ENGROSSED HOUSE
BILL NO. 1297	By:	Ownbey, Inman, Terrill and Shumate of the House

				and

		Crutchfield of the Senate

( revenue and taxation - amending 68 O.S., Sections 1357.10, 1370, 1377 and 2701 - sales tax - effective date – 		emergency )

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     Section 3, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2008, Section 1357.10), is amended to read as follows:
Section 1357.10  A.  The sale of an article of clothing or footwear designed to be worn on or about the human body and the sale of school supplies shall be exempt from the tax imposed by Section 1354 of Title 68 of the Oklahoma Statutes this title if:
1.  The sales price of the article is less than One Hundred Dollars ($100.00); and
2.  The sale takes place during a period beginning at 12:01 a.m. on the first Friday in August and ending at 12 midnight on the following Sunday, covering a period of three (3) days.
B.  Subsection A of this section shall not apply to:
1.  Any special clothing or footwear that is primarily designed for athletic activity or protective use and that is not normally worn except when used for athletic activity or protective use for which it is designed;
2.  Accessories, including jewelry, handbags, luggage, umbrellas, wallets, watches, and similar items carried on or about the human body, without regard to whether worn on the body in a manner characteristic of clothing; and
3.  The rental of clothing or footwear.
C.  As used in this section, “school supplies” means pens, pencils, three-ring binders, notebook paper, spiral notebooks, pocket folders, rulers, protractors, compasses, map pencils, crayons, markers, glue, index cards or any item included on an official supply list provided to students by a school.
D.  The Oklahoma Tax Commission shall promulgate any necessary rules to implement the provisions of this section.
SECTION 2.     AMENDATORY     68 O.S. 2001, Section 1370, as last amended by Section 4, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2008, Section 1370), is amended to read as follows:
Section 1370.  A.  Any county of this state may levy a sales tax of not to exceed two percent (2%) upon the gross proceeds or gross receipts derived from all sales or services in the county upon which a consumer’s sales tax is levied by this state.  Before a sales 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 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.  However, if a majority of the registered voters of a county voting fail to approve such a tax, the board of county commissioners shall not call another special election for such purpose for six (6) months.  Any sales tax approved by the registered voters of a county shall be applicable only when the point of sale is within the territorial limits of such county.  Any sales tax levied or any change in the rate of a sales 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 sales tax or changing the rate of sales tax.
B.  The Oklahoma Tax Commission shall give notice to all vendors of a rate change at least sixty (60) days prior to the effective date of the rate change.  Provided, for purchases from printed catalogs wherein the purchaser computed the tax based upon local tax rates published in the catalog, the rate change shall not be effective until the first day of a calendar quarter after a minimum of one hundred twenty (120) days’ notice to vendors.  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.
C.  Initiative petitions calling for a special election concerning county sales 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 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 receiving the petition.  The ballot title presented to the voters at the special election shall be identical to the ballot as presented in the initiative petition.
D.  Subject to the provisions of Section 3 1357.10 of this act title, all items that are exempt from the state sales tax shall be exempt from any sales tax levied by a county.
E.  Any sales tax which may be levied by a county shall be designated for a particular purpose.  Such purposes may include, but are not limited to, projects owned by the state, any agency or instrumentality thereof, the county and/or any political subdivision located in whole or in part within such county, regional development, economic development, common education, general operations, capital improvements, county roads, weather modification or any other purpose deemed, by a majority vote of the county commissioners or as stated by initiative petition, to be necessary to promote safety, security and the general well-being of the people.  The county shall identify the purpose of the sales tax when it is presented to the voters pursuant to the provisions of subsection A of this section.  Except as otherwise provided in this section, the proceeds of any sales tax levied by a county shall be deposited in the general revenue or sales tax revolving fund of the county and shall be used only for the purpose for which such sales tax was designated.  If the proceeds of any sales tax levied by a county pursuant to this section are pledged for the purpose of retiring indebtedness incurred for the specific purpose for which the sales tax is imposed, the sales tax shall not be repealed until such time as the indebtedness is retired.  However, in no event shall the life of the tax be extended beyond the duration approved by the voters of the county.
F.  1.  Notwithstanding any other provisions of law, any county that has approved a sales tax for the construction, support or operation of a county hospital may continue to collect such tax if such hospital is subsequently sold.  Such collection shall only continue if the county remains indebted for the past construction, support or operation of such hospital.  The collection may continue only until the debt is repaid or for the stated term of the sales tax, whichever period is shorter.
2.  If the construction, support or operation of a hospital is funded through the levy of a county sales tax pursuant to this section and such hospital is subsequently sold, the county levying the tax may dissolve the governing board of such hospital following the sale.  Upon the sale of the hospital and dissolution of any governing board, the county is relieved of any future liability for the operation of such hospital.
G.  Proceeds from any sales tax levied that is designated to be used solely by the sheriff for the operation of the office of sheriff shall be placed in the special revenue account of the sheriff.
H.  The life of the tax could 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 subsections A and C of this section.
I.  There are hereby created one or more county sales tax revolving funds in each county which levies a sales tax under this section if any or all of the proceeds of such tax are not to be deposited in the general revenue fund of the county or comply with the provisions of subsection G of this section.  Each such revolving fund shall be designated for a particular purpose and shall consist of all monies generated by such sales tax which are designated for such purpose.  Monies in such funds shall only be expended for the purposes specifically designated as required by this section.  A county sales tax revolving fund shall be a continuing fund not subject to fiscal year limitations.
SECTION 3.     AMENDATORY     Section 5, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2008, Section 1377), is amended to read as follows:
Section 1377.  The sales tax imposed by any county or authority authorized by law to levy a sales tax shall not be imposed upon the sale of an article of clothing or footwear designed to be worn on or about the human body any items included in Section 1357.10 of this title, in accordance with and to the extent set forth in Section 3 1357.10 of this act title.
SECTION 4.     AMENDATORY     68 O.S. 2001, Section 2701, as last amended by Section 6, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2008, Section 2701), is amended to read as follows:
Section 2701.  A.  Any incorporated city or town in this state is hereby authorized to assess, levy, and collect taxes for general and special purposes of municipal government as the Legislature may levy and collect for purposes of state government, subject to the provisions of subsection F of this section, except ad valorem property taxes.  Provided:
1.  Taxes shall be uniform upon the same class subjects, and any tax, charge, or fee levied upon or measured by income or receipts from the sale of products or services shall be uniform upon all classes of taxpayers;
2.  Motor vehicles may be taxed by the city or town only when such vehicles are primarily used or located in such city or town for a period of time longer than six (6) months of a taxable year;
3.  The provisions of this section shall not be construed to authorize imposition of any tax upon persons, firms, or corporations exempted from other taxation under the provisions of Sections 348.1, 624 and 321 of Title 36 of the Oklahoma Statutes, by reason of payment of taxes imposed under such sections;
4.  Cooperatives and communications companies are hereby authorized to pass on to their subscribers in the incorporated city or town involved, the amount of any special municipal fee, charge or tax hereafter assessed or levied on or collected from such cooperatives or communications companies;
5.  No earnings, payroll or income taxes may be levied on nonresidents of the cities or towns levying such tax;
6.  The governing body of any city or town shall be prohibited from proposing taxing ordinances more often than three times in any calendar year, or twice in any six-month period; and
7.  Any revenues derived from a tax authorized by this subsection not dedicated to a limited purpose shall be deposited in the municipal general fund.
B.  A sales tax authorized in subsection A of this section may be levied for limited purposes specified in the ordinance levying the tax.  Such ordinance shall be submitted to the voters for approval as provided in Section 2705 of this title.  Any sales tax levied or any change in the rate of a sales 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 city or town unless another effective date, which shall also be on the first day of a calendar quarter, is specified in the ordinance levying the sales tax or changing the rate of sales tax.  Such ordinance shall describe with specificity the projects or expenditures for which the limited-purpose tax levy would be made.  The municipal governing body shall create a limited-purpose fund and deposit therein any revenue generated by any tax levied pursuant to this subsection.  Money in the fund shall be accumulated from year to year.  The fund shall be placed in an insured interest-bearing account and the interest which accrues on the fund shall be retained in the fund.  The fund shall be nonfiscal and shall not be considered in computing any levy when the municipality makes its estimate to the excise board for needed appropriations.  Money in the limited-purpose tax fund shall be expended only as accumulated and only for the purposes specifically described in the taxing ordinance as approved by the voters.
C.  The Oklahoma Tax Commission shall give notice to all vendors of a rate change at least sixty (60) days prior to the effective date of the rate change.  Provided, for purchases from printed catalogs wherein the purchaser computed the tax based upon local tax rates published in the catalog, the rate change shall not be effective until the first day of a calendar quarter after a minimum of one hundred twenty (120) days’ notice to vendors.  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.
D.  The change in the boundary of a municipality shall be effective, for sales and use tax purposes only, on the first day of a calendar quarter after a minimum of sixty (60) days’ notice to vendors.
E.  If the proceeds of any sales tax levied by a municipality pursuant to subsection B of this section are being used by the municipality for the purpose of retiring indebtedness incurred by the municipality or by a public trust of which the municipality is a beneficiary for the specific purpose for which the sales tax was imposed, the sales tax shall not be repealed until such time as the indebtedness is retired.  However, in no event shall the life of the tax be extended beyond the duration approved by the voters of the municipality.  The provisions of this subsection shall apply to all sales tax levies imposed by a municipality and being used by the municipality for the purposes set forth in this subsection prior to or after July 1, 1995.
F.  The sale of an article of clothing or footwear designed to be worn on or about the human body item included in Section 1357.10 of this title, in accordance with and to the extent set forth in Section 1357.10 of this title, shall be exempt from the sales tax imposed by any incorporated city or town, in accordance with and to the extent set forth in Section 3 of this act.
SECTION 5.  This act shall become effective July 1, 2009.
SECTION 6.  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.
Passed the House of Representatives the 3rd day of March, 2009.

	
Presiding Officer of the House of
	Representatives

Passed the Senate the ____ day of __________, 2009.

	
Presiding Officer of the Senate