An act relating to local government funding options, the official text

STATE OF OKLAHOMA

2nd Session of the 60th Legislature (2026)

HOUSE BILL 3559  By: Eaves

                                     AS INTRODUCED

An Act relating to local government funding options;
authorizing county to call for an election regarding
the tax of rock, gravel, granite, sand and limestone
upon its severance; providing exception for materials
extracted on private property by natural persons;
providing exception for limestone extracted for
agricultural purposes; requiring voter approval
before levying of tax; specifying time period before
subsequent special election can be called under
certain circumstances; providing effective date for
tax levy or change in tax rate; requiring designation
of purpose for tax and specifying purposes;
specifying disposition of funds; providing for
duration of tax; requiring Oklahoma Tax Commission to
provide certain notice; modifying effective date of
rate change under specified circumstances;
authorizing certain contract between county and Tax
Commission and providing contract criteria;
authorizing Tax Commission to charge specified fee;
requiring initiative petitions be in compliance with
specified statutes; mandating specified procedures;
setting time period during which election shall be
held; providing for certain credit based on sales tax
treatment; providing for apportionment of revenues to
municipalities under certain circumstances;
prohibiting counties from imposing certain fees,
charges, assessments or related costs; providing for
codification; and providing an effective date.

Req. No. 13859                                         Page 1
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

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

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

is created a duplication in numbering, reads as follows:

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

upon the severance of rock, gravel, granite, sand, limestone or any

other natural materials mined for purposes of producing aggregate

within the territorial limits of the county by any lawfully

recognized for-profit business entity in an amount specified in the

special election called as provided herein.

B. No severance tax shall be applicable to aggregates extracted

by an individual person or persons from real property owned by such

person or persons and not sold for profit.

C. No severance tax shall be applicable to limestone extracted

for agricultural purposes.

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

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

registered voters of the county voting thereon at a special election

called by the board of county commissioners or by an initiative

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

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

general election. The question submitted shall be limited to the

purposes described by subsection G of this section. However, if a

majority of the registered voters of a county voting fail to approve

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such a tax, the board of county commissioners shall not call another
special election for such purpose for six (6) months.

       E. Any tax levied or any change in the rate of a tax levied
pursuant to the provisions of this section shall become effective on
the first day of the calendar quarter following approval by the
voters of the county unless another effective date, which shall also
be on the first day of a calendar quarter, is specified in the
ordinance or resolution levying the tax or changing the rate of the
tax. The county may approve a severance tax up to fifteen cents
($0.15) per ton on the production of rock, gravel, granite, sand and
limestone.

       F. Any severance tax which may be levied by a county shall be
designated for a specific or general purpose by a majority vote of
the board of county commissioners or as stated by initiative
petition. The county shall identify the purpose of the severance
tax when it is presented to the voters pursuant to the provisions of
subsection A of this section.

       G. Except as provided by Section 2 of this act, the proceeds of
any severance tax levied by a county shall be deposited in the
county general fund and shall be used for any roads and bridges but
shall not be used for salaries or other forms of employee
compensation and may only be used for construction or improvement of
roads and bridges.

Req. No. 13859  Page 3
       H. The life of a tax levied pursuant to the provisions of this
section may be limited or unlimited in duration. The county shall
identify the duration of the tax when it is presented to the voters
pursuant to the provisions of subsection A of this section.

       I. The Oklahoma Tax Commission shall give notice to all
relevant taxpayers of a rate change at least sixty (60) days prior
to the effective date of the rate change. Failure to give notice as
required by this section shall delay the effective date of the rate
change to the first day of the next calendar quarter. The board of
county commissioners of a county levying a tax pursuant to the
provisions of this section and the Tax Commission are authorized to
enter into a contract whereby the Tax Commission shall have
authority to assess, collect and enforce the tax and any penalties
or interest thereon levied by the county and to remit the same to
the county. Such authority shall apply to any tax levied pursuant
to this section and penalty or interest liability existing at the
time of contracting. Upon contracting, the Tax Commission shall
have the power of enforcement of the tax, penalties or interest that
are vested in the county. The contract shall provide for the
assessment, collection and enforcement of the tax, penalties or
interest in the same manner as the administration, collection or
enforcement of the state gross production tax by the Tax Commission.
For providing such assistance, the Tax Commission shall charge the

Req. No. 13859  Page 4
county a fee of one-half of one percent (1/2 of 1%) of the gross

collection proceeds.

J. Initiative petitions calling for a special election

concerning county severance tax proposals shall be in accordance

with Sections 2, 3, 3.1, 6, 18 and 24 of Title 34 of the Oklahoma

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

clerk for approval as to form prior to circulation. Following

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

required signatures. After securing the requisite number of

signatures, the petitioner shall submit the petition and signatures

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

county clerk shall present the petition to the board of county

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

days of the board of county commissioners receiving the petition

from the county clerk.

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

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

is created a duplication in numbering, reads as follows:

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

charged, collected and remitted to the county where the materials

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

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

of origin.

Req. No. 13859                                                  Page 5
       B. All materials sold to a tax-exempt entity where no sales tax
is collected shall be subject to the severance tax.

       C. If the mining or extracting of aggregates takes place within
the incorporated area of a municipality, fifty percent (50%) of the
revenue derived from the mining or extracting of aggregates which
occurs within such incorporated municipal area from a severance tax
levy imposed by a county pursuant to Section 1 of this act shall be
apportioned to the general revenue fund of the municipality and
fifty percent (50%) of the revenue shall be apportioned to the
county as provided by subsection F of Section 1 of this act.

       D. No county that receives revenue from a severance tax levy on
aggregates as authorized by this act shall impose any fee, charge,
assessment or other cost for the privilege of engaging in the mining
or extraction of aggregates.

       SECTION 3. This act shall become effective November 1, 2026.

60-2-13859      MAH  01/05/26

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