1. (a) Applicable operations. The provisions of this Section establish criteria for designating enhanced recovery methods on a spacing unit or lease, beginning July 1, 2006, for the purpose of an exemption from sales taxes levied on electricity sold to an oil and gas operator for such operations.

2. (b) Application to the Oklahoma Corporation Commission. An operator seeking the designation of enhanced recovery methods on a spacing unit or lease pursuant to this Part shall file an application with the Corporation Commission on a Form 1535 for a determination that the operations qualify for the exemption, as provided in 68 O.S. §1357(35). The operator shall attach to the Form 1535 a copy of the following information:

   1. (1) Production test or other appropriate data showing the total content of oil recovered after the use of enhanced recovery methods does not exceed one percent (1%) by volume. For this purpose, a Corporation Commission Form 1535 may be filed with the sales tax exemption application to demonstrate the daily rate and total content of oil recovery by volume from the spacing unit or lease prior to use of enhance recovery methods.
   2. (2) Geological structure and isopach maps for the producing formation and any additional engineering and geological data or information deemed necessary by the Conservation Division to evaluate the application.
   3. (3) A map and schematic diagram of the producing wells, underground injection or disposal wells, and other water injection or circulating equipment associated with the enhanced recovery methods on a spacing unit or leased covered by the application.

3. (c) Administrative approval and determination.

   1. (1) If the application is administratively approved, a copy shall be forwarded to the operator.
   2. (2) To obtain the tax exemption, the operator should contact the Director's Office, Taxpayer Assistance Division, Oklahoma Tax Commission, 2501 N. Lincoln Blvd., Oklahoma City, OK 73194.
   3. (3) Any data, maps and other information submitted with the Form 1535 for designation that enhanced recovery methods on a spacing unit or lease qualify for the exemption provided in this Part shall be held as confidential information by the Conservation Division and Corporation Commission, and upon approval of the application, shall be returned to the applicant or destroyed.

Added at 23 Ok Reg 2229, eff 7-1-06

Amended at 25 Ok Reg 2187, eff 7-11-08

Amended at 36 Ok Reg 534, eff 8-1-19