

1. The applicant responsible for the implementation of a qualified Emission Reduction Project in this state shall submit documentation to the Department of Environmental Quality no later than six (6) months after the end of the fiscal year in which the expenditures were made stating the amount of expenditures made in this state directly related to the implementation of the qualified Emission Reduction Project. The Department of Environmental Quality shall additionally establish a process whereby an applicant may submit a payment for approval prior to the expenditure of funds. Any approval through this alternative process shall be subject to final approval as determined necessary by the Department of Environmental Quality;

2. The applicant has filed all Oklahoma tax returns and tax documents which are required by the laws of this state; and

3. The applicant shall provide evidence of a certificate of general liability insurance with a minimum coverage of One Million Dollars ($1,000,000.00) and a workers' compensation policy pursuant to the laws of this state which shall include coverage of employer's liability.

D. The Department of Environmental Quality shall approve or disapprove all claims for a rebate payment and shall notify the Oklahoma Tax Commission. The Tax Commission shall, upon notification of approval from the Department of Environmental Quality, issue a rebate payment for all approved claims from funds in the Oklahoma Emission Reduction Technology Upstream and Midstream Incentive Revolving Fund created in Section 5 of this act and the Oklahoma Emission Reduction Technology Downstream Incentive Revolving Fund, both created in Section 55010 of this title. If the amount of the approved claims exceeds the amount available in either fund, during a fiscal year, payments shall be made proportionally to all the parties making a claim prior to the deadline which is approved by the Department of Environmental Quality. Rebate payments from the fund shall not exceed Ten Million Dollars ($10,000,000.00) in any fiscal year. If the amount of approved claims exceeds the amount specified in this subsection in a fiscal year, payments shall be made proportionately to all of the parties making a claim prior to the deadline which is approved by the Department of Environmental Quality with the amount to be paid to each approved party being product of the individual claim amount times the percentage resulting from Ten Million Dollars ($10,000,000.00) divided by the total amount of approved claims for the period. If an approved claim is not paid in whole or in part, the unpaid claim or unpaid portion shall be paid in the following fiscal years in the order in which the claims are approved by the Department.

E. Approved claims for rebate that exceed the balance of the Oklahoma Emission Reduction Technology Upstream and Midstream Incentive Revolving Fund created in Section 5 of this act and the Oklahoma Emission Reduction Technology Downstream Incentive Revolving Fund, both created in Section 55010 of this title may be paid in part and the unpaid portion shall be paid upon the applicable fund reaching a sufficient balance in the order in which the claims are approved by the Department.

Section 55010. A. There is hereby created in the State Treasury a revolving fund for the Oklahoma Tax Commission to be designated the “Oklahoma Emission Reduction Technology Upstream and Midstream Incentive Revolving Fund”. The fund shall be a continuing fund, not subject to fiscal year limitations, and shall consist of all monies received by the Tax Commission from any public or private donations, contributions, and gifts received for the benefit of the fund and any amounts appropriated by the Oklahoma Legislature designated for deposit in the fund. All monies accruing to the credit of the fund are hereby appropriated and may be budgeted and expended by the Tax Commission for the purpose of paying rebates for emission reduction projects, except for projects pertaining to refining activities, as provided in this act the Oklahoma Emission Reduction Technology Incentive Act. Expenditures from the fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of the Office of Management and Enterprise Services for approval and payment. Any remaining unencumbered balance upon the cessation of the Oklahoma Emission Reduction Technology Rebate Program, as provided in Section 7 55012 of this act title, shall be transferred to the General Revenue Fund of the State of Oklahoma this state.