An act relating to revenue and taxation, the official text

1                            STATE OF OKLAHOMA

2   1st Session of the 60th Legislature (2025)

3 HOUSE BILL 1146                 By: Humphrey

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6                            AS INTRODUCED

7   An Act relating to revenue and taxation; authorizing

    county to call an election for taxing certain

8   materials upon severance; providing exceptions;

    stating persons who may call election; requiring

9   voter approval of tax; requiring county to identify

    purpose of tax; providing for subsequent election

10  within certain time period if question fails;

    providing effective date of approved levy or change

11  in tax rate; providing maximum tax rate that may be

    approved; providing apportionment of tax to specific

12  funds; requiring certain notice by Oklahoma Tax

    Commission; authorizing certain contract for

13  specified purposes; providing certain contractual

    powers of Tax Commission; providing certain terms of

14  contract; providing procedures for initiative

    petition for severance tax; providing certain tax

15  credit; prohibiting certain penalty by county for

    specified privilege; providing for codification; and

16  providing an effective date.

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19 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

20  SECTION 1.      NEW LAW  A new section of law to be codified

21 in the Oklahoma Statutes as Section 1001.5 of Title 68, unless there

22 is created a duplication in numbering, reads as follows:

23  A. Any county of this state is hereby authorized to levy a tax

24 upon the severance of all materials which are surface mined, not

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1 including coal, for purposes of producing aggregate within the

2 territorial limits of the county by any lawfully recognized for-

3 profit business entity in an amount specified in the special

4 election called as provided herein.

5   B. No severance tax shall be applicable to:

6   1. Materials extracted by an individual person or persons from

7 real property owned by such person or persons and not sold for

8 profit; or

9   2. Limestone extracted for agricultural purposes.

10  C. Sales of sand for use in hydraulic fracturing operations and

11 sales of materials to be used by individuals for the production of

12 goods within this state shall be exempt from any severance tax

13 levied pursuant to this section. In order to administer the

14 exemptions for sales provided in this subsection, there shall be

15 made a severance tax refund for severance taxes paid. Refunds shall

16 be made in a manner prescribed by the county which levies the tax.

17  D. Before a severance tax may be levied by the county, the

18 imposition of the tax shall first be approved by a majority of the

19 registered voters of the county voting thereon at a special election

20 called by the board of county commissioners or by an initiative

21 petition signed by not less than five percent (5%) of the registered

22 voters of the county who were registered at the time of the last

23 general election. The question submitted shall be limited to the

24 purposes described by subsection F of this section and shall be

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1 stated on the initiative petition. The county shall identify the

2 purpose of the severance tax when it is presented to the voters

3 pursuant to the provisions of this section. However, if a majority

4 of the registered voters of a county voting fail to approve such a

5 tax, the board of county commissioners shall not call another

6 special election for such purpose for one (1) year.

7   E. Any tax levied or any change in the rate of a tax levied

8 pursuant to the provisions of this section shall become effective on

9 the first day of the calendar quarter following approval by the

10 voters of the county unless another effective date, which shall also

11 be on the first day of a calendar quarter, is specified in the

12 ordinance or resolution levying the tax or changing the rate of the

13 tax. The county may approve a severance tax up to ten cents ($0.10)

14 per ton on the production of all materials which are surface mined,

15 not including coal.

16  F. The revenues collected by the county from the severance tax

17 which may be levied shall be apportioned as follows:

18  1. Fifty percent (50%) shall be deposited in the county general

19 fund and shall be designated for construction and improvement of

20 county and municipal roads and bridges; and

21  2. Fifty percent (50%) shall be apportioned to the general

22 revenue fund of municipalities within the county on a proportional

23 basis of their population according to the most recent Federal

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    Req. No. 10095                                                 Page 3
1 Decennial Census. Revenues apportioned to the general revenue fund

2 of a municipality shall be designated for infrastructure projects.

3  G. The life of a tax levied pursuant to the provisions of this

4 section may be limited or unlimited in duration. The county shall

5 identify the duration of the tax when it is presented to the voters

6 pursuant to the provisions of this section.

7  H. The Oklahoma Tax Commission shall give notice to all

8 relevant taxpayers of a rate change at least sixty (60) days prior

9 to the effective date of the rate change. Failure to give notice as

10 required by this section shall delay the effective date of the rate

11 change to the first day of the next calendar quarter. The board of

12 county commissioners of a county levying a tax pursuant to the

13 provisions of this section and the Tax Commission are authorized to

14 enter into a contract whereby the Tax Commission shall have

15 authority to assess, collect, and enforce the tax and any penalties

16 or interest thereon levied by the county and to remit the same to

17 the county. Such authority shall apply to any tax levied pursuant

18 to this section and penalty or interest liability existing at the

19 time of contracting. Upon contracting, the Tax Commission shall

20 have the power of enforcement of the tax, penalties, or interest

21 that is vested in the county. The contract shall provide for the

22 assessment, collection, and enforcement of the tax, penalties, or

23 interest in the same manner as the administration, collection, or

24 enforcement of the state gross production tax by the Tax Commission.

   Req. No. 10095                                                  Page 4
1 For providing such assistance, the Tax Commission shall charge the

2 county a fee of one-half of one percent (1/2 of 1%) of the gross

3 collection proceeds.

4   I. Initiative petitions calling for a special election

5 concerning county severance tax proposals shall be in accordance

6 with Sections 2, 3, 6, 18, and 24 of Title 34 of the Oklahoma

7 Statutes. Petitions shall be submitted to the office of the county

8 clerk for approval as to form prior to circulation. Following

9 approval, the petitioner shall have ninety (90) days to secure the

10 required signatures. After securing the requisite number of

11 signatures, the petitioner shall submit the petition and signatures

12 to the county clerk. Following the verification of signatures, the

13 county clerk shall present the petition to the board of county

14 commissioners. The special election shall be held within sixty (60)

15 days of the board of county commissioners receiving the petition

16 from the county clerk.

17  SECTION 2.      NEW LAW  A new section of law to be codified

18 in the Oklahoma Statutes as Section 1001.6 of Title 68, unless there

19 is created a duplication in numbering, reads as follows:

20  A. All materials sold where an appropriate county sales tax was

21 charged, collected, and remitted to the county where the materials

22 were severed shall receive a credit against the severance tax in the

23 same amount of the sales tax portion that was remitted to the county

24 of origin.

    Req. No. 10095                                                 Page 5
1   B. No county that receives revenue from a severance tax levy on

2 materials as authorized by this act shall impose any fee, charge,

3 assessment, or other cost for the privilege of engaging in the

4 mining or extraction of materials.

5   SECTION 3. This act shall become effective November 1, 2025.

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7   60-1-10095      AO  12/31/24

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    Req. No. 10095                                                Page 6