ENGROSSED SENATE
BILL NO. 967 	By:	Schulz of the Senate

			and

		Ortega of the House

[ revenue and taxation - water and water rights - motor fuel taxes - effective date - 		emergency ]

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     68 O.S. 2001, Section 500.10, as amended by Section 2, Chapter 267, O.S.L. 2007 (68 O.S. Supp. 2008, Section 500.10), is amended to read as follows:
Section 500.10  Subject to the procedural requirements and conditions set out in this section and Sections 500.11 through 500.17 of this title, the following are exempt from the tax imposed by Section 500.4 of this title on motor fuel:
1.  Motor fuel for which proof of export is available in the form of a terminal-issued destination state shipping paper:
a.	exported by a supplier who is licensed in the destination state, or
b.	sold by a supplier to a licensed exporter for immediate export;
2.  Motor fuel which was acquired by an unlicensed exporter and as to which the tax imposed by Section 500.4 of this title has previously been paid or accrued and was subsequently exported by transport truck by or on behalf of the licensed exporter in a diversion across state boundaries properly reported in conformity with Section 500.46 of this title;
3.  Motor fuel exported out of a bulk plant in this state in a tank wagon if the destination of that vehicle does not exceed twenty-five (25) miles from the border of this state and as to which the tax imposed by Section 500.4 of this title has previously been paid or accrued, subject to gallonage limits and other conditions established by the Oklahoma Tax Commission;
4.  K-1 kerosene sold at retail through dispensers which have been designed and constructed to prevent delivery directly from the dispenser into a vehicle fuel supply tank, and K-1 kerosene sold at retail through nonbarricaded dispensers in quantities of not more than twenty-one (21) gallons for use other than for highway purposes, under such rules as the Tax Commission shall reasonably require;
5.  Motor fuel sold to the United States or any agency or instrumentality thereof;
6.  Motor fuel used solely and exclusively in district-owned public school vehicles or FFA and 4-H Club trucks for the purpose of legally transporting public school children, and motor fuel purchased by any school district for use exclusively in school buses leased or hired for the purpose of legally transporting public school children, or in the operation of vehicles used in driver training;
7.  Motor fuel used solely and exclusively as fuel to propel motor vehicles on the public roads and highways of this state, when leased or owned and being operated for the sole benefit of a county, city, town, a volunteer fire department with a state certification and rating, rural electric cooperatives, rural water and sewer districts, rural irrigation districts organized under the Oklahoma Irrigation District Act, rural ambulance service districts, or federally recognized Indian tribes;
8.  Motor fuel used as fuel for farm tractors or stationary engines owned or leased and operated by any person and used exclusively for agricultural purposes, except as to two and eight one-hundredths cents ($0.0208) per gallon of gasoline as provided in subsection C of Section 500.4 of this title;
9.  Gasoline, diesel fuel and kerosene sold for use as fuel to generate power in aircraft engines, whether in aircraft or for training, testing or research purposes of aircraft engines, except as to eight one-hundredths of one cent ($0.0008) per gallon as provided in subsection B of Section 500.4 of this title;
10.  Motor fuel sold within an Indian reservation or within Indian country by a federally recognized Indian tribe to a member of that tribe and used in motor vehicles owned by that member of the tribe.  This exemption does not apply to sales within an Indian reservation or within Indian country by a federally recognized Indian tribe to non-Indian consumers or to Indian consumers who are not members of the tribe selling the motor fuel;
11.  Subject to determination by the Tax Commission, that portion of diesel fuel:
a.	used to operate equipment attached to a motor vehicle, if the diesel fuel was placed into the fuel supply tank of a motor vehicle that has a common fuel reservoir for travel on a highway and for the operation of equipment, or
b.	consumed by the vehicle while the vehicle is parked off the highways of this state;
12.  Motor fuel acquired by a consumer out of state and carried into this state, retained within and consumed from the same vehicle fuel supply tank within which it was imported;
13.  Diesel fuel used as heating oil, or in railroad locomotives or any other motorized flanged-wheel rail equipment, or used for other nonhighway purposes other than as expressly exempted under another provision;
14.  Motor fuel which was lost or destroyed as a direct result of a sudden and unexpected casualty;
15.  Taxable diesel which had been accidentally contaminated by dye so as to be unsaleable as highway fuel as proved by proper documentation;
16.  Dyed diesel fuel;
17.  Motor fuel sold to the Oklahoma Space Industry Development Authority or any spaceport user as defined in the Oklahoma Space Industry Development Act; and
18.  Biofuels or biodiesel produced by an individual with crops grown on property owned by the same individual and used in a vehicle owned by the same individual on the public roads and highways of this state.
SECTION 2.     AMENDATORY     82 O.S. 2001, Section 277.17, is amended to read as follows:
Section 277.17  A.  All property, owned or purchased by a district, both real and personal and reasonably necessary to accomplish the purposes of the district, shall be exempt from taxation by this state, or by any municipal corporation, county or other political subdivision or taxing district of this state.  All property, products and benefits sold, leased or furnished by a district shall be exempt from sales tax.
B.  All bonds, notes and warrants and the interest thereon issued pursuant to the provisions of the Oklahoma Irrigation District Act shall be exempt from taxation by this state or by any municipal corporation, county or other political subdivision or taxing district of this state.
C.  1.  All districts organized under the provisions of the Oklahoma Irrigation District Act shall be exempt from the payment of sales and use taxes on purchases and use of tangible personal property in this state.
2.  Districts shall be exempt from payment of the vehicle excise tax levied on the transfer for first registration of vehicles purchased and used in this state.
3.  All districts organized under the provisions of the Oklahoma Irrigation District Act shall be exempt from the payment of motor fuel excise taxes, as provided in Section 500.10 of Title 68 of the Oklahoma Statutes.
SECTION 3.  This act shall become effective July 1, 2009.
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.
Passed the Senate the 25th day of February, 2009.

	
Presiding Officer 	of the Senate

Passed the House of Representatives the ____ day of __________, 2009.

	
Presiding Officer	of the House
	of Representatives