STATE OF OKLAHOMA

2nd Session of the 52nd Legislature (2010)

SENATE BILL 2152	By:	Sparks

AS INTRODUCED

An Act relating to revenue and taxation; amending 68 O.S. 2001, Section 1004, as last amended by Section 1, Chapter 305, O.S.L. 2009 (68 O.S. Supp. 2009, Section 1004), which relates to gross production tax; modifying apportionment of gross production taxes; establishing basis for certain determination; creating Revenue Replacement Endowment Fund and providing for funding and purpose; specifying the disposition of income and investment return; requiring State Treasurer to invest Endowment Fund in specified manner and providing exception; creating Revenue Replacement Revolving Fund; providing for nature of revolving fund and providing for transfer of monies into revolving fund; providing for appropriation, budgeting and expenditure of revolving fund; limiting purpose for which specified percentage of revolving fund shall be budgeted and expended; providing procedures for expenditures from revolving fund; authorizing transfer of certain portion of Endowment Fund to Revolving Fund at specified time; requiring State Board of Equalization to make certain certification; providing for codification; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     68 O.S. 2001, Section 1004, as last amended by Section 1, Chapter 305, O.S.L. 2009 (68 O.S. Supp. 2009, Section 1004), is amended to read as follows:
Section 1004.  A.  Beginning July 1, 2002, the gross production tax provided for in Section 1001 of this title is hereby levied and shall be collected and apportioned as follows:
1.  For all monies collected from the tax levied on asphalt or ores bearing uranium, lead, zinc, jack, gold, silver or copper:
a.	eighty-five and seventy-two one-hundredths percent (85.72%) shall be paid to the State Treasurer of the state to be placed in the General Revenue Fund of the state and used for the general expense of state government, to be paid out pursuant to direct appropriation by the Legislature,
b.	seven and fourteen one-hundredths percent (7.14%) of the sum collected from natural gas and/or casinghead gas or asphalt or ores bearing uranium, lead, zinc, jack, gold, silver or copper shall be paid to the various county treasurers to be credited to the County Highway Fund as follows:  Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
c.	seven and fourteen one-hundredths percent (7.14%) shall be allocated to each county as provided for in subparagraph b of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
2.  For all monies collected from the tax levied on natural gas and/or casinghead gas at a tax rate of seven percent (7%) pursuant to the provisions of subsection B of Section 1001 of this title:
a.	eighty-five and seventy-two one-hundredths percent (85.72%) shall be paid to the State Treasurer of the state to be placed in the General Revenue Fund of the state and used for the general expense of state government, to be paid out pursuant to direct appropriation by the Legislature,
b.	seven and fourteen one-hundredths percent (7.14%) of the sum collected from natural gas and/or casinghead gas shall be paid to the various county treasurers to be credited to the County Highway Fund as follows:  Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
c.	seven and fourteen one-hundredths percent (7.14%) shall be allocated to each county as provided for in subparagraph b of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
3.  For all monies collected from the tax levied on natural gas and/or casinghead gas at a tax rate of four percent (4%) pursuant to the provisions of subsection B of Section 1001 of this title:
a.	seventy-five percent (75%) shall be paid to the State Treasurer of the state to be placed in the General Revenue Fund of the state and used for the general expense of state government, to be paid out pursuant to direct appropriation by the Legislature,
b.	twelve and one-half percent (12.5%) of the sum collected from natural gas and/or casinghead gas shall be paid to the various county treasurers to be credited to the County Highway Fund as follows:  Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
c.	twelve and one-half percent (12.5%) shall be allocated to each county as provided for in subparagraph b of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
4.  For all monies collected from the tax levied on natural gas and/or casinghead gas at a tax rate of one percent (1%) pursuant to the provisions of subsection B of Section 1001 of this title:
a.	fifty percent (50%) of the sum collected from natural gas and/or casinghead gas shall be paid to the various county treasurers to be credited to the County Highway Fund as follows:  Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
b.	fifty percent (50%) shall be allocated to each county as provided for in subparagraph a of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
5.  For all monies collected from the tax levied on oil at a tax rate of seven percent (7%) pursuant to the provisions of subsection B of Section 1001 of this title:
a.	twenty-five and seventy-two one-hundredths percent (25.72%) shall be paid to the State Treasurer to be placed in the Common Education Technology Revolving Fund created in Section 41.29c of Title 62 of the Oklahoma Statutes,
b.	twenty-five and seventy-two one-hundredths percent (25.72%) shall be paid to the State Treasurer to be placed in the Higher Education Capital Revolving Fund created in Section 41.29d of Title 62 of the Oklahoma Statutes,
c.	twenty-five and seventy-two one-hundredths percent (25.72%) shall be paid to the State Treasurer to be placed in the Oklahoma Tuition Scholarship Revolving Fund created in Section 41.29e of Title 62 of the Oklahoma Statutes,
d.	four and twenty-eight one-hundredths percent (4.28%) shall be paid to the State Treasurer to be apportioned to the County Bridge and Road Improvement Fund of the State Treasury,
e.	four and twenty-eight one-hundredths percent (4.28%) shall be paid to the State Treasurer to be apportioned to:
(1)	the following sources and in the following amounts through the fiscal year ending June 30, 2014:
(a)	thirty-three and one-third percent (33 1/3%) to the Oklahoma Tourism and Recreation Department Capital Expenditure Revolving Fund created pursuant to Section 2254.1 of Title 74 of the Oklahoma Statutes,
(b)	thirty-three and one-third percent (33 1/3%) to the Oklahoma Conservation Commission Infrastructure Revolving Fund created pursuant to Section 3-2-110 of Title 27A of the Oklahoma Statutes, and
(c)	thirty-three and one-third percent (33 1/3%) to the Community Water Infrastructure Development Revolving Fund created pursuant to Section 1085.7A of Title 82 of the Oklahoma Statutes, and
(2)	the Oklahoma Water Resources Board Rural Economic Action Plan Water Projects Fund for the fiscal year ending June 30, 2014, and for each fiscal year thereafter,
f.	seven and fourteen one-hundredths percent (7.14%) of the sum collected from oil shall be paid to the various county treasurers, to be credited to the County Highway Fund as follows:  Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
g.	seven and fourteen one-hundredths percent (7.14%) shall be allocated to each county as provided in subparagraph f of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction, to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
6.  For all monies collected from the tax levied on oil at a tax rate of four percent (4%) pursuant to the provisions of subsection B of Section 1001 of this title:
a.	twenty-two and one-half percent (22.5%) shall be paid to the State Treasurer to be placed in the Common Education Technology Revolving Fund created in Section 41.29c of Title 62 of the Oklahoma Statutes,
b.	twenty-two and one-half percent (22.5%) shall be paid to the State Treasurer to be placed in the Higher Education Capital Revolving Fund created in Section 41.29d of Title 62 of the Oklahoma Statutes,
c.	twenty-two and one-half percent (22.5%) shall be paid to the State Treasurer to be placed in the Oklahoma Tuition Scholarship Revolving Fund created in Section 41.29e of Title 62 of the Oklahoma Statutes,
d.	three and seventy-five one-hundredths percent (3.75%) shall be paid to the State Treasurer to be apportioned to the County Bridge and Road Improvement Fund of the State Treasury,
e.	three and seventy-five one-hundredths percent (3.75%) shall be paid to the State Treasurer to be apportioned to:
(1)	the following sources and in the following amounts through the fiscal year ending June 30, 2014:
(a)	thirty-three and one-third percent (33 1/3%) to the Oklahoma Tourism and Recreation Department Capital Expenditure Revolving Fund created pursuant to Section 2254.1 of Title 74 of the Oklahoma Statutes,
(b)	thirty-three and one-third percent (33 1/3%) to the Oklahoma Conservation Commission Infrastructure Revolving Fund created pursuant to Section 3-2-110 of Title 27A of the Oklahoma Statutes, and
(c)	thirty-three and one-third percent (33 1/3%) to the Community Water Infrastructure Development Revolving Fund created pursuant to Section 1085.7A of Title 82 of the Oklahoma Statutes, and
(2)	the Oklahoma Water Resources Board Rural Economic Action Plan Water Projects Fund for the fiscal year ending June 30, 2014, and for each fiscal year thereafter,
f.	twelve and one-half percent (12.5%) of the sum collected from oil shall be paid to the various county treasurers, to be credited to the County Highway Fund as follows:  Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
g.	twelve and one-half percent (12.5%) shall be allocated to each county as provided in subparagraph f of this paragraph and shall be apportioned on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction, to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction; and
7.  For all monies collected from the tax levied on oil at a tax rate of one percent (1%) pursuant to the provisions of subsection B of Section 1001 of this title:
a.	fifty percent (50%) of the sum collected shall be paid to the various county treasurers, to be credited to the County Highway Fund as follows:  Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
b.	fifty percent (50%) shall be allocated to each county as provided for in subparagraph a of this paragraph and shall be apportioned on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction, to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction.
B.  Provided, notwithstanding any other provision of this section, the total amounts deposited to the Common Education Technology Revolving Fund, the Higher Education Capital Revolving Fund, the Oklahoma Tuition Scholarship Revolving Fund, the Rural Economic Action Plan Water Projects Fund, the Oklahoma Tourism and Recreation Department Capital Expenditure Revolving Fund, the Oklahoma Conservation Commission Infrastructure Revolving Fund and the Community Water Infrastructure Development Revolving Fund pursuant to paragraphs 5 and 6 of this section shall not exceed One Hundred Fifty Million Dollars ($150,000,000.00) in any fiscal year.  All sums in excess of One Hundred Fifty Million Dollars ($150,000,000.00) in any fiscal year which would otherwise be deposited in such funds shall be placed by the State Treasurer in the General Revenue Fund of the state.
C.  Beginning on July 1 of the first year after the average annual index price of Oklahoma gas exceeds Ten Dollars ($10.00) per thousand cubic feet, prior to the apportionment of any tax as provided for in subsection A of this section, five percent (5%) of the gross production tax levied and collected pursuant to Section 1001 of this title shall be paid to the State Treasurer to be placed in the Revenue Replacement Endowment Fund as created in Section 2 of this act.  For purposes of this section, the average annual index price of Oklahoma gas shall be based on the determination made by the Oklahoma Tax Commission pursuant to subparagraph c of paragraph 1 of subsection K of Section 1001 of this title.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 53 of Title 62, unless there is created a duplication in numbering, reads as follows:
A.  There is hereby created an endowment fund to be known as the “Revenue Replacement Endowment Fund”.  The endowment fund principal shall consist of funds apportioned pursuant to subsection C of Section 1004 of Title 68 of the Oklahoma Statutes for the purpose of creating an endowment for the operations of state government.  Notwithstanding any other provisions of law, income and investment return on endowment fund principal shall accrue to the endowment fund.
B.  The Revenue Replacement Endowment Fund shall be invested by the State Treasurer as authorized in Section 89.2 of Title 62 of the Oklahoma Statutes; provided, investments in obligations of state and local governments, pursuant to paragraph 6 of subsection A of Section 89.2 of Title 62 of the Oklahoma Statutes, shall not exceed five percent (5%) of the cash available for investment.
C.  There is hereby created in the State Treasury a revolving fund to be designated the "Revenue Replacement Revolving Fund".  The fund shall be a continuing fund, not subject to fiscal year limitations, and shall consist of all such transfers made pursuant to subsection D of this section.  All monies accruing to the credit of such fund are hereby appropriated and may be budgeted and expended for the fiscal year beginning July 1, 2025, and each fiscal year thereafter, for operations of state government in the same manner as the General Revenue Fund is budgeted and expended; provided, no more than five percent (5%) of monies from the Revenue Replacement Revolving Fund shall be budgeted or expended for debt service payments of principal and interest due on bonds or other financing instruments issued by the State of Oklahoma, any Oklahoma counties, municipalities, state agencies, authorities, commissions, political subdivisions or any other governmental entities.  Expenditures from such fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of State Finance for approval and payment.
D.  On July 1, 2025, and on July 1 each year thereafter, four percent (4%) of the total balance of the Revenue Replacement Endowment Fund shall be transferred to the Revenue Replacement Revolving Fund and shall be certified by the State Board of Equalization as part of the total amount of revenue which will accrue during the last applicable fiscal year.
SECTION 3.  This act shall become effective July 1, 2010.
SECTION 4.  It being immediately necessary for the preservation of the public peace, health and safety, an emergency is hereby declared to exist, by reason whereof this act shall take effect and be in full force from and after its passage and approval.

52-2-2739	JCR	1/14/2010 3:22:46 PM