ENGR. H. B. NO. 2004 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
ENGROSSED HOUSE
BILL NO. 2004 By: Fetgatter of the House
and
Rogers of the Senate
An Act relating to medical marijuana; amending
Section 1, State Question No. 788, Initiative
Petition No. 412, as last amended by Section 44,
Chapter 161, O.S.L. 2020 (63 O.S. Supp. 2020, Section
420), which relates to medical marijuana patient and
caregiver licensing requirements; specifying
marijuana amounts in grams; allowing for the
possession of additional mature plants; deleting
seedling plants from list of allowable marijuana
products; clarifying elements of certain offense;
specifying biannual payment of application fees for
patient licenses; providing discounted patient
license fee for certain veterans; providing for
license reprints; stating fee; broaden ing eligibility
requirements for temporary license; extending license
period of temporary license; providing physician
recommendation requirements for renewal applications;
authorizing the Oklahoma Medical Marijuana Authority
to promulgate certain rules; a uthorizing the
Authority to deny patient license applications;
removing recordkeeping requirement related to
approved medical marijuana licenses; clarifying types
of records and information the Authority shall seal
to protect privacy; prohibiting the Autho rity from
sharing records with other state agencies or
political subdivisions; providing cultivation
restrictions for caregiver licensees; requiring
applications to be signed by certain physicians who
are licensed and in good standing with their
respective boards; prohibiting the assessment of fee
by counties, cities or political subdivisions;
amending Section 2, State Question No. 788,
Initiative Petition No. 412 (63 O.S. Supp. 2020,
Section 421), which relates to dispensary licensing
requirements; increas ing time limitation for
ENGR. H. B. NO. 2004 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
reviewing medical marijuana dispensary license
applications; authorizing the Authority to deny
dispensary license applications; increasing
percentage amount for nonresident ownership; deleting
penalties for gross discrepancy and fra udulent
reporting and fraudulent sales; authorizing the sale
of pre-rolled marijuana; providing specifications for
pre-rolled products; requiring certain testing,
packaging and labeling; amending Section 3, State
Question No. 788, Initiative Petition No. 4 12 (63
O.S. Supp. 2020, Section 422), which relates to
commercial grower licensing requirements; increasing
time limitation for reviewing medical marijuana
commercial grower license applications; authorizing
the Authority to deny commercial grower license
applications; authorizing commercial growers to
package and sell pre -rolled marijuana; providing
specifications for pre -rolled products; directing the
Authority to promulgate rules to govern sales across
state lines; deleting penalties for gross discrepanc y
and fraudulent reporting and fraudulent sales;
amending Section 4, State Question No. 788,
Initiative Petition No. 412 (63 O.S. Supp. 2020,
Section 423), which relates to medical marijuana
processor licensing requirements; increasing time
limitation for reviewing medical marijuana processing
license applications; authorizing the Authority to
deny processing license applications; providing for
twice yearly inspections; exempting processors from
obtaining sales tax permit for licensure; providing
sales and excise tax exemption; deleting penalties
for gross discrepancy and fraudulent reporting;
specifying entity that oversees inspection and
compliance of processors; amending Section 6, State
Question No. 788, Initiative Petition No. 412, as
last amended by Section 46, Chapter 161, O.S.L. 2020
(63 O.S. Supp. 2020, Section 425), which relates to
protections for medical marijuana patient licensees;
clarifying certain protections for patient licensees
and business licensees; providing standard related to
child endangerment; providing certain exception;
clarifying zoning restrictions; establishing distance
requirement after certain date; deleting definition;
specifying manner by which distances between certain
properties shall be measured; conforming language;
amending Section 7, State Question 788, Initiative
Petition No. 412 (63 O.S. Supp. 2020, Section 426),
ENGR. H. B. NO. 2004 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
which relates to taxes on retail sales of medical
marijuana; authorizing certain veterans to apply for
an excise tax waiver; providing procedures for waiver
requests; modifying manner by which certain funds are
apportioned; amending Section 4, Chapter 509, O.S.L.
2019 (63 O.S. Supp. 2020, Section 426.1), which
relates to licensure revocation and hearings;
removing certain exception; directing the Authority
to make certain information available through an
online verification system; directing the Authority
to make list of marijuana -licensed premises available
to state agencies; requiring certain marijuana -
licensed premises and businesses to submit certain
documentation when requesting a location change;
allowing single certificate of compliance except
under certain conditions; amending Section 2, Chapter
11, O.S.L. 2019, as last amended by Section 48,
Chapter 161, O.S.L. 2020, Section 3, Chapter 11,
O.S.L. 2019, as amended by Section 6, Chapter 477,
O.S.L. 2019, Section 4, Chapter 11, O.S.L. 2019,
Section 6, Chapter 11, O.S.L. 2019, as amended by
Section 7, Chapter 477, O.S.L. 2019, Section 7,
Chapter 11, O.S.L. 2019, as amended by Section 5,
Chapter 509, O.S.L. 20 19, Section 8, Chapter 11,
O.S.L. 2019, Section 9, Chapter 11, O.S.L. 2019,
Section 10, Chapter 11, O.S.L. 2019, as amended by
Section 2, Chapter 390, O.S.L. 2019, Section 11,
Chapter 11, O.S.L. 2019, Section 13, Chapter 11,
O.S.L. 2019, Section 14, Chapte r 11, O.S.L. 2019, as
last amended by Section 51, Chapter 161, O.S.L. 2020,
Section 16, Chapter 11, O.S.L. 2019, Section 17,
Chapter 11, O.S.L. 2019, as amended by Section 4,
Chapter 312, O.S.L. 2019, Section 18, Chapter 11,
O.S.L. 2019, Section 19, Chapte r 11, O.S.L. 2019,
Section 20, Chapter 11, O.S.L. 2019, Section 22,
Chapter 11, O.S.L. 2019 and Section 23, Chapter 11,
O.S.L. 2019, as amended by Section 11, Chapter 477,
O.S.L. 2019 (63 O.S. Supp. 2020, Sections 427.2,
427.3, 427.4, 427.6, 427.7, 427.8, 427.9, 427.10,
427.11, 427.13, 427.14, 427.16, 427.17, 427.18,
427.19, 427.20, 427.22 and 427.23), which relate to
the Oklahoma Medical Marijuana and Patient Protection
Act; replacing references to the State Department of
Health with the Oklahoma Medical M arijuana Authority;
modifying scope of certain definitions; deleting and
adding certain definitions; updating references to
certain named act; adding and clarifying duties and
ENGR. H. B. NO. 2004 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
functions of the Authority; requiring licensees to
submit certain information; r equiring licensees to
submit samples or units to testing laboratories under
certain circumstances; authorizing on -site
inspections or investigations of medical marijuana
businesses and certain facilities; authorizing the
Authority to enter licensed premise s and certain
facilities; providing for post -licensure inspections;
deleting notice requirement; providing for
investigations and additional inspections under
certain circumstances; authorizing the Executive
Director of the Authority to prescribe certain
penalties; defining term; authorizing the review of
licensed medical marijuana waste disposal facility
records; removing provision that allows licensees to
secure legal representation prior to interviews
conducted by the Authority; authorizing the
suspension or revocation of business license for
nonpayment of monetary penalties; providing penalties
for grossly inaccurate or fraudulent reports;
providing procedures for issuing certain written
orders; authorizing the Authority to issue orders
without notice or hearing under certain
circumstances; requiring compliance with provisions
of order; providing for the assessment of monetary
penalties; affording opportunity to apply for a
hearing after issuance of order; authorizing
commercial growers to continue caring for marijuana
plants and marijuana under certain circumstances;
providing restrictions; clarifying privacy
requirements for handling records of licensed
patients and caregivers; deleting references to
certain federal act; modifying scope of certain
definition; authorizing the Authority to contact
recommending physicians of applicants or licensees;
expanding certain protections to podiatrists;
providing for patient license revocation; allowing
patients to request the withdrawal of a caregiver
license; directing withdrawal of caregiver license
without a hearing under certain circumstances;
directing certain facilities to keep transaction
records and utilize seed -to-sale tracking system;
deleting inventory tracking recordkeeping
requirement; adding medical mar ijuana wholesaler
license; providing certain exception related to fees;
modifying certain business licensing requirements by
including medical marijuana research facility,
ENGR. H. B. NO. 2004 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
education facility and waste disposal facility
applicants and licensees; requiring c riminal history
background checks for license renewals; modifying
documentation requirement for proof of residency;
providing exemption from residency requirement for
certain medical marijuana business license
applicants; modifying and deleting certain
identification requirements; providing for the denial
of business applications; prohibiting the issuance of
medical marijuana research facility, education
facility and waste disposal facility licenses to
certain persons; removing requirement to consider
additional information when considering criminal
histories of business license applicants; clarifying
manner by which the Authority may seek administrative
action against applicants or licensees; modifying
exemption to certain compliance requirement;
requiring medical marijuana research facility,
education facility and waste disposal facility
licensees to pay licensure fees prior to receiving
license; providing late renewal fee for reinstatement
of licenses; making fee nonrefundable; prohibiting
reinstatement of certain expired licenses;
prohibiting medical marijuana businesses, medical
marijuana research facilities, education facilities
and waste disposal facilities from operating without
a valid, unexpired license; providing for the
issuance of transporter lice nses to certain entities;
providing construing provision; providing for the
issuance of medical marijuana wholesaler licenses;
modifying certain transporter and wholesaler
requirements for contracting with other businesses,
security, seed-to-sale tracking and warehousing
products; deleting certain transporting requirements;
prohibiting delivery to certain locations; reducing
transporter agent license fee; providing for the
reprint of licenses without charge; stating fee for
subsequent license reprints; modi fying and deleting
certain qualifications for issuing transporter agent
registry identification cards; deleting certain
inventory manifest prohibition; increasing amount of
time inventory manifests and logs shall be
maintained; clarifying authorization of the Authority
to develop certain practices and methods; removing
requirement that prohibits indirect beneficial owners
from owning a laboratory; narrowing scope of testing
laboratory licenses; allowing laboratory licensees to
ENGR. H. B. NO. 2004 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
conduct certain research; requ iring laboratory
licensees to comply with application requirements;
authorizing testing laboratories to accept samples
from licensed medical marijuana research facilities
and education facilities; allowing the testing of
product to be conducted at testing laboratories for
quality assurance purposes; directing the Authority
to develop standards and policies for validation
procedures; specifying type of batches and samples
that must be identified and tracked by an inventory
tracking system; providing for the immediate recall
of certain products; increasing amount of time
required for testing laboratories to retain test
results; removing test batch weight limitation;
removing harvest batch and production batch weight
limitations; directing the Authority to esta blish
regulations for determining batch sizes; increasing
number of inspections required for testing
laboratories after licensure; authorizing
investigations and additional inspections under
certain circumstances; modifying certain date;
authorizing commercial growers to transfer certain
product to processors under certain conditions;
directing the Authority to establish process
validation requirements; deleting and modifying
certain labeling and packaging requirements; making
payment of research license an d education license
fees annual; clarifying application process
requirements for medical marijuana education facility
licenses; authorizing revocation of licenses for
violations of applicable laws, rules and regulations;
specifying the type of records and information that
are considered confidential and exempt from the
Oklahoma Open Records Act; authorizing the Authority
to share certain information with the Oklahoma Tax
Commission; modifying name of entity that recommends
rules to the Executive Director of the Authority;
authorizing the Authority to appoint additional
members to the Medical Marijuana Advisory Council;
authorizing the Authority to tag or mark medical
marijuana, medical marijuana concentrate and medical
marijuana product under certain conditi ons;
authorizing the Authority to embargo medical
marijuana, medical marijuana concentrate and medical
marijuana product; making the removal or disposal of
embargoed medical marijuana, medical marijuana
concentrate and medical marijuana product without
ENGR. H. B. NO. 2004 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
permission unlawful; allowing the Executive Director
of the Authority to institute actions in district
court for the condemnation and destruction of
embargoed medical marijuana, medical marijuana
concentrate and medical marijuana product that fails
to meet certain requirements; providing for the
removal of embargo after certain determination by the
Executive Director; providing exemption from
liability; providing for the destruction of medical
marijuana, medical marijuana concentrate and medical
marijuana product upon findings made by the court;
requiring expenses associated with destruction, court
costs and fees to be paid by owner or defendant;
authorizing courts to order delivery of medical
marijuana, medical marijuana concentrate and medical
marijuana product to owner or defendant under certain
circumstances; directing expenses for supervision be
paid to the Authority by certain person; amending
Sections 2, 3 and 4, Chapter 337, O.S.L. 2019 (63
O.S. Supp. 2020, Sections 428.1, 429 and 430), which
relate to the Oklahoma Medical Marijuana Waste
Management Act; modifying scope of certain
definitions; authorizing the destruction of marijuana
roots and stalks; deleting documentation requirements
for entities that engage in the disposal of medical
marijuana waste; removing requirement for entities to
maintain disposal records for certain period of time;
providing for the unlimited issuance of medical
marijuana waste disposal licenses; clarifying manner
by which distance requirements shall be measured for
waste disposal facilities; removing alternative
financial assurance option; providing for the annual
issuance of permits; directing deposits into
different fund; updating statutory citations;
clarifying language; authorizing contract between
State Department of Healt h and Oklahoma Tax
Commission related to administration of tax on
medical marijuana; providing for collection of tax,
penalty and interest amounts; providing for
administrative fee; providing for deposit of fee
revenues; amending 68 O.S. 2011, Section 2358 , as
last amended by Section 5, Chapter 201, O.S.L. 2019
(68 O.S. Supp. 2020, Section 2358), which relates to
Oklahoma taxable income and Oklahoma adjusted gross
income; providing for inapplicability of designated
section of the Internal Revenue Code of 19 86, as
amended, with respect to Oklahoma income tax returns;
ENGR. H. B. NO. 2004 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
providing for deductibility of ordinary and necessary
business expenses for business entities holding
certain licenses; providing for codification; and
declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 1, State Question No. 788,
Initiative Petition No. 412, as last amended by Section 44, Chapter
161, O.S.L. 2020 (63 O.S. Supp. 2020, Section 420), is amended to
read as follows:
Section 420. A. A person in possession of a state -issued
medical marijuana patient license shall be able to:
1. Consume marijuana legally;
2. Legally possess up to three (3) ounces or eighty-four and
nine-tenths (84.9) grams of marijuana on their his or her person;
3. Legally possess six twelve mature marijuana plants;
4. Legally possess six seedling plants;
5. Legally possess one (1) ounce or twenty-eight and three-
tenths (28.3) grams of concentrated marijuana;
6. 5. Legally possess seventy-two (72) ounces or two thousand
thirty-seven and six-tenths (2,037.6) grams of edible marijuana; and
7. 6. Legally possess up to eight (8) ounces or two hundred
twenty-six and four-tenths (226.4) grams of marijuana in their his
or her residence.
ENGR. H. B. NO. 2004 Page 9 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
B. Possession of up to one and one -half (1.5) ounces or forty-
two and forty-five one-hundredths (42.45) grams of marijuana by
persons who can state a medical condition, but are not in possession
of a state-issued without a medical marijuana patient license, shall
constitute a misdemeanor an offense not subject to imprisonment,
punishable by a fine and court costs not to exceed Four Hundred
Dollars ($400.00) and shall not be subject to imprisonment for the
offense. Any law enforcement officer who comes in contact with a
person in violation of this subsection and who is satisfied as to
shall verify the identity of the person, as well as any other
pertinent information the law enforcement officer deems necessary,
shall and upon such verification, issue to the person a written
citation containing a notice to answer the charge citation against
the person in the appropriate court. Upon receiving the written
promise of the alleged violator to answer as specified in the
citation, the law enforcement officer sh all release the person upon
personal recognizance unless there has been a violation of another
provision of law.
C. A regulatory office , to be known as the Oklahoma Medical
Marijuana Authority, shall be established under the State Department
of Health which shall receive applications for medical marijuana
patient and caregiver license recipients, dispensaries, growers, and
packagers processors within sixty (60) days of the passage of this
initiative.
ENGR. H. B. NO. 2004 Page 10 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
D. The State Department of Health shall, within thirty (30)
days of passage of this initiative, make available on its the
website, of the Oklahoma Medical Marijuana Authority in an easy-to-
find location, an application for a medical marijuana patient
license. The license shall be good valid for two (2) years. The
biannual application fee shall be One Hundred Dollars ($100.00), or
Twenty Dollars ($20.00) for veterans, as defined in Section 2 of
Title 72 of the Oklahoma Statutes, with a disability rating at or in
excess of fifty percent (50%) and individuals on Medicaid, Medicare
or SoonerCare. The methods of payment shall be provided on the
website of the Department. Reprints of the medical marijuana
patient license shall incur a fee of Twenty Dollars ($20.00).
E. A short-term medical marijuana patient license application
shall also be made available on the website of the State Department
of Health Authority. A short-term medical marijuana patient license
shall be granted to any applicant who can meet the requirements for
a two-year medical marijuana patient license, but whose physician
recommendation for medical marijuana is only valid for sixty (60)
days. Short-term medical marijuana patient licenses shall be issued
valid for sixty (60) days. The fee for a short -term medical
marijuana patient license, reprints of the short-term medical
marijuana patient license and the procedure for extending or
renewing the license shall be determined by the Department
Authority.
ENGR. H. B. NO. 2004 Page 11 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
F. A temporary medical marijuana patient license application
shall also be made available on the website of the Department
Authority for residents of other states . A temporary medical
marijuana patient license shall be granted to any medical marijuana
license holder from other states, provided that the state has a
state-regulated medical marijua na program, and the applicant can
prove he or she is a member of such program applicants who meet all
requirements applicable to medical marijuana patient license
applicants prescribed by law or rule, except the residency
requirement provided for in subsec tion G of this section . Temporary
medical marijuana patient licenses issued pursuant to this
subsection shall be issued valid for thirty (30) one hundred twenty
(120) days. The cost for a temporary medical marijuana patient
license issued pursuant to thi s subsection shall be One Hundred
Dollars ($100.00). Renewal of the license shall be granted with
resubmission of a new renewal application. Such renewal application
shall not require a new physician recommendation unless:
1. One (1) year has elapsed fr om the date of the original
physician recommendation; or
2. The originally submitted physician recommendation limited
the recommendation to a specified time period of less than one (1)
year.
No additional criteria shall be required. The Authority shall b e
authorized to promulgate rules related to the manner in which the
ENGR. H. B. NO. 2004 Page 12 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Authority will extend a temporary medical marijuana patient license
issued upon a renewal application as authorized by this subsection.
G. Medical marijuana patient license applicants sha ll submit
his or her their applications to the State Department of Health
Authority for approval. The applicant shall be an Oklahoma state
resident and shall prove residency by a valid driver license,
utility bills, or other accepted methods by such other method as
authorized by the Authority to verify residency .
H. The State Department of Health Authority shall review the
medical marijuana patient license application,; approve or, reject
or deny the application,; and mail the approval or, rejection or
denial letter stating any the reasons for rejection or denial to the
applicant within fourteen (14) business days of receipt of the
application. Approved applicants shall be issued a medical
marijuana patient license which shall act as proof of his or her
approved status. Applications may only be rejected or denied based
on the applicant not meeting stated criteria or improper completion
of the application.
I. The State Department of Health shall only keep the following
records for each approved medical ma rijuana license:
1. A digital photograph of the license holder;
2. The expiration date of the license;
3. The county where the card was issued; and
ENGR. H. B. NO. 2004 Page 13 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
4. A unique 24-character identification number assigned to the
license.
J. The State Department of Heal th Authority shall make
available, both on its website and through a telephone verification
system, an easy method to validate the authenticity of the medical
marijuana patient license by the unique 24-character ten- to twenty-
four-character identification number.
K. J. The State Department of Health Authority shall ensure
that all application medical marijuana patient and caregiver records
and information are sealed to protect the privacy of medical
marijuana license applicants and such records shall not be shared
with any other state agency or political subdivision without a
warrant issued by a court of competent jurisdiction .
L. K. A caregiver license shall be made available for qualified
caregivers of a medical marijuana license holder patient licensee
who is homebound. As provided in Section 11 of Enrolled House Bill
No. 2612 427.11 of the 1st Session of the 57th Oklahoma Legislature
this title, the caregiver license shall provide the caregiver the
same rights as the medical marijuana patient licensee , including the
ability to possess medical marijuana, medical marijuana products and
mature and immature plants or cultivate medical marijuana pursuant
to the Oklahoma Medical Marijuana and Patient Protection Act, but
excluding the ability to use medical marijuana or medical marijuana
products unless the caregiver has a medical marijuana patient
ENGR. H. B. NO. 2004 Page 14 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
license. An applicant All applicants for a caregiver license shall
submit proof of the license status and homebound status of the
medical marijuana patient and pro of that the applicant is the
designee of the medical marijuana patient. The applicant shall also
submit proof that he or she is eighteen (18) years of age or older
and proof of his or her Oklahoma residency. This shall be the only
criteria for a caregive r license. A licensed caregiver shall not
cultivate medical marijuana for more than five medical marijuana
patient licensees and shall not charge a medical marijuana patient
licensee for cultivating medical marijuana in excess of the actual
costs incurred in cultivating said medical marijuana.
M. L. All applicants for a medical marijuana patient license
shall be eighteen (18) years of age or older. A special exception
shall be granted to an applicant under the age of eighteen (18);
however, these applica tions shall be signed by two physicians and
the parent or legal guardian of the applicant.
N. M. All applications for a medical marijuana patient license
shall be signed by an Oklahoma physician licensed by and in good
standing with the State Board of Med ical Licensure, the State Board
of Osteopathic Examiners or the Board of Podiatric Medical
Examiners. There are no qualifying conditions. A medical marijuana
patient license must shall be recommended according to the accepted
standards a reasonable and p rudent physician would follow when
recommending or approving any medication. No physician may be
ENGR. H. B. NO. 2004 Page 15 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
unduly stigmatized, penalized, subjected to discipline, sanctioned,
reprimanded or harassed for signing a medical marijuana patient
license application; provided, that the physician acted in
accordance with the provisions of this subsection and all other
rules governing the medical license of the physician in this state .
O. N. Counties and, cities and other political subdivisions in
this state may enact medical marijuana guidelines allowing medical
marijuana license holders patient licensees or caregivers caregiver
licensees to exceed the state limits set forth in subsection A of
this section. No county, city or other political subdivision in
this state shall have the authority to charge any fee to a medical
marijuana patient licensee residing in its jurisdiction for the use
of medical marijuana or for the cultivation of medical marijuana by
a medical marijuana patient licensee or caregiver licensee as
authorized herein.
SECTION 2. AMENDATORY Section 2, State Question No. 788,
Initiative Petition No. 412 (63 O.S. Supp. 2020, Section 421), is
amended to read as follows:
Section 421. A. The Oklahoma State Department of Health shall ,
within thirty (30) days of passage of this initiative, make
available, on their the website, of the Oklahoma Medical Marijuana
Authority in an easy-to-find location, an application for a medical
marijuana dispensary license. The application fee shall be Two
Thousand Five Hundred Dollars ($2,500.00) and a. A method of
ENGR. H. B. NO. 2004 Page 16 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
payment will shall be provided on the website of the Authority.
Retail Dispensary applicants must all be Oklahoma state residents of
Oklahoma. Any entity applying for a retail dispensary license must
be owned by an Oklahoma state resident and must be registered to do
business in Oklahoma. The Oklahoma State Department of Health
Authority shall have two (2) weeks ninety (90) business days to
review the application ,; approve or, reject or deny the
application,; and mail the approval/rejection approval, rejection or
denial letter (if rejected, stating the reasons for rejection ) or
denial to the applicant.
B. The Oklahoma State Department of Health must Authority shall
approve all applications which meet the following criteria:
1. Applicant The applicant must be age twenty-five (25) years
of age or older;
2. Any The applicant, if applying as an individual, must show
residency in the State of Oklahoma;
3. All applying entities must show that all me mbers, managers,
and board members are Oklahoma residents;
4. An applying entity may show ownership of non -Oklahoma
residents, but that percentage ownership may not exceed twenty-five
percent (25%) forty-nine percent (49%);
5. All applying individuals or entities must be registered to
conduct business in the State of Oklahoma; and
ENGR. H. B. NO. 2004 Page 17 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
6. All applicants must disclose all ownership ; interests in the
dispensary.
7. Applicant(s) Applicants with only a nonviolent felony
conviction(s) conviction in the last two (2) years, any other felony
conviction in 5 (years) the last five (5) years , inmates in the
custody of the Department of Corrections , or any person currently
incarcerated may shall not qualify for a medical marijuana
dispensary license.
C. Retailers will Licensed medical marijuana dispensaries
shall, in the manner and form prescribed by the Authority, be
required to complete a monthly sales report to the Oklahoma
Department of Health Authority. This report will shall be due on
the 15th fifteenth of each month and provide reporting on the
previous month. This report will shall detail the weight of
marijuana purchased at wholesale and the weight of marijuana sold to
card holders, licensed medical marijuana patients and licensed
medical marijuana caregivers and account for any waste. The report
will shall show total sales in dollars, tax collected in dollars,
and tax due in dollars. The Oklahoma State Department of Health
will Authority shall have oversight and auditing responsibilities to
ensure that all marijuana being grown sold is accounted for. A
retailer will only be subject to a penalty if a gross discrepancy
exists and cannot be explained. Penalties for fraudulent reporting
occurring within any 2 year time period will be an initial fine of
ENGR. H. B. NO. 2004 Page 18 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Five Thousand Dollars ($5,000.00) (first) and revocation of
licensing (second).
D. Only a licensed medical marijuana retailer may dispensary
shall conduct retail sales of marijuana , or marijuana derivatives in
the form provided by licensed processors, and these p roducts can
shall only be sold to a medical marijuana license holder patient
licensees or their caregiver. Penalties for fraudulent sales
occurring within any 2 year time period will be an initial fine of
Five Thousand Dollars ($5,000.00) (first) and revo cation of
licensing (second) caregiver licensees. Beginning on the effective
date of this act, licensed medical marijuana dispensaries shall be
authorized to package and sell pre -rolled marijuana to medical
marijuana patient licensees and caregiver licens ees. The products
described in this subsection shall contain only the ground parts of
the marijuana plant and shall not include concentrates, hash or
derivatives. These products shall be tested, packaged and labeled
in accordance with Oklahoma law and ru les promulgated by the
Authority.
SECTION 3. AMENDATORY Section 3, State Question No. 788,
Initiative Petition No. 412 (63 O.S. Supp. 2020, Section 422), is
amended to read as follows:
Section 422. A. The Oklahoma State Department of Health will
shall, within thirty (30) days of passage of this initiative, make
available, on their the website, of the Oklahoma Medical Marijuana
ENGR. H. B. NO. 2004 Page 19 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Authority in an easy-to-find location, an application for a
commercial grower license. The application fe e will shall be Two
Thousand Five Hundred Dollars ($2,500.00) and methods. A method of
payment will shall be provided on the website of the Authority. The
Oklahoma State Department of Health has two (2) weeks Authority
shall have ninety (90) business day s to review the application,;
approve or, reject or deny the application,; and mail the
approval/rejection approval, rejection or denial letter (if
rejected, stating reasons for rejection) stating the reasons for
rejection or denial to the applicant.
B. The Oklahoma State Department of Health must Authority shall
approve all applications which meet the following criteria:
1. Applicant The applicant must be age twenty-five (25) years
of age or older;
2. Any The applicant, if applying as an individual, mus t show
residency in the State of Oklahoma;
3. All applying entities must show that all members, managers,
and board members are Oklahoma residents;
4. An applying entity may show ownership of non -Oklahoma
residents, but that percentage ownership may not exceed twenty-five
percent (25%);
5. All applying individuals or entities must be registered to
conduct business in the State of Oklahoma; and
ENGR. H. B. NO. 2004 Page 20 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
6. All applicants must disclose all ownership ; interests in the
commercial grower operation.
7. Applicant(s) Applicants with only a nonviolent felony
conviction(s) conviction in the last two (2) years, any other felony
conviction in 5 (years) the last five (5) years , inmates in the
custody of the Department of Corrections , or any person currently
incarcerated may shall not qualify for a commercial grower license.
C. 1. A licensed commercial grower may sell marijuana to a
licensed retailer, commercial grower, licensed dispensary or a
licensed packager processor.
2. Beginning on the effective date of this act, lic ensed
commercial growers shall be authorized to package and sell pre -
rolled marijuana containing only ground parts of the marijuana
plant, excluding any concentrates, hash or derivatives, to licensed
medical marijuana dispensaries . Further, these
3. All sales will by a licensed commercial grower shall be
considered wholesale sales and shall not be subject to taxation.
4. Under no circumstances may a licensed commercial grower sell
marijuana directly to a medical marijuana license holder patient
licensee or caregiver licensee . A licensed commercial grower may
only sell at the wholesale level to a licensed retailer commercial
grower, licensed dispensary, or a licensed processor. If the
federal government lifts restrictions on buying and selling
marijuana between states, then a licensed commercial grower would
ENGR. H. B. NO. 2004 Page 21 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
shall be allowed to sell and buy marijuana wholesale from, or to, an
out-of-state wholesale provider. A licensed The Authority shall
promulgate rules to govern the sale of medical marijuana across
state lines within thirty (30) days of becoming federally legal to
do so.
5. Licensed commercial grower will be required to growers
shall, in the manner and form prescribed by the Authority, complete
a monthly yield and sales report to the Oklahoma Department of
Health Authority. This report will shall be due on the 15th
fifteenth of each month and provide reporting on the previous month.
This The report will shall, among other items prescribed by the
Authority, detail the amount of marijuana harvested in pounds, the
amount of drying or dried marijuana on hand, the amount of marijuana
sold to processors in pounds , the amount of waste in pounds, and the
amount of marijuana sold to retailers in lbs. Additionally, this
report will show and total wholesale sales in dollars. The Oklahoma
State Department of Health will Authority shall have oversight and
auditing responsibilities to ensure that all marijuana being grown
by the licensed commercial grower is accounted for. A licensed
grower will only be subject to a penalty if a gross discrepancy
exists and cannot be explained. Penalties for fraudulent reporting
or sales occurring within any 2 year time period will be an initial
fine of Five Thousand Dollars ($5,000.00) (first) and revocation of
licensing (second).
ENGR. H. B. NO. 2004 Page 22 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
D. There shall be no limits on how much marijuana a licensed
commercial grower can grow.
SECTION 4. AMENDATORY Section 4, State Question No. 788,
Initiative Petition No. 412 (63 O.S. Supp. 2020, Section 423), is
amended to read as follows:
Section 423. A. The Oklahoma State Department of Health shall ,
within thirty (30) days of passage of this initiative, make
available, on their the website, of the Oklahoma Medical Marijuana
Authority in an easy-to-find location, an application for a medical
marijuana processing license. The application fee shall be Two
Thousand Five Hundred Dollars ($2,500.00) and methods. A method of
payment will shall be provided on the website of the Authority. The
Oklahoma State Department of Health Authority shall have two (2)
weeks ninety (90) business days to review the application ,; approve
or, reject or deny the application,; and mail the approval/rejection
approval, rejection or denial letter (if rejected, stating the
reasons for rejection ) or denial to the applicant.
B. The Oklahoma State Department of Health must Authority shall
approve all applications which meet the following criteria:
1. Applicant The applicant must be age twenty-five (25) years
of age or older;
2. Any The applicant, if applying as an individual, must show
residency in the State of Oklahoma;
ENGR. H. B. NO. 2004 Page 23 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. All applying entities must show that all members, managers,
and board members are Oklahoma residents;
4. An applying entity may show ownership of non -Oklahoma
residents, but that pe rcentage ownership may not exceed twenty -five
percent (25%);
5. All applying individuals or entities must be registered to
conduct business in the State of Oklahoma; and
6. All applicants must disclose all ownership ; interests in the
processing operation .
7. Applicant(s) Applicants with only a nonviolent felony
conviction(s) conviction in the last two (2) years, any other felony
conviction in 5 (years) the last five (5) years , inmates in the
custody of the Department of Corrections , or any person current ly
incarcerated may shall not qualify for a medical marijuana
processing license.
C. 1. A licensed processor may take marijuana plants and
distill or process these marijuana plants into concentrates,
edibles, and other forms for consumption.
2. As required by subsection D of this section, the Oklahoma
State Department of Health will Authority shall, within sixty (60)
days of passage of this initiative, make available a set of
standards which will shall be used by licensed processors in the
preparation of edible marijuana products. This should be in line
with current food preparation guidelines and no. No excessive or
ENGR. H. B. NO. 2004 Page 24 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
punitive rules may be established by the Oklahoma State Department
of Health Authority. Once a
3. Up to two times per year, the Oklahoma State Department of
Health Authority may inspect a processing operation and determine
its compliance with the preparation standards. If any deficiencies
are found, a written report of deficiency will the deficiencies
shall be issued to the processor. Th e processor will shall have one
(1) month thirty (30) business days to correct the deficiency
deficiencies or be subject to a fine of Five Hundred Dollars
($500.00) for each deficiency.
4. A licensed medical marijuana processor may sell marijuana
products it creates to a licensed retailer, medical marijuana
dispensary or any other licensed medical marijuana processor.
Further, these All sales will by a licensed medical marijuana
processor shall be considered wholesale sales and shall not be
subject to taxation. A licensed medical marijuana processor shall
not be required to obtain an Oklahoma sales tax permit in order to
apply for or renew a medical marijuana processor license.
5. Under no circumstances may a licensed medical marijuana
processor sell medical marijuana, or any medical marijuana product,
directly to a medical marijuana license holder patient licensee or
caregiver licensee. However, a licensed processor may process
cannabis marijuana into a concentrated form , for a medical license
holder, marijuana patient licensee or caregiver licensee for a fee
ENGR. H. B. NO. 2004 Page 25 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
and such fee shall constitute a service that shall not be subject to
any sales tax or excise tax . Processors will be required to
6. Licensed medical marijuana processors shall, in the manner
and form prescribed by the Authority, complete a monthly yield and
sales report to the Oklahoma State Department of Health Authority.
This report will shall be due on the 15th fifteenth of each month
and shall provide reporting on the previous month. This The report
will shall detail the amount of medical marijuana and medical
marijuana products purchased in pounds, the amount of marijuana
cooked or processed in pounds, and the amount of waste in pounds.
Additionally, this report will shall show total wholesale sales in
dollars. The Oklahoma State Department of Health will Authority
shall have oversight and auditing responsibilities to ensure that
all marijuana being grown processed is accounted for. A licensed
processor will only be subject to a penalty if a gross discrepancy
exists and cannot be explained. Penalties for fraudulent reporting
occurring within any 2 year time period will be an initial fine of
Five Thousand Dollars ($5,000.00) (first) and revocation of
licensing (second).
D. The Authority shall oversee inspection and compliance of
processors producing products with marijuana as an additive. The
Oklahoma State Department of Health will Authority shall be
compelled to, within thirty (30) days of passage of this initiative,
appoint a board of twelve (12) Oklahoma residents to the Medical
ENGR. H. B. NO. 2004 Page 26 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Marijuana Advisory Council , who are marijuana industry experts, to
create a list of food safety standards for processing and handling
medical marijuana in Oklahoma. These standards will shall be
adopted by the agency Authority and the agency can Authority may
enforce these standards for licensed processors. The agency will
Authority shall develop a standards review procedure and these
standards can may be altered by calling another board council of
twelve (12) Oklahoma marijuana industry experts. A signed letter of
twenty (20) operating, licensed processors would shall constitute a
need for a new board council and standard standards review.
E. If it becomes permissible, under federal law, marijuana may
be moved across state lines.
F. Any device used for the processing or consumption of medical
marijuana shall be considered legal to be sold, manufactured,
distributed, and possessed. No merchant, wholesaler, manufacturer,
or individual may unduly be unduly harassed, cited or prosecuted for
selling, manufacturing, or possession of medical possessing
marijuana paraphernalia.
SECTION 5. AMENDATORY Section 6, State Question No. 788,
Initiative Petition No. 412, as last amended by Section 46, Chapter
161, O.S.L. 2020 (63 O.S. Supp. 2020, Section 425), is amended to
read as follows:
Section 425. A. No school or landlord may refuse to enroll or
lease to and may not otherwise penalize a person solely for his or
ENGR. H. B. NO. 2004 Page 27 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
her status as a medical marijuana license holder patient licensee,
unless failing to do so would cause the school or landlord the
potential to lose a monetary or licensing -related benefit under
federal law or regulations.
B. Unless a failure to do so would cause an employer the
potential to lose a monetary or licensing -related benefit under
federal law or regulations, an employer may not discriminate against
a person in hiring, termination or imposing any term or condition of
employment or otherwise penalize a person based upon either:
1. The the status of the person as a medical marijuana license
holder patient licensee; or
2. Employers provided, however, employers may take action
against a holder of a medical marijuana license patient licensee if
the holder licensee uses or possesses marijuana while in his or her
place of employment or during the hours of employment. Employers
may not take action against the holder of a medical marijuana
license patient licensee solely based upon the status of an employee
as a medical marijuana license holder patient licensee or the
results of a drug test showing positive for marijuana or its
components.
C. For the purposes of medical care, including organ
transplants, the authorized use of marijuana by a medical marijuana
license holder patient licensee shall be considered the equivalent
of the use of any other medication under the direction of a
ENGR. H. B. NO. 2004 Page 28 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
physician and does not constitute the use of an illicit substance or
otherwise disqualify a registered qualifying patient from medical
care.
D. No medical marijuana license holder patient licensee may be
denied custody of or, visitation or parenting time with a minor
child, and there is no presumption of neglect or child endangerment
for conduct allowed under this law , unless, by clear and convincing
evidence, it is established that the behavior of the person medical
marijuana patient licensee creates an unreasonable danger a risk of
irreparable harm to the safety of the minor child.
E. No person holding who possesses a medical marijuana patient
license may unduly be withheld from holding be denied or restricted
from holding a state-issued license by virtue of their being a
licensed medical marijuana license holder patient including, but not
limited to, a concealed carry permit.
F. 1. No city or local municipality political subdivision in
this state may unduly change or restrict zoning laws to prevent the
opening of a retail marijuana establishment medical marijuana
business. Any city or political subdivision in this state enacting
zoning requirements related to a medical marijuana business shall
treat such business as it does other businesses lawfully engaged in
similar business activities; provided, however, the city or
political subdivision may restrict medical marijuana dispensaries
ENGR. H. B. NO. 2004 Page 29 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
opening after September 1, 2021, from being located within one
thousand (1,000) feet of an existing medical marijuana dispensary .
2. For purposes of this subsection, an undue change or
restriction of municipal zoning laws means an act which entirely
prevents retail marijuana es tablishments from operating within
municipal boundaries as a matter of law. Municipalities Except as
provided in paragraph 1 of this subsection, cities and political
subdivisions may follow their standard planning and zoning
procedures to determine if cer tain zones or districts would be
appropriate for locating marijuana -licensed premises, medical
marijuana businesses or any other premises where marijuana or its
by-products are cultivated, grown, processed, stored or
manufactured.
3. For purposes of this section, "retail marijuana
establishment" means an entity licensed by the State Department of
Health as a medical marijuana dispensary. Retail marijuana
establishment does not include those other entities licensed by the
Department as marijuana -licensed premises, medical marijuana
businesses or other facilities or locations where marijuana or any
product containing marijuana or its by -products are cultivated,
grown, processed, stored or manufactured.
G. The location of any retail marijuana establishment medical
marijuana dispensary is specifically prohibited within one thousand
(1,000) feet of any public or private school entrance unless the
ENGR. H. B. NO. 2004 Page 30 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
dispensary was granted a medical marijuana dispensary license by the
Oklahoma Medical Marijuana Authority for that l ocation prior to the
effective date of this act. Upon the effective date of this act,
the distance indicated in this subsection shall be measured from the
nearest property line of the public or private school to the nearest
property line of the dispensary . If a public or private school is
established within one thousand (1,000) feet of a medical marijuana
dispensary after such dispensary has been licensed, the provisions
of this section shall not be a deterrent to the renewal of such
license or warrant re vocation of the license .
H. Research shall be provided for under this law. A researcher
may apply to the State Department of Health Authority for a special
research license. The research license shall be granted, provided
the applicant meets the criteri a listed under subsection B of
Section 421 of this title provided for in the Oklahoma Medical
Marijuana and Patient Protection Act . Research license holders
licensees shall be required to file monthly consumption reports to
the State Department of Health Authority with amounts of marijuana
used for research. Biomedical and clinical research which is
subject to federal regulations and institutional oversight shall not
be subject to State Department of Health oversight by the Authority.
SECTION 6. AMENDATORY Section 7, State Question No. 788,
Initiative Petition No. 412 (63 O.S. Supp. 2020, Section 426), is
amended to read as follows:
ENGR. H. B. NO. 2004 Page 31 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 426. A. 1. The tax on retail medical marijuana sales
will shall be established at seven pe rcent (7%) of the gross amount
received by the seller.
2. All veterans, as defined in Section 2 of Title 72 of the
Oklahoma Statutes, with a disability rating of twenty -five percent
(25%) or more may apply to the Oklahoma Tax Commission for a medical
marijuana excise tax waiver. Upon receipt of the application and
verification of the disability status of the veteran, the Oklahoma
Tax Commission shall issue an exception authorization to the
Oklahoma Medical Marijuana Authority which shall note on the licen se
of the medical marijuana patient that he or she is not required to
pay any excise tax on the purchase of medical marijuana. The
Oklahoma Tax Commission and Oklahoma Medical Marijuana Authority are
hereby authorized to promulgate any rules necessary to implement the
provisions of this paragraph.
B. This The excise tax will shall be collected at the point of
sale. Tax proceeds will be applied primarily to finance the
regulatory office.
C. If proceeds from the levy authorized by subsection A of this
section exceed the budgeted amount for running the regulatory office
Oklahoma Medical Marijuana Authority , any surplus shall be
apportioned with seventy -five percent (75%) going to the General
Revenue Fund and may only be expended for common education . Twenty-
five percent (25%) shall be apportioned to the Oklahoma State
ENGR. H. B. NO. 2004 Page 32 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Department of Health and earmarked for drug and alcohol
rehabilitation and prevention.
SECTION 7. AMENDATORY Section 4, Chapter 509, O.S.L.
2019 (63 O.S. Supp. 2020, Section 426.1), is amended to read as
follows:
Section 426.1 A. Except for revocation hearings concerning
licensed patients, as defined in Section 2 of Enrolled House Bill
No. 2612 of the 1st Session of the 57th Oklahoma Legislature, all
All licensure revocation hearings conducted pursuant to marijuana
licenses established in the Oklahoma Statutes shall be recorded. A
party may request a copy of the recording of the proceedings.
Copies shall be provided to local law enforcement if the revocation
was based on alleged criminal activity.
B. The State Department of Health Oklahoma Medical Marijuana
Authority shall assist any law enforcement officer in the
performance of his or her duties upon such request by the law
enforcement officer or the request of oth er local officials having
jurisdiction. Except for license information concerning licensed
medical marijuana patients and caregivers, as defined in Section 2
427.2 of Enrolled House Bill No. 2612 of the 1st Session of the 57th
Oklahoma Legislature this title, the Department Authority shall
share information with law enforcement agencies upon request without
a subpoena or search warrant.
ENGR. H. B. NO. 2004 Page 33 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
C. The State Department of Health Authority shall make
available all information displayed on a medical marijuana licenses
business license and medical marijuana transporter agent license , as
well as whether or not the business or transporter agent license is
valid, to law enforcement electronically through the Oklahoma Law
Enforcement Telecommunications System an online verification system.
D. The Department Authority shall make available to Oklahoma
state agencies and political subdivisions a list of marijuana -
licensed premises, medical marijuana businesses or any other
premises where marijuana or its by -products are licensed to be
cultivated, grown, processed, stored or manufactured by a medical
marijuana business to aid county and municipal governments Oklahoma
state agencies and political subdivisions in identifying locations
within their jurisdiction jurisdictions and ensure ensuring
compliance with local applicable laws, rules and regulations.
E. All If located within the incorporated boundaries of any
municipality, all marijuana-licensed premises, medical marijuana
businesses or any other premises where marijuana or its by-products
are licensed to be cultivated, grown, processed, stored or
manufactured shall submit with their the application or request to
change location, after notifying the political subdivision
municipality of their intent, a certificate of complian ce from the
political subdivision municipality where the facility of the
applicant or use licensee is to be located, and its intended use,
ENGR. H. B. NO. 2004 Page 34 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
certifying compliance with zoning classifications, applicable
municipal ordinances and all applicable safety, electri cal, fire,
plumbing, waste, construction and building specification codes .
Once a certificate of compliance has been submitted to the Oklahoma
Medical Marijuana Authority showing full compliance as outlined in
this section, no additional certificate of co mpliance shall be
required for license renewal unless a change of use or occupancy
occurs, or there is any change concerning the facility or location
that would by law require additional inspection, licensure or
permitting by the state or municipality .
SECTION 8. AMENDATORY Section 2, Chapter 11, O.S.L.
2019, as last amended by Section 48, Chapter 161, O.S.L. 2020 (63
O.S. Supp. 2020, Section 427.2), is amended to read as follows:
Section 427.2 As used in this act the Oklahoma Medical
Marijuana and Patient Protection Act :
1. "Advertising" means the act of providing consideration for
the publication, dissemination, solicitation, or circulation , of
visual, oral, or written communication to induce directly or
indirectly any person to patronize a particular medical marijuana
business, or to purchase particular medical marijuana or a medical
marijuana product. Advertising includes marketing, but does not
include packaging and labeling;
2. "Authority" means the Oklahoma Medical Marijua na Authority;
ENGR. H. B. NO. 2004 Page 35 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. "Batch number" means a unique numeric or alphanumeric
identifier assigned prior to testing to allow for inventory tracking
and traceability;
4. "Cannabinoid" means any of the chemical compounds that are
active principles of marijuana;
5. "Caregiver" means a family member or assistant who regularly
looks after a medical marijuana license holder whom a physician
attests needs assistance;
6. "Child-resistant" means special packaging that is:
a. designed or constructed to be significantly d ifficult
for children under five (5) years of age to open and
not difficult for normal adults to use properly as
defined by 16 C.F.R. 1700.15 (1995) and 16 C.F.R.
1700.20 (1995),
b. opaque so that the outermost packaging does not allow
the product to be se en without opening the packaging
material, and
c. resealable to maintain its child -resistant
effectiveness for multiple openings for any product
intended for more than a single use or containing
multiple servings;
7. "Clone" means a nonflowering plant cut from a mother plant
that is capable of developing into a new plant and has shown no
signs of flowering;
ENGR. H. B. NO. 2004 Page 36 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
8. "Commissioner" means the State Commissioner of Health;
9. "Complete application" means a document prepared in
accordance with the provisions set f orth in this act the Oklahoma
Medical Marijuana and Patient Protection Act , rules promulgated
pursuant thereto, and the forms and instructions provided by the
Department Authority, including any supporting documentation
required and the applicable license application fee;
10. "Department" means the State Department of Health;
11. "Director" means the Executive Director of the Oklahoma
Medical Marijuana Authority;
12. "Dispense" means the selling of medical marijuana or a
medical marijuana product to a qu alified patient or the designated
caregiver of the patient that is packaged in a suitable container
appropriately labeled for subsequent administration to or use by a
qualifying patient;
13. "Dispensary" means a medical marijuana dispensary, an
entity that has been licensed by the Department Authority pursuant
to this act the Oklahoma Medical Marijuana and Patient Protection
Act to purchase medical marijuana or medical marijuana products from
a licensed medical marijuana commercial grower or licensed medical
marijuana processor, to prepare and package pre -rolls, and to sell
medical marijuana or medical marijuana products to licensed patients
and caregivers as defined under in this act section, or sell or
transfer products to another licensed dispensary;
ENGR. H. B. NO. 2004 Page 37 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
14. "Edible medical marijuana product" means any medical -
marijuana-infused product for which the intended use is oral
consumption including, but not limited to, any type of food, drink
or pill;
15. "Entity" means an individual, general partnership, limited
partnership, limited liability company, trust, estate, association,
corporation, cooperative, or any other legal or commercial entity;
16. "Flower" means the reproductive organs of the marijuana or
cannabis plant referred to as the bud or parts of the pla nt that are
harvested and used to consume for consumption in a variety of
medical marijuana products;
17. "Flowering" means the reproductive state of the marijuana
or cannabis plant in which there are physical signs of flower or
budding out of the nodes o f the stem;
18. "Food-based medical marijuana concentrate" means a medical
marijuana concentrate that was produced by extracting cannabinoids
from medical marijuana through the use of propylene glycol,
glycerin, butter, olive oil, coconut oil or other typ ical food-safe
cooking fats;
19. "Good cause" for purposes of an initial, renewal or
reinstatement license application, or for purposes of discipline of
a licensee, means:
a. the licensee or applicant has violated, does not meet,
or has failed to comply w ith any of the terms,
ENGR. H. B. NO. 2004 Page 38 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
conditions or provisions of the act, any rules
promulgated pursuant thereto, or any supplemental
relevant state or local law, rule or regulation,
b. the licensee or applicant has failed to comply with
any special terms or conditions t hat were placed upon
the license pursuant to an order of the State
Department of Health, Oklahoma Medical Marijuana
Authority or the municipality, or
c. the licensed premises of a medical marijuana business
or applicant have been operated in a manner that
adversely affects the public health or welfare or the
safety of the immediate vicinity in which the
establishment is located;
20. "Harvest batch" means a specifically identified quantity of
medical marijuana that is uniform in strain, cultivated utilizing
the same substantially consistent cultivation practices, harvested
at the same time from the same location and cured under uniform
conditions;
21. 20. "Harvested marijuana" means post -flowering medical
marijuana not including trim, concentrate or waste;
22. 21. "Heat- or pressure-based medical marijuana concentrate"
means a medical marijuana concentrate that was produced by
extracting cannabinoids from medical marijuana through the use of
heat or pressure;
ENGR. H. B. NO. 2004 Page 39 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
23. 22. "Immature plant" means a nonflowering m arijuana plant
that has not demonstrated signs of flowering;
24. 23. "Inventory tracking system" means the required tracking
system that accounts for the entire life span of medical marijuana
from either the seed or immature plant stage until the medical
marijuana or and medical marijuana product is sold to a patient at a
medical marijuana dispensary, transferred to a medical marijuana
research facility, destroyed by a medical marijuana business or used
in a research project by a medical marijuana research facility
products, including any testing samples thereof and medical
marijuana waste;
25. 24. "Licensed patient" or "patient" means a person who has
been issued a medical marijuana patient license by the State
Department of Health or Oklahoma Medical Mar ijuana Authority;
26. 25. "Licensed premises" means the premises specified in an
application for a medical marijuana business license, medical
marijuana research facility license or medical marijuana education
facility license pursuant to this act the Oklahoma Medical Marijuana
and Patient Protection Act that are owned or in possession of the
licensee and within which the licensee is authorized to cultivate,
manufacture, distribute, sell, store, transport, test or research
medical marijuana or medical mari juana products in accordance with
the provisions of this act the Oklahoma Medical Marijuana and
Patient Protection Act and rules promulgated pursuant thereto;
ENGR. H. B. NO. 2004 Page 40 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
27. 26. "Manufacture" means the production, propagation,
compounding or processing of a medical marijuana product, excluding
marijuana plants, either directly or indirectly by extraction from
substances of natural or synthetic origin, or independently by means
of chemical synthesis, or by a combination of extraction and
chemical synthesis;
28. 27. "Marijuana" shall not include seeds but shall otherwise
have the same meaning as such term is defined in Section 2 -101 of
Title 63 of the Oklahoma Statutes this title and shall also include
any plant or material containing delta -8 or delta-10
tetrahydrocannabinol which is not grown, processed or sold pursuant
to the provisions of the Oklahoma Industrial Hemp Program ;
29. 28. "Material change" means any change that would require a
substantive revision to the standard operating procedures of a
affect the qualifications for licensure of an applicant or licensee
for the cultivation or production of medical marijuana, medical
marijuana concentrate or medical marijuana products ;
30. 29. "Mature plant" means a harvestable female marijuana
plant that is flowering;
31. 30. "Medical marijuana business (MMB)" means a licensed
medical marijuana dispensary, medical marijuana processor, medical
marijuana commercial grower, medical marijuana laboratory, medical
marijuana business operator, medical marijuana wholesaler or a
medical marijuana transporter;
ENGR. H. B. NO. 2004 Page 41 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
32. 31. "Medical marijuana concentrate" or "concentrate" means
a specific subset of medical marijuana that was produced by
extracting cannabinoids from medical marijuana. Categories of
medical marijuana concentrate includ e water-based medical marijuana
concentrate, food-based medical marijuana concentrate, solvent -based
medical marijuana concentrate, and heat - or pressure-based medical
marijuana concentrate;
33. 32. "Medical marijuana commercial grower" or "commercial
grower" means an entity licensed to cultivate, prepare and package
medical marijuana, package pre-rolled marijuana, and transfer or
contract for the transfer of medical marijuana and pre-rolled
marijuana to a medical marijuana dispensary, medical marijuana
processor, any other medical marijuana commercial grower, medical
marijuana research facility , or medical marijuana education facility
and pesticide manufacturers . A commercial grower may sell seeds,
flower or clones to commercial growers pursuant to this act the
Oklahoma Medical Marijuana and Patient Protection Act ;
34. 33. "Medical marijuana education facility" or "education
facility" means a person or entity approved pursuant to this act the
Oklahoma Medical Marijuana and Patient Protection Act to operate a
facility providing training and education to individuals involving
the cultivation, growing, harvesting, curing, preparing, packaging
or testing of medical marijuana, or the production, manufacture,
extraction, processing, packaging or creation of medi cal-marijuana-
ENGR. H. B. NO. 2004 Page 42 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
infused products or medical marijuana products as described in this
act the Oklahoma Medical Marijuana and Patient Protection Act ;
35. 34. "Medical-marijuana-infused product" means a product
infused with medical marijuana including, but not limited to, edible
products, ointments and tinctures , except pre-rolled marijuana that
does not contain medical marijuana concentrate shall not constitute
a medical-marijuana-infused product;
36. 35. "Medical marijuana product" or "product" means a
product that contains cannabinoids that have been extracted from
plant material or the resin therefrom by physical or chemical means
and is intended for administration to a qualified patient including,
but not limited to, oils, tinctures, edibles, pills, topical forms,
gels, creams, vapors, patches, liquids, and forms administered by a
nebulizer, excluding live plant forms which are considered medical
marijuana;
37. 36. "Medical marijuana processor" means a person or entity
licensed pursuant to this act the Oklahoma Medical Marijuana and
Patient Protection Act to operate a business including the
production, manufacture, extraction, processing, packaging or
creation of concentrate, medical -marijuana-infused products or
medical marijuana products as described in this act the Oklahoma
Medical Marijuana and Patient Protection Act ;
38. 37. "Medical marijuana research facility" or "research
facility" means a person or entity approved pursuant to this act the
ENGR. H. B. NO. 2004 Page 43 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Oklahoma Medical Marijuana and Patient Protection Act to conduct
medical marijuana research. A medical marijuana research facility
is not a medical marijuana business;
39. 38. "Medical marijuana testing laboratory" or "laboratory"
means a public or private laboratory licensed pursuant to this act,
the Oklahoma Medical Marijuana and Patient Protection Act to conduct
testing and research on medical marijuana and medical marijuana
products;
40. 39. "Medical marijuana transporter" or "transporter" means
a person or entity that is licensed pursuant to this act the
Oklahoma Medical Marijuana and Patient Protection Act . A medical
marijuana transporter does not include a medical marijuana business
that transports its own medical marijuana, medical marijuana
concentrate or medical marijuana products to a property or facili ty
adjacent to or connected to the licensed premises if the property is
another licensed premises of the same medical marijuana business;
41. 40. "Medical marijuana waste" or "waste" means unused,
surplus, returned or out -of-date marijuana, plant debris o f the
plant of the genus Cannabis, including dead plants and all unused
plant parts and roots, except the term shall not include roots,
stems, stalks and fan leaves;
41. "Medical marijuana wholesaler" or "wholesaler" means an
entity licensed by the Oklaho ma Medical Marijuana Authority to
acquire, possess, sell and distribute medical marijuana or medical
ENGR. H. B. NO. 2004 Page 44 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
marijuana products on behalf of another licensed medical marijuana
business in the State of Oklahoma. A medical marijuana wholesaler
does not include a me dical marijuana business which grows, produces
and sells its own medical marijuana, medical marijuana concentrate
or medical marijuana products;
42. "Medical use" means the acquisition, possession, use,
delivery, transfer or transportation of medical mari juana, medical
marijuana products, medical marijuana devices or paraphernalia
relating to the administration of medical marijuana to treat a
licensed patient;
43. "Mother plant" means a marijuana plant that is grown or
maintained for the purpose of genera ting clones, and that will not
be used to produce plant material for sale to a medical marijuana
processor or medical marijuana dispensary;
44. "Oklahoma physician" or "physician" means a physician
licensed by and in good standing with the State Board of Medical
Licensure and Supervision, the State Board of Osteopathic Examiners
or the Board of Podiatric Medical Examiners;
45. "Oklahoma resident" means an individual who can provide
proof of residency as required by this act the Oklahoma Medical
Marijuana and Patient Protection Act ;
46. "Owner" means, except where the context otherwise requires,
a direct beneficial owner including, but not limited to, all persons
or entities as follows:
ENGR. H. B. NO. 2004 Page 45 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. all shareholders owning an interest of a corporate
entity and all officers of a corporate entity,
b. all partners of a general partnership,
c. all general partners and all limited partners that own
an interest in a limited partnership,
d. all members that own an interest in a limited
liability company,
e. all beneficiaries that hold a beneficial interest in a
trust and all trustees of a trust,
f. all persons or entities that own an interest in a
joint venture,
g. all persons or entities that own an interest in an
association,
h. the owners of any other type of legal entity , and
i. any other person holding an interest or convertible
note in any entity which owns, operates or manages a
licensed facility or entity which contracts for or
receives more than ten percent (10%) of the gross
monthly income or profit of the medical m arijuana
business or which is compensated, in whole or in part,
based on an allocation of a percentage of sales,
income or profit of the medical marijuana business if
such allocation exceeds ten percent (10%) of the gross
monthly sales or income of the med ical marijuana
ENGR. H. B. NO. 2004 Page 46 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
business. For purposes of this subparagraph, any
person or entity who receives such compensation from a
medical marijuana business that was issued a license
prior to the effective date of this act shall not be
considered an owner of that me dical marijuana business
but shall disclose such financial interest in the
medical marijuana business to the Oklahoma Medical
Marijuana Authority upon request or otherwise as
prescribed by the Authority. This exception applies
only to persons or entities who received such
compensation or entered into contracts for such
compensation prior to the effective date of this act ;
47. "Package" or "packaging" means any container or wrapper
that may be used by a medical marijuana business to enclose or
contain medical marijuana;
48. "Person" means a natural person, partnership, association,
business trust, company, corporation, estate, limited liability
company, trust or any other legal entity or organization, or a
manager, agent, owner, director, servant, officer or employee
thereof, except that "person" does not include any governmental
organization;
49. "Pesticide" means any substance or mixture of substances
intended for preventing, destroying, repelling or mitigating any
pest or any substance or mixture of sub stances intended for use as a
ENGR. H. B. NO. 2004 Page 47 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
plant regulator, defoliant or desiccant, except that the term
"pesticide" shall not include any article that is a "new animal
drug" as designated by the United States Food and Drug
Administration;
50. "Production batch" means :
a. any amount of medical marijuana concentrate of the
same category and, produced using the same extraction
methods, and standard operating procedures and an
identical group of harvest batch of medical marijuana ,
or
b. any amount of medical marijuana pro duct of the same
exact type, produced using the same ingredients,
standard operating procedures and the same production
batch of medical marijuana concentrate;
51. "Public institution" means any entity established or
controlled by the federal government, state government, or a local
government or municipality including, but not limited to,
institutions of higher education or related research institutions;
52. "Public money" means any funds or money obtained by the
license holder from any governmental enti ty including, but not
limited to, research grants;
53. "Recommendation" means a document that is signed or
electronically submitted by a physician on behalf of a patient for
ENGR. H. B. NO. 2004 Page 48 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the use of medical marijuana pursuant to this act the Oklahoma
Medical Marijuana and Patient Protection Act ;
54. "Registered to conduct business" means a person that has
provided proof that the business applicant or business licensee is
in good standing with the Oklahoma Secretary of State , if such
registration is required under Oklah oma law and, if the business is
a medical marijuana dispensary proof that the medical marijuana
dispensary is in good standing with the Oklahoma Tax Commission. In
the event the medical marijuana dispensary is not in good standing
with the Oklahoma Tax Co mmission, the business applicant or business
licensee shall provide proof that it has entered into a mutually
agreeable payment plan with the Oklahoma Tax Commission;
55. "Remediation" means the process by which the medical
marijuana flower or trim, which has failed microbial testing, is
processed into solvent -based medical marijuana concentrate and a
harvest batch, production batch or other medical marijuana or
medical marijuana product produced pursuant to the Oklahoma Medical
Marijuana and Patient Prote ction Act undergoes a procedure, prior to
laboratory testing or after the medical marijuana or medical
marijuana product has failed laboratory testing for any reason, to
remedy any deficiencies or failures and is retested as required by
this act in accordance with Oklahoma laws, rules and regulations ;
56. "Research project" means a discrete scientific endeavor to
answer a research question or a set of research questions related to
ENGR. H. B. NO. 2004 Page 49 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
medical marijuana and is required for a medical marijuana research
license. A research project shall include a description of a
defined protocol, clearly articulated goals, defined methods and
outputs, and a defined start and end date. The description shall
demonstrate that the research project will comply with all
requirements in this act the Oklahoma Medical Marijuana and Patient
Protection Act and rules promulgated pursuant thereto. All research
and development conducted by a medical marijuana research facility
shall be conducted in furtherance of an approved research project ;
57. "Revocation" means the final decision by the Department
Authority that any license issued pursuant to this act the Oklahoma
Medical Marijuana and Patient Protection Act is rescinded because
the individual or entity does not comply with the applicabl e
requirements set forth in this act the Oklahoma Medical Marijuana
and Patient Protection Act or rules promulgated pursuant thereto;
58. "School" means a state-licensed public or private preschool
or a public or private elementary, middle or secondary high school
which is primarily used for school classes and classroom
instruction. A An athletic field, homeschool, daycare or child -care
facility shall not be considered a "school" as used in this act the
Oklahoma Medical Marijuana and Patient Protection Ac t;
59. "Shipping container" means a hard -sided container with a
lid or other enclosure that can be secured in place. A shipping
container is used solely for the transport of medical marijuana,
ENGR. H. B. NO. 2004 Page 50 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
medical marijuana concentrate, or medical marijuana products between
medical marijuana businesses, a medical marijuana research facility,
or a medical marijuana education facility;
60. "Solvent-based medical marijuana concentrate" means a
medical marijuana concentrate that was produced by extracting
cannabinoids from medical marijuana through the use of a solvent
approved by the Department Authority;
61. "State Question" means Oklahoma State Question No. 788,
Initiative Petition No. 412, approved by a majority vote of the
citizens of Oklahoma on June 26, 2018;
62. "Strain" means the classification name given to a
particular variety of medical marijuana or cannabis plants in either
pure sativa, indica, afghanica, ruderalis or hybrid varieties that
is based on a combination of factors which may include, but are not
limited to, botanical lineage, appearance, chemical profile and
accompanying effects. An example of a strain of medical marijuana
would be "OG Kush" or "Pineapple Express" ;
63. "THC" means tetrahydrocannabinol, which is the primary
psychotropic cannabinoi d in marijuana formed by decarboxylation of
naturally tetrahydrocannabinolic acid, which generally occurs by
exposure to heat;
64. "Test batch" means with regard to usable marijuana, a
homogenous, identified quantity of usable marijuana by strain, no
greater than ten (10) pounds, that is harvested during a seven -day
ENGR. H. B. NO. 2004 Page 51 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
period from a specified cultivation area, and with regard to oils,
vapors and waxes derived from usable marijuana, means an identified
quantity that is uniform, that is intended to meet specifi cations
for identity, strength and composition, and that is manufactured,
packaged and labeled during a specified time period according to a
single manufacturing, packaging and labeling protocol;
65. "Transporter agent" means a person who transports medic al
marijuana or medical marijuana products for as an employee of a
licensed transporter medical marijuana business and holds a
transporter agent license specific to that business pursuant to this
act the Oklahoma Medical Marijuana and Patient Protection Ac t;
66. 65. "Universal symbol" means the image established by the
State Department of Health or Oklahoma Medical Marijuana Authority
and made available to licensees through its website indicating that
the medical marijuana or the medical marijuana product contains THC;
67. 66. "Usable marijuana" means the dried leaves, flowers,
oils, vapors, waxes and other portions of the marijuana plant and
any mixture or preparation thereof, excluding seed seeds, roots,
stems, stalks and fan leaves; and
68. 67. "Water-based medical marijuana concentrate" means a
concentrate that was produced by extracting cannabinoids from
medical marijuana through the use of only water, ice, or dry ice.
ENGR. H. B. NO. 2004 Page 52 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
SECTION 9. AMENDATORY Section 3, Chapter 11, O.S.L.
2019, as amended by Section 6, Chapter 477, O.S.L. 2019 (63 O.S.
Supp. 2020, Section 427.3), is amended to read as follows:
Section 427.3 A. There is hereby created the Oklahoma Medical
Marijuana Authority within the State Department of Health which
shall address issues related to the medical marijuana program in
Oklahoma including, but not limited to, the issuance of patient and
caregiver licenses and medical marijuana business licenses, and the
dispensing, cultivating, processing, testing, transporting, stor age,
research, and the use of and sale of medical marijuana pursuant to
this act the Oklahoma Medical Marijuana and Patient Protection Act .
B. The Department shall provide support staff to perform
designated duties of the Authority. The Department shall also
provide office space for meetings of the Authority.
C. The Department Authority shall implement the provisions of
this act the Oklahoma Medical Marijuana and Patient Protection Act
consistently with the voter -approved State Question No. 788,
Initiative Petition No. 412, subject to the provisions of this act
the Oklahoma Medical Marijuana and Patient Protection Act .
D. The Department Authority shall exercise its respective
powers and perform its respective duties and functions as specified
in this act the Oklahoma Medical Marijuana and Patient Protection
Act and Title 63 of the Oklahoma Statutes this title including, but
not limited to, the following:
ENGR. H. B. NO. 2004 Page 53 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. Determine steps the state shall take, whether administrative
or legislative in nature, to ensure t hat research on medical
marijuana and medical marijuana products is being conducted for
public purposes, including the advancement of:
a. public health policy and public safety policy,
b. agronomic and horticultural best practices, and
c. medical and pharmacopoeia best practices;
2. Contract with third -party vendors and other governmental
entities in order to carry out the respective duties and functions
as specified in this act the Oklahoma Medical Marijuana and Patient
Protection Act;
3. Upon complaint or upon its own motion and upon a completed
investigation, levy fines as prescribed in this act applicable laws,
rules and regulations and suspend or, revoke or not renew licenses
pursuant to this act applicable laws, rules and regulations ;
4. Issue subpoenas for the appearance or production of persons,
records and things in connection with disciplinary or contested
cases considered by the Department Authority;
5. Apply for injunctive or declaratory relief to enforce the
provisions of this section and any applicable laws, rules
promulgated pursuant to this section and regulations;
6. Inspect and examine , with notice provided in accordance with
this act, all licensed premises of medical marijuana businesses,
medical marijuana research facilities and, medical marijuana
ENGR. H. B. NO. 2004 Page 54 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
education facilities and medical marijuana waste disposal facilities
in which medical marijuana is cultivated, manufactured, sold,
stored, transported, tested or, distributed or disposed;
7. Upon action by the federal government by which the
production, sale and use of marijuana in Oklahoma does not violate
federal law, work with the Oklahoma State Banking Department and the
State Treasurer to develop good practices and standards for banking
and finance for medical marijuana businesses;
8. Establish internal control procedures for licenses including
accounting procedures, reporting procedures and personnel policies;
9. Establish a fee schedule and collect fees for performing
background checks as the Commissioner Executive Director deems
appropriate. The fees charged pursuant to this paragraph shall not
exceed the actual cost incurred for each background check; and
10. Require verification for sources of finance for medical
marijuana businesses Establish a fee schedule and collect fees for
material changes requested by the licensee; and
11. Establish regulations which require a medical marijuana
business to submit information to the Oklahoma Medical Marijuana
Authority deemed reasonably necessary to assist the Authority in the
prevention of diversion of medical marijuana by a licensed medical
marijuana business. Such information required by the Authority may
include, but is not limited to:
a. the square footage of a licensed premises,
ENGR. H. B. NO. 2004 Page 55 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. a diagram of a licensed premises,
c. the number and type of lights at a licensed medical
marijuana commercial grower business,
d. the number, type, and production capacity of equipment
located at a medical marijuana processing facility,
e. the names, addresses and telephone numbers of
employees or agents of a medical marijuana business,
f. employment manuals and standard operating procedures
for a medical marijuana business, and
g. such other information as the Authority reasonably
deems necessary.
The disclosure of this information shall not constitute a
prerequisite of licensure, and the Authority shall not require
disclosure of the financial information of any owner for any purpose
related to obtaining or renewing a medical marijuana business
license.
SECTION 10. AMENDATORY Secti on 4, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.4), is amended to read as
follows:
Section 427.4 A. The Oklahoma Medical Marijuana Authority, in
conjunction with the State Department of Health, shall employ an
Executive Director and other personnel as necessary to assist the
Authority in carrying out its duties.
ENGR. H. B. NO. 2004 Page 56 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
B. The Authority shall not employ an individual if any of the
following circumstances exist:
1. The individual has a direct or indirect interest in a
licensed medical marijuana bu siness; or
2. The individual or his or her spouse, parent, child, spouse
of a child, sibling, or spouse of a sibling has an application for a
medical marijuana business license pending before the Department
Authority or is a member of the board of directo rs of a medical
marijuana business, or is an individual financially interested in
any licensee or medical marijuana business.
C. All officers and employees of the Authority shall be in the
exempt unclassified service as provided for in Section 840 -5.5 of
Title 74 of the Oklahoma Statutes.
D. The Commissioner may delegate to any officer or employee of
the Department any of the powers of the Executive Director and may
designate any officer or employee of the Department to perform any
of the duties of the Ex ecutive Director.
E. The Executive Director shall be authorized to suggest rules
governing the oversight and implementation of this act the Oklahoma
Medical Marijuana and Patient Protection Act .
F. The Department is hereby authorized to create employment
positions necessary for the implementation of its obligations
pursuant to this act, the Oklahoma Medical Marijuana and Patient
Protection Act including, but not limited to, Authority
ENGR. H. B. NO. 2004 Page 57 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
investigators and a senior director of enforcement. The Department
and the Authority, the senior director of enforcement, the Executive
Director, and Department investigators shall have all the powers of
any peace officer to:
1. Investigate violations or suspected violations of this act
the Oklahoma Medical Marijuana and Pat ient Protection Act and any
rules promulgated pursuant thereto;
2. Serve all warrants, summonses, subpoenas, administrative
citations, notices or other processes relating to the enforcement of
laws regulating medical marijuana, medical marijuana concentrate,
and medical marijuana product;
3. Assist or aid any law enforcement officer in the performance
of his or her duties upon such law enforcement officer's request or
the request of other local officials having jurisdiction;
4. Require As provided in Section 427.6 of this title, require
any business applicant or licensee, upon twenty-four (24) hours
notice or upon a showing of necessity, to permit an inspection of
licensed premises, during business hours or at any time of apparent
operation, marijuana equ ipment, and marijuana accessories, or books
and records or any other information required by the Oklahoma
Medical Marijuana and Patient Protection Act or regulation of the
Authority required to be on -site of the medical marijuana business ;
and to permit the testing of or examination of medical marijuana,
medical marijuana concentrate, or medical marijuana product; and
ENGR. H. B. NO. 2004 Page 58 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5. Require applicants and licensees to submit complete and
current applications, submit information and fees required by this
act and fees, the Oklahoma Medical Marijuana and Patient Protection
Act and the Oklahoma Medical Marijuana Waste Management Act, and
approve material changes made by the applicant or licensee ;
6. Require medical marijuana business licensees to submit
samples or units of medical marijuana or medical marijuana products
to the medical marijuana testing laboratory when the Authority has
reason to believe the medical marijuana or medical marijuana
products may be unsafe for patient consumption or inhalation or have
not been tested in accordance with the provisions of the Oklahoma
Medical Marijuana and Patient Protection Act and the rules and
regulations of the Authority. The licensee shall provide the
samples or units of medical marijuana or medical marijuana products
at its own expense but shall not be responsible for the costs of
testing; and
7. Require medical marijuana business licensees to periodically
submit samples or units of medical marijuana or medical marijuana
products to the testing laboratory for quality assura nce purposes.
Licensed medical marijuana commercial growers, medical marijuana
processors, medical marijuana dispensaries and medical marijuana
transporters shall not be required to submit samples or units of
medical marijuana or medical marijuana product s more than twice a
year. The medical marijuana business licensee shall provide the
ENGR. H. B. NO. 2004 Page 59 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
samples or units of medical marijuana or medical marijuana products
at its own expense but shall not be responsible for the costs of
testing.
SECTION 11. AMENDATORY Section 6, Chapter 11, O.S.L.
2019, as amended by Section 7, Chapter 477, O.S.L. 2019 (63 O.S.
Supp. 2020, Section 427.6), is amended to read as follows:
Section 427.6 A. The State Department of Health Oklahoma
Medical Marijuana Author ity shall address issues related to the
medical marijuana program in Oklahoma including, but not limited to,
monitoring and disciplinary actions as they relate to the medical
marijuana program.
B. 1. The Department Authority or its designee may perform o n-
site assessments inspections or investigations of a licensee or
applicant for any medical marijuana business license issued pursuant
to this act, medical marijuana research facility, medical marijuana
education facility or medical marijuana waste disposa l facility to
determine compliance with this act applicable laws, rules and
regulations or submissions made pursuant to this section. The
Department Authority may enter the licensed premises of a medical
marijuana business licensee or applicant , medical marijuana research
facility, medical marijuana education facility or medical marijuana
waste disposal facility to assess or monitor compliance or ensure
qualifications for licensure .
ENGR. H. B. NO. 2004 Page 60 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. Inspections Post-licensure inspections shall be limited to
twice per calendar year and twenty-four (24) hours of notice shall
be provided to a medical marijuana business applicant or licensee
prior to an on-site assessment. However, investigations and
additional inspections may occur when the Department shows that
Authority believes an investigation or additional inspection is
necessary due to a possible violation of this act. Such inspection
may be without notice if the Department believes that such notice
will result in the destruction of evidence applicable laws, rules o r
regulations. The Executive Director of the Authority may adopt
rules imposing penalties including, but not limited to, monetary
penalties and revocation of license, for failure to allow the
Authority reasonable access to the licensed premises for purpos es of
conducting an inspection. As used in this paragraph, "reasonable
access" shall include, but not be limited to, access during normal
business hours of operation after twenty -four (24) hours of notice
has been provided or, for investigations or additi onal inspections,
access during normal business hours of operation .
3. The Department Authority may review relevant records of a
licensed medical marijuana business, licensed medical marijuana
research facility or, licensed medical marijuana education fac ility
or licensed medical marijuana waste disposal facility , and may
require and conduct interviews with such persons or entities and
persons affiliated with such entities, for the purpose of
ENGR. H. B. NO. 2004 Page 61 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
determining compliance with Department Authority requirements and
applicable laws. However, prior to conducting any interviews with
the medical marijuana business, research facility or education
facility, the licensee shall be afforded sufficient time to secure
legal representation during such questioning if requested by the
business or facility or any of its agents or employees or
contractors, rules and regulations .
4. The Department shall Authority may refer complaints alleging
criminal activity that are made against a licensee to appropriate
Oklahoma state or local law enforcement authorities.
C. Disciplinary action may be taken against an applicant or
licensee under this act for not adhering to the law applicable laws,
rules and regulations pursuant to the terms, conditions and
guidelines set forth in this act the Oklahoma Medical Marijuana and
Patient Protection Act .
D. Disciplinary actions may include revocation, suspension or
denial of an application, license or final authorization and other
action deemed appropriate by the Department Authority.
E. Disciplinary actions may be imposed upon a medical marijuana
business licensee for:
1. Failure to comply with or satisfy any provision of this
section applicable laws, rules or regulations ;
2. Falsification or misrepresentation of any material or
information submitted to the Department Authority;
ENGR. H. B. NO. 2004 Page 62 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. Failing to allow or impeding a monitoring visit entry by
authorized representatives of the Department Authority;
4. Failure to adhere to any acknowledgement, verification or
other representation made to the Department Authority;
5. Failure to submit or disclose information required by this
section applicable laws, rules or regulations or as otherwise
requested by the Department Authority;
6. Failure to correct any violation of this section cited as a
result of a review or audit of financial records or other materials;
7. Failure to comply with requested access by the Department
Authority to the licensed premises or materials;
8. Failure to pay a required monetary penalty;
9. Diversion of medical marijuana or any med ical marijuana
product, as determined by the Department Authority;
10. Threatening or harming a medical marijuana patient
licensee, caregiver licensee , a medical practitioner or an employee
of the Department Authority; and
11. Any other basis indicating a violation of the applicable
laws, rules and regulations as identified by the Department
Authority.
F. Disciplinary actions against a licensee may include the
imposition of monetary penalties, which may be assessed by the
Department Authority. The Authority may suspend or revoke a medical
marijuana business license for failure to pay any monetary penalty
ENGR. H. B. NO. 2004 Page 63 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
lawfully assessed by the Authority against a medical marijuana
business licensee.
G. Penalties for sales or purchases by a medical marijuana
business to persons other than those allowed by law occurring within
any two-year time period may include an initial fine of up to One
Thousand Dollars ($1,000.00) for a first violation and a fine of up
to Five Thousand Dollars ($5,000.00) for any subsequent violati on.
Penalties for grossly inaccurate or fraudulent reporting occurring
within any two-year time period may include an initial fine of Five
Thousand Dollars ($5,000.00) for a first violation and a fine of Ten
Thousand Dollars ($10,000.00) for any subsequen t violation. The
medical marijuana business may be subject to a revocation of any
license granted pursuant to this act the Oklahoma Medical Marijuana
and Patient Protection Act upon a showing that the violation was
willful or grossly negligent.
H. 1. First The first offense for intentional and
impermissible diversion of medical marijuana, medical marijuana
concentrate, or medical marijuana products by a patient or caregiver
licensee to an unauthorized person shall not be punished under a
criminal statute but may be subject to a fine of Two Hundred Dollars
($200.00).
2. The second offense for impermissible diversion of medical
marijuana, medical marijuana concentrate, or medical marijuana
products by a patient or caregiver licensee to an unauthorized
ENGR. H. B. NO. 2004 Page 64 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
person shall not be punished under a criminal statute but may be
subject to a fine of not up to exceed Five Hundred Dollars ($500.00)
and may result in revocation of the license upon a showing that the
violation was willful or grossly negligent.
I. The following persons or entities may request a hearing In
addition to contest an action or proposed action of any other
remedies provided by law, the Department: Authority, pursuant to its
rules and regulations, may issue a written order to any medical
marijuana business licensee the Authority has reason to believe has
violated the Oklahoma Medical Marijuana and Patient Protection Act,
the Oklahoma Medical Marijuana Waste Management Act, or any rules
promulgated by the Executive Director of the Authority and to whom
the Authority has served, not less than thirty (30) days previously,
a written notice of violation of such statutes or rules.
1. A medical marijuana business, research facility or education
facility licensee whose license has been summarily suspended or who
has received a notice of contemplated action to suspend or revoke a
license or take other The written order shall state with specificity
the nature of the violation. The Authority may impose any
disciplinary action; and authorized under the provisions of this
section including, but not limited to, the assessment of monetary
penalties.
2. A patient or caregiver licensee whose license has been
summarily suspended or who has received notice of contemplated
ENGR. H. B. NO. 2004 Page 65 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
action to suspend or revoke a license or take ot her disciplinary
action Any order issued pursuant to the provisions of this section
shall become a final order unless, not more than thirty (30) days
after the order is served to the medical marijuana business
licensee, the licensee requests an administrat ive hearing in
accordance with the rules and regulations of the Authority. Upon
such request, the Authority shall promptly initiate administrative
proceedings.
J. Whenever the Authority finds, upon clear and convincing
evidence, that an emergency exists requiring immediate action in
order to protect the public health or welfare, the Authority may
issue an order, without notice or hearing, stating the existence of
the emergency and requiring that action be taken as the Authority
deems necessary to meet the emergency. Such action may include, but
is not limited to, ordering the licensee to immediately cease and
desist operations by the licensee. The order shall be effective
immediately upon issuance. Any licensee to whom the order is
directed shall comply immediately with the provisions of the order.
The Authority may assess a penalty not to exceed Ten Thousand
Dollars ($10,000.00) per day for noncompliance with the order. In
assessing such a penalty, the Authority shall consider the
seriousness of the v iolation and any efforts to comply with
applicable requirements. Upon application to the Authority, the
licensee shall be offered a hearing within ten (10) days of the
ENGR. H. B. NO. 2004 Page 66 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
issuance of the order. No order issued pursuant to this subsection
may prohibit a licensed medical marijuana commercial grower from
continuing to care for, grow, cure or store medical marijuana plants
or medical marijuana until such time as a hearing occurs ; provided,
however, the licensed medical marijuana grower shall be prohibited
from transporting, relocating or selling any medical marijuana
plants or medical marijuana that is the subject of the order until
such time as the matter is resolved . On the basis of the hearing,
the Authority shall continue the order in effect or revoke or mod ify
the order.
J. K. All hearings held pursuant to this section shall be in
accordance with the Oklahoma Administrative Procedures Act , Section
250 et seq. of Title 75 of the Oklahoma Statutes .
SECTION 12. AMENDATORY Section 7, Ch apter 11, O.S.L.
2019, as amended by Section 5, Chapter 509, O.S.L. 2019 (63 O.S.
Supp. 2020, Section 427.7), is amended to read as follows:
Section 427.7 A. The Oklahoma Medical Marijuana Authority
shall create a medical marijuana use registry of licensed patients
and caregivers as provided under this section. The handling of any
records maintained in the registry shall comply with all relevant
applicable state and federal privacy laws including, but not limited
to, the Health Insurance Portability and Accountability Act of 1996
(HIPAA).
B. The medical marijuana use registry shall be accessible to:
ENGR. H. B. NO. 2004 Page 67 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. Oklahoma-licensed medical marijuana dispensaries to verify
the license of a patient or caregiver by the ten- to twenty-four-
character identifier; and
2. Any court in this state.
C. All other records regarding a medical marijuana patient or
caregiver licensee shall be maintained by the Authority and shall be
deemed confidential. The handling of any records maintained by the
Authority shall comply with al l relevant applicable state and
federal privacy laws including, but not limited to, the Health
Insurance Portability and Accountability Act of 1996 (HIPAA) . Such
records shall be marked as confidential, shall not be made available
to the public, and shall only be made available to the licensee,
designee of the licensee, any physician of the licensee or the
caregiver of the licensee.
D. A log shall be kept with the file of the licensee to record
any event in which the records of the licensee were made avai lable
and to whom the records were provided.
E. The Department Authority shall ensure that all application
medical marijuana patient and caregiver records and information are
sealed to protect the privacy of medical marijuana patient and
caregiver license applicants and licensees.
SECTION 13. AMENDATORY Section 8, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.8), is amended to read as
follows:
ENGR. H. B. NO. 2004 Page 68 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 427.8 A. The rights to possess the marijuana products
set forth in Section 420 of Title 63 of the Oklahoma Statutes this
title are cumulative and a duly licensed individual may possess at
any one time the totality of the items listed therein and not be in
violation of this act so long as the individual holds a valid
patient license or caregiver license.
B. Municipal and county governing bodies may not enact medical
marijuana guidelines which restrict or interfere with the rights of
a licensed patient or caregiver to possess, purchase, cultivate or
transport medical marijua na within the legal limits set forth in
this act or Section 420 et seq. of Title 63 of the Oklahoma Statutes
this title or require patients or caregivers to obtain permits or
licenses in addition to the state -required licenses provided herein.
C. Nothing in this act or Section 420 et seq. of Title 63 of
the Oklahoma Statutes this title shall prohibit a residential or
commercial property or business owner from prohibiting the
consumption of medical marijuana or medical marijuana product by
smoke or vaporization on the premises, within the structures of the
premises or within ten (10) feet of the entryway to the premises.
However, a medical marijuana patient shall not be denied the right
to consume or use other medical marijuana products which are
otherwise legal and do not involve the smoking or vaporization of
cannabis when lawfully recommended pursuant to Section 420 of Title
63 of the Oklahoma Statutes this title.
ENGR. H. B. NO. 2004 Page 69 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
D. A medical marijuana patient or caregiver licensee shall not
be denied eligibility in pub lic assistance programs including, but
not limited to, Medicaid, Supplemental Nutrition Assistance Program
(SNAP), Women, Infants, and Children Nutrition Program (WIC),
Temporary Assistance for Needy Families (TANF) or other such public
assistance programs based solely on his or her status as a medical
marijuana patient or caregiver licensee, unless required by federal
law.
E. A medical marijuana patient or caregiver licensee shall not
be denied the right to own, purchase or possess a firearm,
ammunition, or firearm accessories based solely on his or her status
as a medical marijuana patient or caregiver licensee. No state or
local agency, municipal or county governing authority shall
restrict, revoke, suspend or otherwise infringe upon the right of a
person to own, purchase or possess a firearm, ammunition, or firearm
accessories or any related firearms license or certification based
solely on their status as a medical marijuana patient or caregiver
licensee.
F. A medical marijuana patient or caregiver in actual
possession of a medical marijuana license shall not be subject to
arrest, prosecution or penalty in any manner or denied any right,
privilege or public assistance, under state law or municipal or
county ordinance or resolution including without lim itation a civil
penalty or disciplinary action by a business, occupational or
ENGR. H. B. NO. 2004 Page 70 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
professional licensing board or bureau, for the medical use of
marijuana in accordance with this act.
G. A government medical assistance program shall not be
required to reimburse a person for costs associated with the medical
use of marijuana unless federal law requires reimbursement.
H. Unless otherwise required by federal law or required to
obtain federal funding:
1. No employer may refuse to hire, discipline, discharge or
otherwise penalize an applicant or employee solely on the basis of
such applicant's or employee's status as a medical marijuana
licensee; and
2. No employer may refuse to hire, discipline, discharge or
otherwise penalize an applicant or employee solely on the basis of a
positive test for marijuana components or metabolites, unless:
a. the applicant or employee is not in possession of a
valid medical marijuana license,
b. the licensee possesses, consumes or is under the
influence of medical marijuana or medi cal marijuana
product while at the place of employment or during the
fulfillment of employment obligations, or
c. the position is one involving safety -sensitive job
duties, as such term is defined in subsection K of
this section.
ENGR. H. B. NO. 2004 Page 71 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
I. Nothing in this act or Section 420 et seq. of Title 63 of
the Oklahoma Statutes this title shall:
1. Require an employer to permit or accommodate the use of
medical marijuana on the property or premises of any place of
employment or during hours of employment;
2. Require an employer, a government medical assistance
program, private health insurer, worker's compensation carrier or
self-insured employer providing worker's compensation benefits to
reimburse a person for costs associated with the use of medical
marijuana; or
3. Prevent an employer from having written policies regarding
drug testing and impairment in accordance with the Oklahoma
Standards for Workplace Drug and Alcohol Testing Act, Section 551 et
seq. of Title 40 of the Oklahoma Statutes.
J. Any applicant or emplo yee aggrieved by a willful violation
of this section shall have, as his or her exclusive remedy, the same
remedies as provided for in the Oklahoma Standards for Workplace
Drug and Alcohol Testing Act set forth in Section 563 of Title 40 of
the Oklahoma Statutes.
K. As used in this section:
1. "Safety-sensitive" means any job that includes tasks or
duties that the employer reasonably believes could affect the safety
and health of the employee performing the task or others including,
but not limited to, any of the following:
ENGR. H. B. NO. 2004 Page 72 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. the handling, packaging, processing, storage, disposal
or transport of hazardous materials,
b. the operation of a motor vehicle, other vehicle,
equipment, machinery or power tools,
c. repairing, maintaining or monitoring the performan ce
or operation of any equipment, machinery or
manufacturing process, the malfunction or disruption
of which could result in injury or property damage,
d. performing firefighting duties,
e. the operation, maintenance or oversight of critical
services and infrastructure including, but not limited
to, electric, gas, and water utilities, power
generation or distribution,
f. e. the extraction, compression, processing,
manufacturing, handling, packaging, storage, disposal,
treatment or transport of potentially v olatile,
flammable, combustible materials, elements, chemicals
or any other highly regulated component,
g. f. dispensing pharmaceuticals,
h. g. carrying a firearm, or
i. h. direct patient care or direct child care; and
2. A "positive test for marijuana co mponents or metabolites"
means a result that is at or above the cutoff concentration level
established by the United States Department of Transportation or
ENGR. H. B. NO. 2004 Page 73 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Oklahoma law regarding being under the influence, whichever is
lower.
L. All smokable, vaporized, v apable and e-cigarette medical
marijuana product inhaled through vaporization or smoked by a
medical marijuana licensee are subject to the same restrictions for
tobacco under Section 1 -1521 of Title 63 of the Oklahoma Statutes
this title, commonly referred to as the "Smoking in Public Places
and Indoor Workplaces Act".
SECTION 14. AMENDATORY Section 9, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.9), is amended to read as
follows:
Section 427.9 A. The Oklahoma Medical Marijuana Authority may
contact the recommending physician of an applicant for a medical
marijuana patient license or current medical marijuana patient
licensee to verify the need of the applicant or licensee for the
license and the information submitted w ith the application.
B. An applicant for a medical marijuana patient license who can
demonstrate his or her status as a one-hundred-percent-disabled
fifty-percent-disabled veteran as determined by the U.S. Department
of Veterans Affairs and codified at 38 C.F.R., Section
3.340(a)(2013) shall pay a reduced biannual application fee of
Twenty Dollars ($20.00). The methods of payment, as determined by
the Authority, shall be provided on the website. However, the
Authority shall ensure that all applicants hav e an option to submit
ENGR. H. B. NO. 2004 Page 74 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the license application and payment by means other than solely by
submission of the application and fee online.
C. The medical marijuana patient license shall be valid for up
to two (2) years from the date of issuance, unless the
recommendation of the physician is terminated pursuant to this act
Section 427.10 of this title or revoked by the Department Authority.
SECTION 15. AMENDATORY Section 10, Chapter 11, O.S.L.
2019, as amended by Section 2, Chapter 390, O.S.L. 2019 (63 O.S.
Supp. 2020, Section 427.10), is amended to read as follows:
Section 427.10 A. Only licensed Oklahoma allopathic,
osteopathic and podiatric physicians may provide a medical marijuana
recommendation for a medical marijuana patient lice nse under this
act the Oklahoma Medical Marijuana and Patient Protection Act .
B. A physician who has not completed his or her first residency
shall not meet the definition of "physician" under this section and
any recommendation for a medical marijuana pa tient license shall not
be processed by the Authority.
C. No physician shall be subject to arrest, prosecution or
penalty in any manner or denied any right or privilege under
Oklahoma state, municipal or county statute, ordinance or
resolution, including without limitation a civil penalty or
disciplinary action by the State Board of Medical Licensure and
Supervision or, the State Board of Osteopathic Examiners or the
Board of Podiatric Medical Examiners or by any other business,
ENGR. H. B. NO. 2004 Page 75 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
occupation or professional licensing board or bureau, solely for
providing a medical marijuana recommendation for a patient or for
monitoring, treating or prescribing scheduled medication to patients
who are medical marijuana patient licensees. The provisions of this
subsection shall not prevent the relevant professional licensing
boards from sanctioning a physician for failing to properly evaluate
the medical condition of a patient or for otherwise violating the
applicable physician -patient standard of care.
D. A physician who rec ommends use of medical marijuana shall
not be located at the same physical address as a medical marijuana
dispensary.
E. If the physician determines the continued use of medical
marijuana by the patient no longer meets the requirements set forth
in this act the Oklahoma Medical Marijuana and Patient Protection
Act, the physician shall notify the Department Authority and the
Authority shall immediately revoke the license, notify the patient
of the revocation and provide the patient thirty (30) days to submi t
a new recommendation. If the patient fails to supply the Authority
with a new physician recommendation within thirty (30) days, the
patient license shall be immediately voided without a right to an
individual hearing.
SECTION 16. AMENDATORY Section 11, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.11), is amended to read as
follows:
ENGR. H. B. NO. 2004 Page 76 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 427.11 A. The caregiver license shall provide the
caregiver licensee the same rights as the medical marijuana patient
licensee, including the ability to possess medical marijuana,
medical marijuana products, and mature and immature plants pursuant
to this act the Oklahoma Medical Marijuana and Patient Protection
Act, but excluding the ability to use medical marijuana or medical
marijuana products unless the caregiver licensee has a medical
marijuana patient license. Caregivers Licensed caregivers shall be
authorized to deliver medical marijuana and medical marijuana
products to their authorized patients. Caregivers Licensed
caregivers shall be authorized to possess medical marijuana and
medical marijuana products up to the sum of the possession limits
for the patients under his or her their care pursuant to this act
the Oklahoma Medical Marijuana and Patient Protection Act .
B. An individual caregiver licensee shall be limited to
exercising the marijuana cultivation rights of no more than five
licensed medical marijuana patients as prescribed by this act the
Oklahoma Medical Marijuana and Patient Protection Act .
C. The license of a caregiver shall not extend beyond the
expiration date of the underlying patient license regardless of the
issue date.
D. A medical marijuana patient licensee may request, at any
time, to withdraw the license of his or her caregiver. In the event
that such a request is made or upon the expiration of the license of
ENGR. H. B. NO. 2004 Page 77 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the patient, the caregiver license shall be immediately withdrawn by
the Authority without a right to a hearing.
SECTION 17. AMENDATORY Section 13, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.13), is amended to read as
follows:
Section 427.13 A. All medical marijuana and medical marijuana
products shall be purchased solely from an Oklahoma -licensed medical
marijuana business, and shall not be purchased from any out-of-state
providers.
B. 1. The Oklahoma Medical Marijuana Authority shall have
oversight and auditing responsibilities to ensure that all marijuana
being grown in Oklahoma is accounted for and shall implement an
inventory tracking system. Pursua nt to these duties, the Authority
shall require that each licensed medical marijuana business , medical
marijuana research facility, medical marijuana education facility
and medical marijuana waste disposal facility keep records for every
transaction with another licensed medical marijuana business,
medical marijuana patient or medical marijuana caregiver licensee.
Inventory shall be tracked and updated after each individual sale
and reported to the Authority.
2. The inventory tracking system licensees use shall allow for
integration of other seed -to-sale systems and, at a minimum, shall
include the following:
a. notification of when marijuana seeds are planted,
ENGR. H. B. NO. 2004 Page 78 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. notification of when marijuana plants are harvested
and destroyed,
c. notification of when ma rijuana is transported, sold,
stolen, diverted or lost,
d. a complete inventory of all marijuana, seeds, plant
tissue, clones, marijuana plants, usable marijuana or
trim, leaves and other plant matter, batches of
extract, products and marijuana concentrate s,
e. all samples of marijuana or marijuana products sent to
a testing laboratory, an unused portion of a sample
returned to a licensee, all samples utilized by
licensee for purposes of negotiating a sale, and
f. all samples used for quality testing by a l icensee.
3. Each medical marijuana business , medical marijuana research
facility, medical marijuana education facility and medical marijuana
waste disposal facility shall develop written standard operating
procedures outlining the manner in which they ope rate as prescribed
by the Authority and shall use a seed-to-sale tracking system or
integrate its own seed -to-sale tracking system with the seed -to-sale
tracking system established by the Authority in accordance with the
limitations set forth herein .
4. These records shall include, but not be limited to, the
following:
ENGR. H. B. NO. 2004 Page 79 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. the name and license number of the medical marijuana
business that cultivated, manufactured or sold the
medical marijuana or medical marijuana product,
b. the address and phone number of the medical marijuana
business that cultivated, manufactured or sold the
medical marijuana or medical marijuana product,
c. the type of product received during the transaction,
d. the batch number of the marijuana plant used,
e. the date of the transaction ,
f. the total spent in dollars,
g. all point-of-sale records,
h. marijuana excise tax records, and
i. any additional information as may be reasonably
required by the Department Authority.
5. All inventory tracking records containing patient
information shall comply with all relevant state and federal laws
including, but not limited to, the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), and shall not be retained by any
medical marijuana business for more than sixty (60) days.
SECTION 18. AMENDATORY Section 14, Chapter 11, O.S.L.
2019, as last amended by Section 51, Chapter 161, O.S.L. 2020 (63
O.S. Supp. 2020, Section 427.14), is amended to read as follows:
ENGR. H. B. NO. 2004 Page 80 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 427.14 A. There is hereby created the medica l
marijuana business license, which shall include the following
categories:
1. Medical marijuana commercial grower;
2. Medical marijuana processor;
3. Medical marijuana dispensary;
4. Medical marijuana transporter; and
5. Medical marijuana testing lab oratory; and
6. Medical marijuana wholesaler .
B. The Oklahoma Medical Marijuana Authority, with the aid of
the Office of Management and Enterprise Services, shall develop a
website for medical marijuana business applications.
C. The Authority shall make available on its website in an
easy-to-find location, applications for a medical marijuana
business.
D. The annual nonrefundable application fee for a medical
marijuana business license shall be Two Thousand Five Hundred
Dollars ($2,500.00).
E. All applicants seeking licensure or licensure renewal as a
medical marijuana business shall comply with the following general
requirements:
1. All applications for licenses and registrations authorized
pursuant to this section shall be made upon forms prescribed by the
Authority;
ENGR. H. B. NO. 2004 Page 81 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. Each application shall identify the city or county in which
the applicant seeks to obtain licensure as a medical marijuana
business;
3. Applicants shall submit a complete application to the
Department Authority before the application may be accepted or
considered;
4. All applications shall be complete and accurate in every
detail;
5. All applications shall include all attachments or
supplemental information required by the forms supplied by the
Authority;
6. All applications shall be accompanied by a full remittance
for the whole amount of the application fees. Application fees ,
unless otherwise prescribed by the Authority, are nonrefundable;
7. All applicants shall be approved for licensing review that,
at a minimum, meets meet the following criteria:
a. all applicants shall be age twenty-five (25) years of
age or older,
b. any applicant if applying as an individual shall show,
proof that the applicant is an Oklahoma resident
pursuant to paragraph 11 of this subsection,
c. any applicant if applying as an entity shall show,
proof that seventy-five percent (75%) of all members,
managers, executive officers, partners, board members
ENGR. H. B. NO. 2004 Page 82 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
or any other form of business ownership are Oklahoma
residents pursuant to paragraph 11 of this subsecti on,
d. all if applying individuals or entities shall be as an
individual or entity, proof that the individual or
entity is registered to conduct business in the State
of Oklahoma,
e. all applicants shall disclose disclosure of all
ownership interests pursu ant to this act the Oklahoma
Medical Marijuana and Patient Protection Act , and
f. applicants shall proof that the medical marijuana
business, medical marijuana research facility, medical
marijuana education facility and medical marijuana
waste disposal facility applicant or licensee has not
have been convicted of a nonviolent felony in the last
two (2) years, and or any other felony conviction
within the last five (5) years, shall is not be a
current inmates inmate in the custody of the
Department of Correc tions, or currently incarcerated
in a jail or corrections facility;
8. There shall be no limit to the number of medical marijuana
business licenses or categories that an individual or entity can
apply for or receive, although each application and each cat egory
shall require a separate application and application fee. A
licensed medical marijuana commercial grower, processor and
ENGR. H. B. NO. 2004 Page 83 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
dispensary, or any combination thereof, are authorized to share the
same address or physical location, subject to the restriction s set
forth in this act the Oklahoma Medical Marijuana and Patient
Protection Act;
9. All applicants for a medical marijuana business license,
medical marijuana research facility license or medical marijuana
education facility license authorized by this a ct or the renewal of
such license shall undergo an Oklahoma criminal history background
check conducted by the Oklahoma State Bureau of Investigation (OSBI)
within thirty (30) days prior to the application for the license or
renewal of such license , including:
a. individual applicants applying on their own behalf,
b. individuals applying on behalf of an entity,
c. all principal officers of an entity, and
d. all owners of an entity as defined by this act the
Oklahoma Medical Marijuana and Patient Protection Act;
10. All applicable fees charged by the OSBI are the
responsibility of the applicant and shall not be higher than fees
charged to any other person or industry for such background checks;
11. In order to be considered an Oklahoma resident for purposes
of a medical marijuana business license application, all applicants
shall provide proof of Oklahoma residency for at least two (2) years
immediately preceding the date of application or five (5) years of
continuous Oklahoma residency during the preceding twenty-five (25)
ENGR. H. B. NO. 2004 Page 84 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
years immediately preceding the date of application. Sufficient
documentation of proof of residency shall include a combination of
the following:
a. an unexpired Oklahoma -issued driver license,
b. an Oklahoma voter identification card,
c. a utility bill preceding the date of application,
excluding cellular telephone and Internet bills,
d.
c. a residential property deed to property in the State
of Oklahoma, and
e.
d. a rental agreement preceding the date of application
for residential prope rty located in the State of
Oklahoma.
Applicants that were issued a medical marijuana business license
prior to the enactment of the Oklahoma Medical Marijuana and Patient
Protection Act August 30, 2019; applicants who submitted a complete
medical marijuana business license application to the Authority
prior to August 30, 2019, and were granted a medical marijuana
business license after August 30, 2019; and medical marijuana
testing laboratories that were licensed by the Oklahoma State Bureau
of Narcotics and Dangerous Drugs Control prior to August 30, 2019,
are hereby exempt from the two -year or five-year Oklahoma residence
residency requirement mentioned above provided by this paragraph.
ENGR. H. B. NO. 2004 Page 85 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Upon the effective date of this act, an applicant for a medical
marijuana transporter agent license shall be exempt from the two -
year or five-year Oklahoma residency requirement provided by this
paragraph;
12. All license applicants shall be required to submit a
registration with the Oklahoma State Bureau of Narcotics and
Dangerous Drugs Control as provided in Sections 2 -302 through 2-304
of Title 63 of the Oklahoma Statutes this title;
13. All applicants shall establish their identity through
submission of a color copy or digital image of one of the following
unexpired documents:
a. front and back of an Oklahoma a state-issued driver
license,
b. front and back of an Oklahoma a state-issued
identification card,
c. a United States passport or other photo identification
issued by the United States government, or
d. certified copy of the applicant's birth certificate
for minor applicants who do not possess a document
listed in this section, or
e. a tribal identification card approved for
identification purposes by the Oklahoma Department of
Public Safety; and
14. All applicants shall submit an applicant photograph.
ENGR. H. B. NO. 2004 Page 86 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
F. The Authority shall review the medical marijuana business
application, approve or, reject or deny the application and mail the
approval, rejection, denial or status-update letter to the applicant
within ninety (90) business days of receipt of the application.
G. 1. The Authority shall review the medical marijuana
business applications application and conduct all investigations,
inspections and interviews before approving the application.
2. Approved applicants shall be issued a medical marijuana
business license for the specific category applied under which shall
act as proof of their approved status. Rejection and denial letters
shall provide a reason for the rejection or denial. Applications
may only be rejected or denied based on the applicant not meeting
the standards set forth in the provisions of this section the
Oklahoma Medical Marijuana and Patient Protection Act and Sections
420 through 426.1 of this title , improper completion of the
application, or for a reason provided for in this act the Oklahoma
Medical Marijuana and Patient Protection Act and Sections 420
through 426.1 of this title . If an application is rejected or
denied for failure to provide required information, the applicant
shall have thirty (30) days to submit the required information for
reconsideration. No additional application fee shall be charged for
such reconsideration. Unless the Authority determines otherwise, an
application that has been resubmitted but is still incomplete or
ENGR. H. B. NO. 2004 Page 87 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
contains errors that are not clerical or typographical in nature
shall be denied and the application fee refunded.
3. Status-update letters shall provide a reason for delay in
either approval or, rejection or denial should a situation arise in
which an application was submitted properly, but a delay in
processing the application occurred.
4. Approval, rejection , denial or status-update letters shall
be sent to the applicant in the same method the application was
submitted to the Department Authority.
H. A medical marijuana business , medical marijuana research
facility, medical marijuana education facility or medical marijuana
waste disposal facility license shall not be issued to or held by:
1. A person until all required fees have been paid;
2. A person who has been convicted of a nonviolent felony
within two (2) years of the date of application, or within five (5)
years for any other felony;
3. A corporation, if the criminal history of any of its
officers, directors or stockholders indicates that the officer,
director or stockholder has been convicted of a nonviolent felony
within two (2) years of the date of application, or within five (5)
years for any other felony;
4. A person under twenty -five (25) years of age;
ENGR. H. B. NO. 2004 Page 88 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5. A person licensed pursuant to t his section who, during a
period of licensure, or who, at the time of application, has failed
to:
a. file taxes, interest or penalties due related to a
medical marijuana business, or
b. pay taxes, interest or penalties due related to a
medical marijuana bu siness;
6. A sheriff, deputy sheriff, police officer or prosecuting
officer, or an officer or employee of the Authority or municipality;
or
7. A person whose authority to be a caregiver , as defined in
this act Section 427.2 of this title, has been revoked by the
Department Authority; or
8. A person who was involved in the management or operations of
any medical marijuana business, medical marijuana research facility,
medical marijuana education facility or medical marijuana waste
disposal facility that, after the initiation of a disciplinary
action, has had a medical marijuana business license revoked, not
renewed or surrendered, during the five (5) years preceding
submission of the application and for the following violations:
a. unlawful sales or purcha ses,
b. any fraudulent acts, falsification of records or
misrepresentation to the Authority, medical marijuana
ENGR. H. B. NO. 2004 Page 89 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
patient or caregiver licensees or medical marijuana
business licensees,
c. any grossly inaccurate or fraudulent reporting,
d. threatening or harming any medical marijuana patient
licensee, caregiver licensee, medical practitioner or
employee of the Authority,
e. knowingly or intentionally refusing to permit the
Authority access to the premises or records,
f. using a prohibited, hazardous substance for processing
in a residential area,
g. criminal acts relating to the operation of a medical
marijuana business, or
h. any violations that endanger public health and safety
or product safety.
I. In investigating the qualifications of an applicant or a
licensee, the Department, Authority and municipalities may have
access to criminal history record information furnished by a
criminal justice agency subject to any restrictions imposed by such
an agency. In the event the Department considers the criminal
history record of the applicant, the Department shall also consider
any information provided by the applicant regarding such criminal
history record, including but not limited to evidence of
rehabilitation, character references and educational achievements,
especially those items pertaining to the period of time between the
ENGR. H. B. NO. 2004 Page 90 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
last criminal conviction of the applicant and the consideration of
the application for a state license .
J. The failure of an applicant or licensee to provide the
requested information by the Authority deadline may be grounds for
denial of the application.
K. All applicants and licensees shall submit information to the
Department and Authority in a full, faithful, truthful and fair
manner. The Department and Authority may recommend denial of an
application where the applicant or licensee made material
misstatements, omissions, misrepresentations or untruths in the
application or in connection with the background investigation of
the applicant. This type of conduct may be considered as the basis
grounds for additional administrative action against the applicant
or licensee. Typos and scrivener errors shall not be grounds for
denial.
L. A licensed medical marijuana business premises shall be
subject to and responsible for compliance with a pplicable provisions
for medical marijuana business facilities as described in the most
recent versions of the Oklahoma Uniform Building Code, the
International Building Code and the International Fire Code, unless
granted an exemption by the Authority or municipality entity
responsible for enforcement of the applicable code .
M. All medical marijuana business , medical marijuana research
facility, medical marijuana education facility and medical marijuana
ENGR. H. B. NO. 2004 Page 91 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
waste disposal facility licensees shall pay the rele vant licensure
fees prior to receiving licensure to operate a medical marijuana
business, as defined in this act for each class of license .
N. A medical marijuana business, medical marijuana research
facility, medical marijuana education facility or medic al marijuana
waste disposal facility that attempts to renew its license more than
thirty (30) days after expiration of the license shall pay a late
renewal fee in an amount to be determined by the Authority to
reinstate the license. Late renewal fees are nonrefundable. A
license that has been expired for more than ninety (90) days shall
not be reinstated.
O. No medical marijuana business, medical marijuana research
facility, medical marijuana education facility or medical marijuana
waste disposal facilit y shall possess, sell or transfer medical
marijuana, medical marijuana concentrate or medical marijuana
products without a valid, unexpired license issued by the Authority,
unless a renewal application has been submitted to the Authority.
SECTION 19. AMENDATORY Section 16, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.16), is amended to read as
follows:
Section 427.16 A. There is hereby created a medical marijuana
transporter license as a category of the medical marijua na business
license.
ENGR. H. B. NO. 2004 Page 92 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
B. Pursuant to Section 424 of Title 63 of the Oklahoma Statutes
this title, the Oklahoma Medical Marijuana Authority shall issue a
medical marijuana transporter license to licensed medical marijuana
commercial growers, processors and dispensaries upon issuance of
such licenses and upon each renewal. Transporter licenses shall
also be issued to licensed medical marijuana research facilities,
medical marijuana education facilities and medical marijuana testing
laboratories upon issuance of such licenses and upon each renewal.
Nothing in this section shall be construed as prohibiting or
otherwise limiting a medical marijuana business from selling,
storing, marketing or otherwise engaging in the transportation of
any medical marijuana, me dical marijuana concentrate or medical
marijuana products it produces pursuant to any valid license issued
by the Authority.
C. A Aside from the medical marijuana transporter license
issued to a licensed medical marijuana dispensary, medical marijuana
commercial grower, medical marijuana processor, medical marijuana
research facility or medical marijuana education facility in
conjunction with its business license, a medical marijuana
transporter license may also be issued to qualifying applicants who
are registered with the Oklahoma Secretary of State and otherwise
meet the requirements for a medical marijuana business license set
forth in this act the Oklahoma Medical Marijuana and Patient
Protection Act and the requirements set forth in this section to
ENGR. H. B. NO. 2004 Page 93 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
provide logistics, distribution and storage of medical marijuana,
medical marijuana concentrate and medical marijuana products. The
license, when not issued in conjunction with a medical marijuana
dispensary, medical marijuana commercial grower, medical mar ijuana
processor, medical marijuana research facility or medical marijuana
education facility license, shall be known as a "medical marijuana
wholesaler license" or "wholesaler license".
D. A medical marijuana transporter license or wholesaler
license shall be valid for one (1) year and shall not be transferred
with a change of ownership. A licensed medical marijuana
transporter or wholesaler shall be responsible for all medical
marijuana, medical marijuana concentrate and medical marijuana
products once the transporter or wholesaler takes control of the
product.
E. A transporter or wholesaler license shall be required for
any person or entity to transport or transfer medical marijuana,
medical marijuana concentrate or medical marijuana product from a
licensed medical marijuana business to another medical marijuana
business, or from a medical marijuana business to a medical
marijuana research facility or medical marijuana education facility :
1. A licensed medical marijuana business to another licensed
medical marijuana business; or
ENGR. H. B. NO. 2004 Page 94 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. A licensed medical marijuana business to a licensed medical
marijuana research facility or licensed medical marijuana education
facility.
F. A Only a medical marijuana transporter wholesaler licensee
may contract with multi ple licensed medical marijuana businesses to
package, store and transport medical marijuana, medical marijuana
concentrate and medical marijuana products on its behalf in the
State of Oklahoma.
G. A medical marijuana transporter wholesaler may maintain a
licensed premises to temporarily store medical marijuana, medical
marijuana concentrate and medical marijuana products and to use as a
centralized packaging and distribution point. A Except for a
medical marijuana business using its own owners or employee s, only a
medical marijuana transporter wholesaler and its employees may
broker, package, store, market and distribute medical marijuana,
medical marijuana concentrate and medical marijuana products from
the licensed premises in the State of Oklahoma on be half of another
medical marijuana business licensee . The licensed wholesaler
premises shall meet all security requirements applicable to a
medical marijuana business.
H. A medical marijuana transporter wholesaler licensee shall
use the seed-to-sale tracking system developed pursuant to this act
the Oklahoma Medical Marijuana and Patient Protection Act to track
all medical marijuana, medical marijuana concentrate and medical
ENGR. H. B. NO. 2004 Page 95 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
marijuana products received, packaged, stored and distributed by a
wholesaler and to create shipping manifests documenting the
transport of medical marijuana, medical marijuana concentrate and
medical marijuana products throughout the state.
I. A licensed medical marijuana transporter wholesaler may
maintain and operate one or more war ehouses in the state to handle
medical marijuana, medical marijuana concentrate and medical
marijuana products. Each location shall be registered and inspected
by the Authority prior to its use.
J. All medical marijuana, medical marijuana concentrate and
product medical marijuana products shall be transported :
1. In vehicles equipped with Global Positioning System (GPS)
trackers;
2. In a locked container and clearly labeled "Medical Marijuana
or Derivative"; and
3. In a secured area of the vehicle that is not accessible by
the driver during transit in a manner prescribed by the Authority .
K. 1. A transporter agent may possess marijuana at any
location while the transporter agent is transferring marijuana to or
from a licensed medical marijuana busines s, licensed medical
marijuana research facility or licensed medical marijuana education
facility.
2. The delivery of medical marijuana, medical marijuana
concentrate or medical marijuana products to a public or private
ENGR. H. B. NO. 2004 Page 96 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
elementary, middle or high school, t he campus of any institution of
higher education or any other public property is hereby prohibited.
The Department Authority shall administer and enforce the
provisions of this section concerning transportation.
L. The Authority shall issue a transporter agent license to
individual agents, employees, officers or owners of a transporter or
wholesaler license in order for the individual employees, officers
or owners to qualify to transport medical marijuana , medical
marijuana concentrate, or product medical marijuana products.
M. The annual fee for a transporter agent license shall be One
Hundred Dollars ($100.00) Twenty-five Dollars ($25.00) and shall be
paid by the transporter license holder or wholesaler licensee or the
individual applicant. One license reprint within the licensure
period shall be granted free of charge. All subsequent license
reprints shall incur a fee of Twenty Dollars ($20.00).
N. The Authority shall issue each transporter agent a registry
identification card within thirty (30) days of receipt of:
1. The name, address and date of birth of the person;
2. Proof of residency as required for a medical marijuana
business license;
3. Proof of identity as required for a medical marijuana
business license;
4. 3. Possession of a valid Oklahoma state-issued driver
license;
ENGR. H. B. NO. 2004 Page 97 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5. 4. Verification of employment with a licensed transporter;
and
6. 5. The application and affiliated fee ; and
7. A criminal background check conducted by the Oklahoma State
Bureau of Investigation, paid for by the app licant.
O. If the transporter agent application is denied, the
Department Authority shall notify the transporter or wholesaler in
writing of the reason for denying the registry identification card.
P. A registry identification card for a transporter agent shall
expire one (1) year after the date of issuance or upon notification
from the holder of the transporter or wholesaler license that the
transporter agent ceases to work as a transporter.
Q. The Department Authority may revoke the registry
identification card of a transporter agent who knowingly violates
any provision of this section, and the transporter or wholesaler is
subject to any other penalties established by law for the violation.
R. The Department Authority may revoke or suspend the
transporter license of a transporter or wholesaler that the
Department Authority determines knowingly aided or facilitated a
violation of any provision of this section, and the license holder
is subject to any other penalties established in law for the
violation.
ENGR. H. B. NO. 2004 Page 98 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
S. Vehicles used in the transport of medical marijuana , medical
marijuana concentrate or medical marijuana product products shall
be:
1. Insured at or above the legal requirements in Oklahoma;
2. Capable of securing medical marijuana , medical marijuana
concentrate or medical marijuana products during transport; and
3. In possession of a shipping container , as defined in this
act Section 427.2 of this title, capable of securing all transported
product products. However, for purposes of this subsection,
products shall not include plants or clones .
T. Prior to the transport of any medical marijuana , medical
marijuana concentrate or medical marijuana products, an inventory
manifest shall be prepared at the origination point of the medical
marijuana. The inventory manifest shall include the following
information:
1. For the origination point of the medical marijuana:
a. the licensee license number for the medical marijuana
commercial grower, medical marijuana processor or
medical marijuana dispensary,
b. address of origination of transport, and
c. name and contact information for the originating
licensee;
2. For the end recipient license holder of the medical
marijuana:
ENGR. H. B. NO. 2004 Page 99 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. the license number for the medical marijuana
dispensary, medical marijuana commercial grower,
medical marijuana processor, medical marijuana
research facility or medical marijuana education
facility destination,
b. address of the destination, and
c. name and contact information for the destination
licensee;
3. Quantities by weight or uni t of each type of medical
marijuana product contained in transport;
4. The date of the transport and the approximate time of
departure;
5. The arrival date and estimated time of arrival;
6. Printed names and signatures of the personnel accompanying
the transport; and
7. Notation of the transporting licensee.
U. 1. A separate inventory manifest shall be prepared for each
licensee receiving the medical marijuana.
2. The transporter agent shall provide the other medical
marijuana business with a copy of the inventory manifest at the time
the product changes hands and after the other licensee prints his or
her name and signs the inventory manifest.
ENGR. H. B. NO. 2004 Page 100 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. An inventory manifest shall not be altered after departing
the originating premises other than in cases where the printed name
and signature of receipt by the receiving licensee is necessary.
4. A receiving licensee shall refuse to accept any medical
marijuana, medical marijuana concentrate or medical marijuana
product that is not accompanied by an inventor y manifest.
5. 4. Originating and receiving licensees shall maintain copies
of inventory manifests and logs of quantities of medical marijuana
received for three (3) seven (7) years from date of receipt.
SECTION 20. AMENDATORY Sec tion 17, Chapter 11, O.S.L.
2019, as amended by Section 4, Chapter 312, O.S.L. 2019 (63 O.S.
Supp. 2020, Section 427.17), is amended to read as follows:
Section 427.17 A. There is hereby created a medical marijuana
testing laboratory license as a categor y of the medical marijuana
business license. The Oklahoma Medical Marijuana Authority is
hereby enabled to monitor, inspect and audit a licensed testing
laboratory under this act the Oklahoma Medical Marijuana and Patient
Protection Act.
B. The Authority is hereby authorized to contract with a
private laboratory for the purpose of conducting compliance testing
of medical marijuana testing laboratories licensed in this state.
Any such laboratory under contract for compliance testing shall be
prohibited from conducting any other commercial medical marijuana
testing in this state.
ENGR. H. B. NO. 2004 Page 101 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
C. The Authority shall have the authority be authorized to
develop acceptable testing and research practices, including, but
not limited to, testing, standards, quality control an alysis,
equipment certification and calibration , and chemical and substance
identification and substances used in bona fide research methods so
long as it complies with this act .
D. A person who is a direct beneficial owner or an indirect
beneficial owner of a medical marijuana dispensary, medical
marijuana commercial grower, or medical marijuana processor shall
not be an owner of a laboratory.
E. A laboratory and a laboratory applicant shall comply with
all applicable local ordinances, including but not limited to
zoning, occupancy, licensing and building codes.
F. A separate license shall be required for each specific
laboratory.
G. A medical marijuana testing laboratory license may be issued
to a person who performs testing and research on medical marijuana
and medical marijuana products for medical marijuana businesses,
medical marijuana research facilities, medical marijuana education
facilities, and testing and research on marijuana and marijuana
products grown or produced by a patient or caregiver on behalf of a
patient, upon verification of registration. A medical marijuana
testing laboratory may also conduct research related to the
development and improvement of its testing practices and procedures.
ENGR. H. B. NO. 2004 Page 102 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
No state-approved medical marijuana testing fa cility shall operate
unless a medical laboratory director is on site during operational
hours.
H. A laboratory applicant Laboratory applicants and licensees
shall comply with the application requirements of this section and
shall submit such other informa tion as required for a medical
marijuana business applicant, in addition to any information the
Authority may request for initial approval and periodic evaluations
during the approval period.
I. A medical marijuana testing laboratory may accept samples of
medical marijuana, medical marijuana concentrate or medical
marijuana product from a medical marijuana business , medical
marijuana research facility or medical marijuana education facility
for testing and research purposes only, which purposes may include
the provision of testing services for samples submitted by a medical
marijuana business for product development. The Department
Authority may require a medical marijuana business to submit a
sample of medical marijuana, medical marijuana concentrate or
medical marijuana product to a medical marijuana testing laboratory
upon demand.
J. A medical marijuana testing laboratory may accept samples of
medical marijuana, medical marijuana concentrate or medical
marijuana product from an individual person for tes ting only under
the following conditions:
ENGR. H. B. NO. 2004 Page 103 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. The individual person is a medical marijuana patient
licensee or caregiver licensee pursuant to this act the Oklahoma
Medical Marijuana and Patient Protection Act or is a participant in
an approved clinical or observational study conducted by a research
facility; and
2. The medical marijuana testing laboratory shall require the
medical marijuana patient licensee or caregiver licensee to produce
a valid patient or caregiver license and current and valid photo
identification.
K. A medical marijuana testing laboratory may transfer samples
to another medical marijuana testing laboratory for testing. All
laboratory reports provided to or by a medical marijuana business or
to a patient or caregiver shall identify th e medical marijuana
testing laboratory that actually conducted the test.
L. A medical marijuana testing laboratory may utilize a
licensed medical marijuana transporter or wholesaler to transport
samples of medical marijuana, medical marijuana concentrate and
medical marijuana product for testing, in accordance with this act
the Oklahoma Medical Marijuana and Patient Protection Act and the
rules adopted pursuant thereto, between the originating medical
marijuana business requesting testing services and the destination
laboratory performing testing services.
M. The medical marijuana testing laboratory shall establish
policies to prevent the existence of or appearance of undue
ENGR. H. B. NO. 2004 Page 104 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
commercial, financial or other influences that may diminish the
competency, impartiality and integrity of the testing processes or
results of the laboratory, or that may diminish public confidence in
the competency, impartiality and integrity of the testing processes
or results of the laboratory. At a minimum, employees, owners or
agents of a medical marijuana testing laboratory who participate in
any aspect of the analysis and results of a sample are prohibited
from improperly influencing the testing process, improperly
manipulating data, or improperly benefiting from any ongoing
financial, employment, personal or business relationship with the
medical marijuana business that provided the sample.
N. The Department Authority, pursuant to rules promulgated by
the State Commissioner of Health Executive Director, shall develop
standards, policies and procedures as necessary for:
1. The cleanliness and orderliness of a laboratory premises and
the location of the laboratory in a secure location, and inspection,
cleaning and maintenance of any equipment or utensils used for the
analysis of test samples;
2. Testing procedures, testing standards for cannabinoid and
terpenoid potency and safe levels of contaminants, and remediation
procedures and validation procedures ;
3. Controlled access areas for storage of medical marijuana and
medical marijuana product test samples, waste and reference
standards;
ENGR. H. B. NO. 2004 Page 105 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
4. Records to be retained and computer systems to be utilized
by the laboratory;
5. The possession, storage and use by the laboratory of
reagents, solutions and reference standards;
6. A certificate of analysis (COA) for each lot of reference
standard;
7. The transport and disposal of unused marijuana, marijuana
products and waste;
8. The mandatory use by a laboratory of an inventory tracking
system to ensure all test harvest and production batches or samples
containing medical marijuana, medical marijuana concentrate or
medical marijuana products are identified and tracked from the point
they are transferred from a medical marijuana business, a patient or
a caregiver through the point of transfe r, destruction or disposal.
The inventory tracking system reporting shall include the results of
any tests that are conducted on medical marijuana, medical marijuana
concentrate or medical marijuana product;
9. Standards of performance;
10. The employment of laboratory personnel;
11. A written standard operating procedure manual to be
maintained and updated by the laboratory;
12. The successful participation in a Department-approved an
Authority-approved proficiency testing program for each testing
ENGR. H. B. NO. 2004 Page 106 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
category listed in this section, in order to obtain and maintain
certification;
13. The establishment of and adherence to a quality assurance
and quality control program to ensure sufficient monitoring of
laboratory processes and quality of results reported;
14. The establishment by the laboratory of a system to document
the complete chain of custody for samples from receipt through
disposal;
15. The establishment by the laboratory of a system to retain
and maintain all required records, including business records, and
processes to ensure results are reported in a timely and accurate
manner; and
16. Any other aspect of laboratory testing of medical marijuana
or medical marijuana product deemed necessary by the Department
Authority; and
17. The immediate re call of medical marijuana or medical
marijuana products that test above allowable thresholds or are
otherwise determined to be unsafe .
O. A medical marijuana testing laboratory shall promptly
provide the Department Authority or designee of the Department
Authority access to a report of a test and any underlying data that
is conducted on a sample at the request of a medical marijuana
business or qualified patient. A medical marijuana testing
laboratory shall also provide access to the Department Authority or
ENGR. H. B. NO. 2004 Page 107 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
designee of the Department Authority to laboratory premises and to
any material or information requested by the Department Authority to
determine compliance with the requirements of this section.
P. A medical marijuana testing laboratory shall retain a ll
results of laboratory tests conducted on marijuana or products for a
period of at least two (2) seven (7) years and shall make them
available to the Department Authority upon request.
Q. A medical marijuana testing laboratory shall test samples
from each harvest batch or product batch, as appropriate, of medical
marijuana, medical marijuana concentrate and medical marijuana
product for each of the following categories of testing, consistent
with standards developed by the Commissioner Authority:
1. Microbials;
2. Mycotoxins;
3. Residual solvents;
4. Pesticides;
5. Tetrahydrocannabinol (THC) and other cannabinoid potency;
6. Terpenoid potency; and
7. Heavy metals.
R. A test batch shall not exceed ten (10) pounds of usable
marijuana or medical mari juana product, as appropriate. A grower
shall separate each harvest lot of usable marijuana into harvest
batches containing no more than ten (10) pounds. A processor shall
separate each medical marijuana production lot into production
ENGR. H. B. NO. 2004 Page 108 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
batches containing no more than ten (10) pounds The Authority shall
establish reasonable regulations, after consultation with and input
from medical marijuana businesses, specifying what shall constitute
a batch size for testing purposes for all types of medical
marijuana, medical marijuana concentrate and medical marijuana
products.
S. Medical marijuana testing laboratory licensure shall be
contingent upon successful on -site inspection, successful
participation in proficiency testing and ongoing compliance with the
applicable requirements in this section.
T. A medical marijuana testing laboratory shall be inspected
prior to initial licensure and annually up to two times per year
thereafter by an inspector approved by the Authority. The Authority
may enter the licensed prem ises of a testing laboratory to conduct
investigations and additional inspections when the Authority
believes an investigation or additional inspection is necessary due
to a possible violation of applicable laws, rules or regulations.
U. Beginning on a da te determined by the Commissioner Executive
Director, not later than January 1, 2020 2022, medical marijuana
testing laboratory licensure shall be contingent upon accreditation
by the NELAC Institute (TNI), ANSI/ASQ ANSI National Accreditation
Board (ANAB) or another accrediting body approved by the
Commissioner Executive Director, and any applicable standards as
determined by the Department Authority.
ENGR. H. B. NO. 2004 Page 109 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
V. A 1. Unless otherwise authorized by this section, a
commercial grower shall not transfer or sell medi cal marijuana and a
processor shall not transfer, sell or process into a concentrate or
product any medical marijuana, medical marijuana concentrate or
medical marijuana product unless samples from each harvest batch or
production batch from which that med ical marijuana, medical
marijuana concentrate or medical marijuana product was derived has
been tested by a medical marijuana testing facility for contaminants
and passed all contaminant tests required by this act the Oklahoma
Medical Marijuana and Patient Protection Act and applicable laws,
rules and regulations.
2. A licensed medical marijuana commercial grower may transfer
medical marijuana that has failed testing to a licensed medical
marijuana processor only for the purposes of remediation and only in
accordance with the Oklahoma Medical Marijuana and Patient
Protection Act and the rules and regulations of the Authority.
3. The Authority shall establish process validation
requirements related to testing, and all growers and processors who
achieve process validation under the rules and regulations set forth
by the Authority may transfer, sell or process medical marijuana,
medical marijuana concentrate and medical marijuana products in
accordance with those rules and regulations related to batch
testing.
ENGR. H. B. NO. 2004 Page 110 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
SECTION 21. AMENDATORY Section 18, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.18), is amended to read as
follows:
Section 427.18 A. An Oklahoma medical marijuana business shall
not sell, transfer or otherwise distr ibute medical marijuana ,
medical marijuana concentrate or medical marijuana product that has
not been packaged and labeled in accordance with this section and
rules promulgated by the State Commissioner of Health Oklahoma
Medical Marijuana Authority .
B. A medical marijuana dispensary shall return medical
marijuana, medical marijuana concentrate and medical marijuana
product products that does do not meet packaging or labeling
requirements in this section or rules promulgated pursuant thereto
to the entity who transferred it to the dispensary. The medical
marijuana dispensary shall document to whom the item was returned,
what was returned and the date of the return or dispose of any
usable marijuana that does not meet these requirements in accordance
with this act the Oklahoma Medical Marijuana and Patient Protection
Act.
C. 1. Medical marijuana packaging shall be packaged to
minimize its appeal to children and shall not depict images other
than the business name logo of the medical marijuana producer and
image of the product.
ENGR. H. B. NO. 2004 Page 111 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. A medical marijuana business shall not place any content on
a container in a manner that reasonably appears to target
individuals under the age of twenty -one (21), including but not
limited to cartoon characters or similar images.
3. Labels on a container shall not include any false or
misleading statements.
4. No container shall be intentionally or knowingly labeled so
as to cause a reasonable patient confusion as to whether the medical
marijuana, medical marijuana concentrate o r medical marijuana
product is a trademarked product or labeled in a manner that
violates any federal trademark law or regulation.
5. The label on the container shall not make any claims
regarding health or physical benefits to the medical marijuana
patient licensee.
6. All medical marijuana, medical marijuana concentrate and
medical marijuana products sold at a licensed medical marijuana
dispensary shall be packaged in a child-resistant container at the
point of transfer to the patient or caregiver .
D. The State Department of Health Oklahoma Medical Marijuana
Authority shall develop minimum standards for packaging and labeling
of medical marijuana , medical marijuana concentrate and medical
marijuana products. Such standards shall include, but not be
limited to, the required contents of labels to be affixed to all
medical marijuana, medical marijuana concentrate and medical
ENGR. H. B. NO. 2004 Page 112 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
marijuana products prior to transfer to a licensed medical marijuana
patient licensee or caregiver licensee, which shall include, at a
minimum:
1. A universal symbol indicating that the product contains
tetrahydrocannabinol (THC);
2. THC and other cannabinoid potency, and terpenoid potency;
3. 2. A statement indicating that the product has been tested
for contaminants;
4. 3. One or more product warnings to be determined by the
Department Authority; and
5. 4. Any other information the Department Authority deems
necessary.
SECTION 22. AMENDATORY Section 19, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.19), is amended to read as
follows:
Section 427.19 A. A medical marijuana research license may be
issued to a person to grow, cultivate, possess and transfer, by sale
or donation, marijuana pursuant to this act the Oklahoma Medical
Marijuana and Patient Protection Act for the limited research
purposes identified in this section.
B. The annual fee for a medical marijuana research license
shall be Five Hundred Dollars ($500.00) and shall be payable by an
applicant for a medical marijuana research licen se upon submission
ENGR. H. B. NO. 2004 Page 113 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
of his or her their application to the Oklahoma Medical Marijuana
Authority.
C. A medical marijuana research license may be issued for the
following research purposes:
1. To test chemical potency and composition levels;
2. To conduct clinical investigations of marijuana -derived
medicinal products;
3. To conduct research on the efficacy and safety of
administering marijuana as part of medical treatment;
4. To conduct genomic, horticultural or agricultural research;
and
5. To conduct research on marijuana -affiliated products or
systems.
D. 1. As part of the application process for a medical
marijuana research license, an applicant shall submit to the
Authority a description of the research that the applicant intends
to conduct and whether the research will be conducted with a public
institution or using public money. If the research will not be
conducted with a public institution or with public money, the
Authority shall grant the application if it determines that the
applicant meets the criteria in this section.
2. If the research will be conducted with a public institution
or public money, the Department Authority shall review the research
ENGR. H. B. NO. 2004 Page 114 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
project of the applicant to determine if it meets the requirements
of this section and to ass ess the following:
a. the quality, study design, value or impact of the
project,
b. whether the applicant has the appropriate personnel,
expertise, facilities, infrastructure, funding and
human, animal or other approvals in place to
successfully conduct th e project, and
c. whether the amount of marijuana to be grown by the
applicant is consistent with the scope and goals of
the project.
3. If the Authority determines that the research project does
not meet the requirements of this section or assesses the c riteria
to be inadequate, the application shall be denied.
E. A medical marijuana research licensee may only transfer, by
sale or donation, marijuana grown within its operation to other
medical marijuana research licensees. The Department Authority may
revoke a medical marijuana research license for violations of this
section and any other violation of this act the Oklahoma Medical
Marijuana and Patient Protection Act .
F. A medical marijuana research licensee may contract to
perform research in conjuncti on with a public higher education
research institution or another medical marijuana research licensee.
ENGR. H. B. NO. 2004 Page 115 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
G. The growing, cultivating, possessing or transferring, by
sale or donation, of marijuana in accordance with this section and
the rules promulgated pur suant thereto, by a medical marijuana
research licensee shall not be a criminal or civil offense under
state law. A medical marijuana research license shall be issued in
the name of the applicant and shall specify the location in Oklahoma
at which the medical marijuana research licensee intends to operate.
A medical marijuana research licensee shall not allow any other
person to exercise the privilege of the license.
H. If the research conducted includes a public institution or
public money, the Authorit y shall review any reports made by medical
marijuana research licensees under state licensing authority rule
and provide the Authority with its determination on whether the
research project continues to meet research qualifications pursuant
to this section.
SECTION 23. AMENDATORY Section 20, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.20), is amended to read as
follows:
Section 427.20 A. There is hereby created a medical marijuana
education facility license.
B. A medical marijuana education facility license may be issued
to a person to possess or cultivate marijuana for the limited
education and research purposes identified in this section.
ENGR. H. B. NO. 2004 Page 116 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
C. A medical marijuana education facility license may only be
granted to a not-for-profit organization structured under Section
501(c)(3) of the Internal Revenue Code, operating as an Oklahoma
not-for-profit registered organization with the Office of the
Secretary of State.
D. A medical marijuana education facility license may onl y be
granted upon the submission of a an annual fee of Five Hundred
Dollars ($500.00) to the Oklahoma Medical Marijuana Authority.
E. A medical marijuana education facility license may be issued
for the following education and research purposes:
1. To test cultivation techniques, strategies, infrastructure,
mediums, lighting and other related technology;
2. To demonstrate cultivation techniques, strategies,
infrastructure, mediums, lighting and other related technology;
3. To demonstrate the application and use of product
manufacturing technologies;
4. To conduct genomic, horticultural or agricultural research;
and
5. To conduct research on marijuana -affiliated products or
systems.
F. As part of the application process for a medical marijuana
education facility license, an applicant shall submit to the
Authority a description of the project and curriculum that the
applicant intends to conduct and whether the project and curriculum
ENGR. H. B. NO. 2004 Page 117 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
will be conducted with a public institution or using public money.
If the research project and curriculum will not be conducted with a
public institution or with public money, the Authority shall grant
the application. If the research will be conducted with a public
institution or public money, the Authority shall review the research
project of the applicant to determine if it meets the requirements
of this section and to assess the following:
1. The quality, study design, value or impact of the project;
2. Whether the applicant has the appropriate personnel,
expertise, facilities, infrastructure, funding, and human, animal or
other approvals in place to successfully conduct the project; and
3. Whether the amount of marijuana to be grown by the applicant
is consistent with the scope and goals of the project.
If the Authority determines that the education project does not meet
the requirements of this section or assesses the criteria to be
inadequate, the application shall be denied.
G. A medical marijuana education facility licensee may only
transfer, by sale or donation, m arijuana grown within its operation
to medical marijuana research licensees. The Department Authority
may revoke a medical marijuana education facility license for
violations of this section and any other violation of this act
applicable laws, rules and r egulations.
ENGR. H. B. NO. 2004 Page 118 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
H. A medical marijuana education facility licensee may contract
to perform research in conjunction with a public higher education
research institution or another research licensee.
I. The growing, cultivating, possessing or transferring, by
sale or donation, of marijuana in accordance with this section and
the rules and regulations promulgated pursuant thereto, by a medical
marijuana education facility licensee shall not be a criminal or
civil offense under state law. A medical marijuana educ ation
facility license shall be issued in the name of the applicant and
shall specify the location in Oklahoma at which the medical
marijuana education facility licensee intends to operate. A medical
marijuana education facility licensee shall not allow a ny other
person to exercise the privilege of the license.
SECTION 24. AMENDATORY Section 22, Chapter 11, O.S.L.
2019 (63 O.S. Supp. 2020, Section 427.22), is amended to read as
follows:
Section 427.22 A. An All medical marijuana patient and
caregiver licensee records and information, including, without
limitation, an application or renewal and supporting information
submitted by a qualifying patient or designated caregiver under the
provisions of this act including, without limita tion, the Oklahoma
Medical Marijuana and Patient Protection Act and information
regarding the physician of the qualifying patient , shall be
ENGR. H. B. NO. 2004 Page 119 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
considered confidential medical records that are exempt from the
Oklahoma Open Records Act.
B. The licensed medical marijuana dispensary records with
patient information shall be treated as confidential records that
are exempt from the Oklahoma Open Records Act.
C. All financial information provided by an applicant or
licensee in its application to the Authority shall be treated as
confidential records that are exempt from the Oklahoma Open Records
Act.
D. All information provided by an applicant or licensee that
constitutes private business information shall be treated as
confidential records that are exempt from the Oklahoma Open Records
Act.
E. As used in this section, "private business information"
means information that, if disclosed, would give advantage to
competitors or bidders including, but not limited to, information
related to the planning, site location, operations, strategy, or
product development and marketing of an applicant or licensee,
unless approval for release of those records is granted by the
business.
F. All monthly reports, inventory tracking and seed -to-sale
information, data and records subm itted to the Oklahoma Medical
Marijuana Authority shall be treated as confidential and are exempt
from the Oklahoma Open Records Act.
ENGR. H. B. NO. 2004 Page 120 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
G. Except for license information concerning licensed medical
marijuana patients or licensed caregivers, the Authority ma y share
confidential information with the Oklahoma Tax Commission to assist
the Oklahoma Tax Commission in ensuring compliance with applicable
laws, rules and regulations.
SECTION 25. AMENDATORY Section 23, Chapter 11, O.S.L.
2019, as amended by Section 11, Chapter 477, O.S.L. 2019 (63 O.S.
Supp. 2020, Section 427.23), is amended to read as follows:
Section 427.23 A. The State Commissioner of Health Executive
Director of the Oklahoma Medical Marijuana Authority , the Oklahoma
Tax Commission, the State Treasurer, the Secretary of State and the
Director of the Office of Management and Enterprise Services shall
promulgate rules to implement the provisions of this act the
Oklahoma Medical Marijuana and Patient Protection Act .
B. The Food Safety Standards Board Medical Marijuana Advisory
Council, in addition to the powers and duties granted in Section 423
of Title 63 of the Oklahoma Statutes this title, may recommend to
the State Commissioner of Health Executive Director of the Authority
rules relating to all aspects of the safe cultivation and
manufacture manufacturing of medical marijuana products. In
addition to the twelve members required in Section 423 of this
title, the Authority may appoint up to eight additional members.
The makeup of the Medical Marijuana Advisory Council shall include
medical marijuana industry representation.
ENGR. H. B. NO. 2004 Page 121 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
SECTION 26. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 427.24 of Title 63, unless there
is created a duplication in numbering, reads as follows:
A. Whenever an authorized agent of the Oklahoma Medical
Marijuana Authority finds, in whole or in part, that:
1. Any medical marijuana, medical marijuana concentrate or
medical marijuana product fails t o meet the requirements of Sections
420 through 426.1 of Title 63 of the Oklahoma Statutes and the
Oklahoma Medical Marijuana and Patient Protection Act, as it relates
to health and safety;
2. The medical marijuana, medical marijuana concentrate or
medical marijuana product is handled in violation of applicable laws
or rules and regulations of the Authority; or
3. The medical marijuana, medical marijuana concentrate or
medical marijuana product may be poisonous, deleterious to health or
is otherwise unsafe,
a tag or other appropriate marking shall be affixed to the medical
marijuana, medical marijuana concentrate or medical marijuana
product. The tag or other appropriate marking shall give notice
that the medical marijuana, medical marijuana concentrate o r medical
marijuana product is or is suspected of being manufactured,
produced, transferred, sold or offered for sale in violation of
applicable laws or rules and regulations of the Authority. The tag
or other appropriate marking shall also give notice th at the medical
ENGR. H. B. NO. 2004 Page 122 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
marijuana, medical marijuana concentrate or medical marijuana
product is embargoed and shall provide a warning that all persons
shall be prohibited from removing or disposing of the medical
marijuana, medical marijuana concentrate or medical marijuana
product until permission for removal or disposal is given by the
Executive Director of the Authority. It shall be unlawful for any
person to remove or dispose of the embargoed medical marijuana,
medical marijuana concentrate or medical marijuan a product without
permission.
B. 1. If the Executive Director finds that the medical
marijuana, medical marijuana concentrate or medical marijuana
product embargoed pursuant to subsection A of this section does not
meet the requirements of applicable law s or rules and regulations of
the Authority, or is poisonous, deleterious to health or otherwise
unsafe, the Executive Director may institute an action in the
district court, in whose jurisdiction the medical marijuana, medical
marijuana concentrate or med ical marijuana product is embargoed, for
the condemnation and destruction of the medical marijuana, medical
marijuana concentrate or medical marijuana product.
2. If the Executive Director later finds that the embargoed
medical marijuana, medical marijuana concentrate or medical
marijuana product does meet the requirements of applicable laws or
rules and regulations of the Authority and is not poisonous,
ENGR. H. B. NO. 2004 Page 123 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
deleterious to health or otherwise unsafe, the Executive Director
shall remove the embargo.
3. In any court proceeding regarding an embargo, the State
Department of Health, the Oklahoma Medical Marijuana Authority, the
State Commissioner of Health and the Executive Director of the
Authority shall not be held liable if the court finds reasonable
belief for the embargo.
C. If the court finds that the embargoed medical marijuana,
medical marijuana concentrate or medical marijuana product, in whole
or in part, is in violation of any applicable laws or rules and
regulations of the Authority or is poisonous, del eterious to health,
or otherwise unsafe, the medical marijuana, medical marijuana
concentrate or medical marijuana product shall be destroyed under
the supervision of the Executive Director and at the expense of the
owner or defendant. All court costs, fe es, cost of storage and
other proper expenses shall be paid by the owner or defendant of the
medical marijuana, medical marijuana concentrate or medical
marijuana product. The court may order that the medical marijuana,
medical marijuana concentrate or me dical marijuana product be
delivered to the owner or defendant for appropriate labeling or
processing under the supervision of the Executive Director if:
1. The violation can be corrected by proper processing of the
medical marijuana, medical marijuana co ncentrate or medical
marijuana product;
ENGR. H. B. NO. 2004 Page 124 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. All costs, fees and expenses have been paid; and
3. A sufficient bond is executed and conditioned for
appropriate labeling or processing as the court may require.
The expense of supervision shall be paid to the Authority by the
person obtaining release of the medical marijuana, medical marijuana
concentrate or medical marijuana product under bond.
SECTION 27. AMENDATORY Section 2, Chapter 337, O.S.L.
2019 (63 O.S. Supp. 2020, Section 428. 1), is amended to read as
follows:
Section 428.1 As used in this act the Oklahoma Medical
Marijuana Waste Management Act :
1. "Authority" shall mean the Oklahoma Medical Marijuana
Authority, or successor agency;
2. "Commercial licensee" shall mean any pe rson or entity issued
a license by the Oklahoma Medical Marijuana Authority, or successor
agency, to conduct commercial business in this state;
3. "Disposal" shall mean the final disposition of medical
marijuana waste by either a process which renders the waste unusable
and unrecognizable through physical destruction or a recycling
process;
4. "Facility" shall mean a location the licensed or permitted
premises where the disposal of medical marijuana waste takes place
by a licensee;
ENGR. H. B. NO. 2004 Page 125 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5. "License" shall mea n a medical marijuana waste disposal
license;
6. "Licensee" shall mean the holder of a medical marijuana
waste disposal license;
7. "Medical marijuana waste" shall mean :
a. unused, surplus, returned or out -of-date marijuana and
plant debris of the plant of the genus Cannabis,
including dead plants and all unused plant parts,
except the term shall not include seeds, roots, stems,
stalks and fan leaves ,
b. all product which is deemed to fail laboratory testing
and cannot be remediated, and
c. all product and inventory from commercial licensees,
medical marijuana research facilities and medical
marijuana education facilities that have gone out of
business and are not subject to the provisions of
Section 1560 of Title 12 of the Oklahoma Statutes ; and
8. "Medical marijuana waste disposal license" shall mean a
license issued by the Oklahoma Medical Marijuana Authority, or
successor agency.
SECTION 28. AMENDATORY Section 3, Chapter 337, O.S.L.
2019 (63 O.S. Supp. 2020, Section 429), is am ended to read as
follows:
ENGR. H. B. NO. 2004 Page 126 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 429. A. Medical marijuana waste shall be subject to
the provisions of this act the Oklahoma Medical Marijuana Waste
Management Act and shall not be subject to the provisions of the
Uniform Controlled Dangerous Substances Act. Nothing in this act
the Oklahoma Medical Marijuana Waste Management Act shall alter or
affect the jurisdictional areas of environmental responsibility of
the Department of Environmental Quality as provided for in Title 27A
of the Oklahoma Statutes.
B. Commercial licensees, medical marijuana research facilities
and medical marijuana education facilities shall be authorized to
destroy the following marijuana plant parts without being required
to utilize the services of a medical marijuana waste dispos al
facility:
1. Root balls Roots;
2. Stems;
3. Fan leaves; and
4. Seeds; and
5. Stalks.
Unless restricted by local ordinance, commercial licensees,
medical marijuana research facilities and medical marijuana
education facilities shall be authorized to destroy the above-listed
marijuana plant parts on -site by open burning, incineration,
burying, mulching, composting or any other technique approved by the
Department of Environmental Quality.
ENGR. H. B. NO. 2004 Page 127 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
C. Commercial licensees, medical marijuana research facilities
and medical marijuana education facilities engaged in the disposal
of medical marijuana waste shall create and maintain documentation
on a form prescribed by the Oklahoma Medical Marijuana Authority
that includes precise weights or counts of medical marij uana waste
and the manner in which the medical marijuana waste is disposed.
Such documentation shall contain a witness affidavit and signature
attesting to the lawful disposal of the medical marijuana waste
under penalty of perjury. All disposal records shall be maintained
by commercial licensees, medical marijuana research facilities and
medical marijuana educational facilities for a period of five (5)
years and shall be subject to inspection and auditing by the
Authority.
SECTION 29. AMENDATORY Section 4, Chapter 337, O.S.L.
2019 (63 O.S. Supp. 2020, Section 430), is amended to read as
follows:
Section 430. A. There is hereby created and authorized a
medical marijuana waste disposal license. A person or entity in
possession of a medical marijuana waste disposal license shall be
entitled to possess, transport and dispose of medical marijuana
waste. No person or entity shall possess, transport or dispose of
medical marijuana waste without a valid medical marijuana waste
disposal license. The Oklahoma Medical Marijuana Authority shall
issue licenses upon proper application by a licensee and
ENGR. H. B. NO. 2004 Page 128 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
determination by the Authority that the proposed site and facility
are physically and technically suitable. Upon a finding that a
proposed medical marijuana waste disposal facility is not physically
or technically suitable, the Authority shall deny the license. The
Authority may, upon determining that public health or safety
requires emergency action, issue a temporary license for treatment
or storage of medical marijuana waste for a period not to exceed
ninety (90) days. The Authority shall not, for the first year of
the licensure program until November 1, 2021 , issue more than ten
licenses. Upon the conclusion of the first year, the Author ity
shall assess the need for additional licenses and shall, if
demonstrated, increase Beginning November 1, 2021, there shall be no
limit to the number of medical marijuana waste disposal licenses as
deemed necessary issued by the Authority.
B. Entities applying for a medical marijuana waste disposal
license shall undergo the following screening process:
1. Complete an application form, as prescribed by the
Authority, which shall include:
a. an attestation that the applicant is authorized to
make application on behalf of the entity,
b. full name of the organization,
c. trade name, if applicable,
d. type of business organization,
e. complete mailing address,
ENGR. H. B. NO. 2004 Page 129 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
f. an attestation that the commercial entity will not be
located on tribal land,
g. telephone number and email address of the entity, and
h. name, residential address and date of birth of each
owner and each member, manager and board member, if
applicable;
2. The application for a medical marijuana waste disposal
license made by an individual on his or her own behalf shall be on
the form prescribed by the Authority and shall include, but not be
limited to:
a. the first, middle and last name of the applicant and
suffix, if applicable,
b. the residence address and mailing address of the
applicant,
c. the date of birth of the applicant,
d. the preferred telephone number and email address of
the applicant,
e. an attestation that the information provided by the
applicant is true and correct, and
f. a statement signed by the applicant pledging not to
divert marijuana to any individual or entity that is
not lawfully entitled to possess marijuana; and
3. Each application shall be accompanied by the following
documentation:
ENGR. H. B. NO. 2004 Page 130 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. a list of all persons or entities that have an
ownership interest in the entity,
b. a certificate of good standing from the Oklahoma
Secretary of State, if applicable,
c. an Affidavit of Lawful Presence for each owner,
d. proof that the proposed location of the disposal
facility is at least one thousand (1,000) feet from a
public or private elementary, middle or high school.
The distance indicated in this subparagraph shall be
measured from any entrance the nearest property line
of the public or private elementary, middle or high
school to the nearest property line point front
entrance of the disposal facility. If any public or
private elementary, middle or high school is
established within one thousand (1,000) feet of any
disposal facility after such disposal facility has
been licensed, the provisions of this subparagraph
shall not be a deterrent to the renewal of such
license or warrant revocation of the license , and
e. documents establishing the applicant, the members,
managers and board members, if applicable, and
seventy-five percent (75%) of the ownership interests
are Oklahoma resident s as established in Section 420
ENGR. H. B. NO. 2004 Page 131 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
et seq. of Title 63 of the Oklahoma Statutes of this
title, as it relates to proof of residency.
C. No license shall be issued except upon proof of sufficient
liability insurance and financial responsibility. Liability
insurance shall be provided by the applicant and shall apply to
sudden and nonsudden bodily injury or property damage on, below or
above the surface, as required by the rules of the Authority. Such
insurance shall be maintained for the period of operation of the
facility and shall provide coverage for damages resulting from
operation of the facility during operation and after closing . In
lieu of liability insurance required by this subsection, an
equivalent amount of cash, securities, bond or alternate finan cial
assurance, of a type and in an amount acceptable to the Authority,
may be substituted; provided, that such deposit shall be maintained
for a period of five (5) years after the date of last operation of
the facility.
D. Submission of an application fo r a medical marijuana waste
disposal license shall constitute permission for entry to and
inspection of the facility of the licensee during hours of operation
and other reasonable times. Refusal to permit such entry of
inspection shall constitute grounds for the nonrenewal, suspension
or revocation of a license. The Authority may perform an annual
unannounced on-site inspection of the operations and any facility of
the licensee. If the Authority receives a complaint concerning
ENGR. H. B. NO. 2004 Page 132 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
noncompliance by a licensee with the provisions of this act the
Oklahoma Medical Marijuana Waste Management Act , the Authority may
conduct additional unannounced , on-site inspections beyond an annual
inspection. The Authority shall refer all complaints alleging
criminal activity th at are made against a licensed facility to
appropriate state or local law enforcement authorities.
E. The Authority shall issue a an annual permit for each
medical marijuana waste disposal facility operated by a licensee. A
permit shall be issued only up on proper application by a licensee
and determination by the Authority that the proposed site and
facility are physically and technically suitable. Upon a finding
that a proposed medical marijuana waste disposal facility is not
physically or technically s uitable, the Authority shall deny the
permit. The Authority shall have the authority to revoke a permit
upon a finding that the site and facility are not physically and
technically suitable for processing. The Authority may, upon
determining that public health or safety requires emergency action,
issue a temporary permit for treatment or storage of medical
marijuana waste for a period not to exceed ninety (90) days.
F. The cost of a medical marijuana waste disposal license shall
be Five Thousand Dollars ($5,000.00) for the initial license. The
cost of a medical marijuana waste disposal facility permit shall be
Five Hundred Dollars ($500.00). A medical marijuana waste disposal
facility permit that has been revoked shall be reinstated upon
ENGR. H. B. NO. 2004 Page 133 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
remittance of a reinstatement fee of Five Hundred Dollars ($500.00)
to restore the facility permit. All license and permit fees shall
be deposited into the Public Health Special Fund Oklahoma Medical
Marijuana Authority Revolving Fund as provided in Section 1-107
427.5 of Title 63 of the Oklahoma Statutes this title.
G. The holder of a medical marijuana waste disposal license
shall not be required to obtain a medical marijuana transporter
license provided for in the Oklahoma Medical Marijuana and Patient
Protection Act for purposes of transporting medical marijuana waste.
H. All commercial licensees, as defined in Section 2 428.1 of
this act title, shall utilize a licensed medical marijuana waste
disposal service to process all medical marijuana waste generated by
the licensee.
I. The State Commissioner of Health Oklahoma Medical Marijuana
Authority shall promulgate rules for the implementation of this act
the Oklahoma Medical Marijuana Waste Management Act . Promulgated
rules shall address disposal process standards, s ite security and
any other subject matter deemed necessary by the Authority.
SECTION 30. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 255.2 of Title 68, unless there
is created a duplication in nu mbering, reads as follows:
The State Department of Health and the Oklahoma Tax Commission
shall enter into a contract whereby the Tax Commission shall ha ve
authority to assess, collect and enforce the seven percent (7%) tax
ENGR. H. B. NO. 2004 Page 134 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
on retail medical marijuana sale s and any penalties and interest
thereon. Such assessment, collection and enforcement authority
shall apply to any tax and any penalty or interest liability on
retail medical marijuana sales existing at the time of contracting.
The contract shall provide for the assessment, collection and
enforcement of the tax on retail medical marijuana sales in the same
manner as the administration, collection and enforcement of any tax
payable by any taxpayer subject to taxation under any state tax law.
For providing such collection assistance, the Tax Commission shall
charge the State Department of Health a fee of one and five -tenths
percent (1.5%) of the gross collection proceeds. All funds retained
by the Tax Commission for the collection services shall be deposit ed
in the Tax Commission Reimbursement Fund in the State Treasury.
SECTION 31. AMENDATORY 68 O.S. 2011, Section 2358, as
last amended by Section 5, Chapter 201, O.S.L. 2019 (68 O.S. Supp.
2020, Section 2358), is amended to read as follows:
Section 2358. For all tax years beginning after December 31,
1981, taxable income and adjusted gross income shall be adjusted to
arrive at Oklahoma taxable income and Oklahoma adjusted gross income
as required by this section.
A. The taxable income of any taxpayer shall be adjusted to
arrive at Oklahoma taxable income for corporations and Oklahoma
adjusted gross income for individuals, as follows:
ENGR. H. B. NO. 2004 Page 135 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. There shall be added interest income on obligations of any
state or political subdivision theret o which is not otherwise
exempted pursuant to other laws of this state, to the extent that
such interest is not included in taxable income and adjusted gross
income.
2. There shall be deducted amounts included in such income that
the state is prohibited f rom taxing because of the provisions of the
Federal Constitution, the State Constitution, federal laws or laws
of Oklahoma.
3. The amount of any federal net operating loss deduction shall
be adjusted as follows:
a. For carryovers and carrybacks to taxable years
beginning before January 1, 1981, the amount of any
net operating loss deduction allowed to a taxpayer for
federal income tax purposes shall be reduced to an
amount which is the same portion thereof as the loss
from sources within this state, as det ermined pursuant
to this section and Section 2362 of this title, for
the taxable year in which such loss is sustained is of
the total loss for such year;
b. For carryovers and carrybacks to taxable years
beginning after December 31, 1980, the amount of any
net operating loss deduction allowed for the taxable
year shall be an amount equal to the aggregate of the
ENGR. H. B. NO. 2004 Page 136 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Oklahoma net operating loss carryovers and carrybacks
to such year. Oklahoma net operating losses shall be
separately determined by reference to Se ction 172 of
the Internal Revenue Code, 26 U.S.C., Section 172, as
modified by the Oklahoma Income Tax Act, Section 2351
et seq. of this title, and shall be allowed without
regard to the existence of a federal net operating
loss. For tax years beginning a fter December 31,
2000, and ending before January 1, 2008, the years to
which such losses may be carried shall be determined
solely by reference to Section 172 of the Internal
Revenue Code, 26 U.S.C., Section 172, with the
exception that the terms "net operating loss" and
"taxable income" shall be replaced with "Oklahoma net
operating loss" and "Oklahoma taxable income ". For
tax years beginning after December 31, 2007, and
ending before January 1, 2009, years to which such
losses may be carried back shall be limited to two (2)
years. For tax years beginning after December 31,
2008, the years to which such losses may be carried
back shall be determined solely by reference to
Section 172 of the Internal Revenue Code, 26 U.S.C.,
Section 172, with the exceptio n that the terms "net
operating loss" and "taxable income" shall be replaced
ENGR. H. B. NO. 2004 Page 137 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
with "Oklahoma net operating loss " and "Oklahoma
taxable income".
4. Items of the following nature shall be allocated as
indicated. Allowable deductions attributable to items se parately
allocable in subparagraphs a, b and c of this paragraph, whether or
not such items of income were actually received, shall be allocated
on the same basis as those items:
a. Income from real and tangible personal property, such
as rents, oil and mi ning production or royalties, and
gains or losses from sales of such property, shall be
allocated in accordance with the situs of such
property;
b. Income from intangible personal property, such as
interest, dividends, patent or copyright royalties,
and gains or losses from sales of such property, shall
be allocated in accordance with the domiciliary situs
of the taxpayer, except that:
(1) where such property has acquired a nonunitary
business or commercial situs apart from the
domicile of the taxpayer such income shall be
allocated in accordance with such business or
commercial situs; interest income from
investments held to generate working capital for
a unitary business enterprise shall be included
ENGR. H. B. NO. 2004 Page 138 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
in apportionable income; a resident trust or
resident estate shall be treated as having a
separate commercial or business situs insofar as
undistributed income is concerned, but shall not
be treated as having a separate commercial or
business situs insofar as distributed income is
concerned,
(2) for taxable years beginning after December 31,
2003, capital or ordinary gains or losses from
the sale of an ownership interest in a publicly
traded partnership, as defined by Section 7704(b)
of the Internal Revenue Code, shall be allocated
to this state in the ratio of t he original cost
of such partnership's tangible property in this
state to the original cost of such partnership 's
tangible property everywhere, as determined at
the time of the sale; if more than fifty percent
(50%) of the value of the partnership 's assets
consists of intangible assets, capital or
ordinary gains or losses from the sale of an
ownership interest in the partnership shall be
allocated to this state in accordance with the
sales factor of the partnership for its first
full tax period immediately preceding its tax
ENGR. H. B. NO. 2004 Page 139 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
period during which the ownership interest in the
partnership was sold; the provisions of this
division shall only apply if the capital or
ordinary gains or losses from the sale of an
ownership interest in a partnership do not
constitute qualifying gain receiving capital
treatment as defined in subparagraph a of
paragraph 2 of subsection F of this section,
(3) income from such property which is required to be
allocated pursuant to the provisions of paragraph
5 of this subsection shall be a llocated as herein
provided;
c. Net income or loss from a business activity which is
not a part of business carried on within or without
the state of a unitary character shall be separately
allocated to the state in which such activity is
conducted;
d. In the case of a manufacturing or processing
enterprise the business of which in Oklahoma consists
solely of marketing its products by:
(1) sales having a situs without this state, shipped
directly to a point from without the state to a
purchaser within the s tate, commonly known as
interstate sales,
ENGR. H. B. NO. 2004 Page 140 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(2) sales of the product stored in public warehouses
within the state pursuant to "in transit"
tariffs, as prescribed and allowed by the
Interstate Commerce Commission, to a purchaser
within the state,
(3) sales of the product stored in public warehouses
within the state where the shipment to such
warehouses is not covered by "in transit"
tariffs, as prescribed and allowed by the
Interstate Commerce Commission, to a purchaser
within or without the state,
the Oklahoma net income shall, at the option of the
taxpayer, be that portion of the total net income of
the taxpayer for federal income tax purposes derived
from the manufacture and/or processing and sales
everywhere as determined by the ratio of the sales
defined in this section made to the purchaser within
the state to the total sales everywhere. The term
"public warehouse" as used in this subparagraph means
a licensed public warehouse, the principal business of
which is warehousing merchandise for the public;
e. In the case of insurance companies, Oklahoma taxable
income shall be taxable income of the taxpayer for
federal tax purposes, as adjusted for the adjustments
ENGR. H. B. NO. 2004 Page 141 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
provided pursuant to the provisions of paragraphs 1
and 2 of this subsection, apportioned as follo ws:
(1) except as otherwise provided by division (2) of
this subparagraph, taxable income of an insurance
company for a taxable year shall be apportioned
to this state by multiplying such income by a
fraction, the numerator of which is the direct
premiums written for insurance on property or
risks in this state, and the denominator of which
is the direct premiums written for insurance on
property or risks everywhere. For purposes of
this subsection, the term "direct premiums
written" means the total amount of direct
premiums written, assessments and annuity
considerations as reported for the taxable year
on the annual statement filed by the company with
the Insurance Commissioner in the form approved
by the National Association of Insurance
Commissioners, or such other form as may be
prescribed in lieu thereof,
(2) if the principal source of premiums written by an
insurance company consists of premiums for
reinsurance accepted by it, the taxable income of
such company shall be apportioned to this state
ENGR. H. B. NO. 2004 Page 142 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
by multiplying such income by a fraction, the
numerator of which is the sum of (a) direct
premiums written for insurance on property or
risks in this state, plus (b) premiums written
for reinsurance accepted in respect of property
or risks in this state, and th e denominator of
which is the sum of (c) direct premiums written
for insurance on property or risks everywhere,
plus (d) premiums written for reinsurance
accepted in respect of property or risks
everywhere. For purposes of this paragraph,
premiums written for reinsurance accepted in
respect of property or risks in this state,
whether or not otherwise determinable, may at the
election of the company be determined on the
basis of the proportion which premiums written
for insurance accepted from companies
commercially domiciled in Oklahoma bears to
premiums written for reinsurance accepted from
all sources, or alternatively in the proportion
which the sum of the direct premiums written for
insurance on property or risks in this state by
each ceding company fro m which reinsurance is
accepted bears to the sum of the total direct
ENGR. H. B. NO. 2004 Page 143 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
premiums written by each such ceding company for
the taxable year.
5. The net income or loss remaining after the separate
allocation in paragraph 4 of this subsection, being that which i s
derived from a unitary business enterprise, shall be apportioned to
this state on the basis of the arithmetical average of three factors
consisting of property, payroll and sales or gross revenue
enumerated as subparagraphs a, b and c of this paragraph. Net
income or loss as used in this paragraph includes that derived from
patent or copyright royalties, purchase discounts, and interest on
accounts receivable relating to or arising from a business activity,
the income from which is apportioned pursuant t o this subsection,
including the sale or other disposition of such property and any
other property used in the unitary enterprise. Deductions used in
computing such net income or loss shall not include taxes based on
or measured by income. Provided, for corporations whose property
for purposes of the tax imposed by Section 2355 of this title has an
initial investment cost equaling or exceeding Two Hundred Million
Dollars ($200,000,000.00) and such investment is made on or after
July 1, 1997, or for corpor ations which expand their property or
facilities in this state and such expansion has an investment cost
equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
over a period not to exceed three (3) years, and such expansion is
commenced on or after January 1, 2000, the three factors shall be
ENGR. H. B. NO. 2004 Page 144 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
apportioned with property and payroll, each comprising twenty -five
percent (25%) of the apportionment factor and sales comprising fifty
percent (50%) of the apportionment factor. The apportionment
factors shall be computed as follows:
a. The property factor is a fraction, the numerator of
which is the average value of the taxpayer 's real and
tangible personal property owned or rented and used in
this state during the tax period and the denominator
of which is the average value of all the taxpayer 's
real and tangible personal property everywhere owned
or rented and used during the tax period.
(1) Property, the income from which is separately
allocated in paragraph 4 of this subsection,
shall not be included i n determining this
fraction. The numerator of the fraction shall
include a portion of the investment in
transportation and other equipment having no
fixed situs, such as rolling stock, buses, trucks
and trailers, including machinery and equipment
carried thereon, airplanes, salespersons '
automobiles and other similar equipment, in the
proportion that miles traveled in Oklahoma by
such equipment bears to total miles traveled,
ENGR. H. B. NO. 2004 Page 145 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(2) Property owned by the taxpayer is valued at its
original cost. Property rente d by the taxpayer
is valued at eight times the net annual rental
rate. Net annual rental rate is the annual
rental rate paid by the taxpayer, less any annual
rental rate received by the taxpayer from
subrentals,
(3) The average value of property shall be determined
by averaging the values at the beginning and
ending of the tax period but the Oklahoma Tax
Commission may require the averaging of monthly
values during the tax period if reasonably
required to reflect properly the average value of
the taxpayer's property;
b. The payroll factor is a fraction, the numerator of
which is the total compensation for services rendered
in the state during the tax period, and the
denominator of which is the total compensation for
services rendered everywhere during the t ax period.
"Compensation", as used in this subsection means those
paid-for services to the extent related to the unitary
business but does not include officers ' salaries,
wages and other compensation.
ENGR. H. B. NO. 2004 Page 146 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(1) In the case of a transportation enterprise, the
numerator of the fraction shall include a portion
of such expenditure in connection with employees
operating equipment over a fixed route, such as
railroad employees, airline pilots, or bus
drivers, in this state only a part of the time,
in the proportion th at mileage traveled in
Oklahoma bears to total mileage traveled by such
employees,
(2) In any case the numerator of the fraction shall
include a portion of such expenditures in
connection with itinerant employees, such as
traveling salespersons, in this st ate only a part
of the time, in the proportion that time spent in
Oklahoma bears to total time spent in furtherance
of the enterprise by such employees;
c. The sales factor is a fraction, the numerator of which
is the total sales or gross revenue of the ta xpayer in
this state during the tax period, and the denominator
of which is the total sales or gross revenue of the
taxpayer everywhere during the tax period. "Sales",
as used in this subsection does not include sales or
gross revenue which are separately allocated in
paragraph 4 of this subsection.
ENGR. H. B. NO. 2004 Page 147 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(1) Sales of tangible personal property have a situs
in this state if the property is delivered or
shipped to a purchaser other than the United
States government, within this state regardless
of the FOB point or other conditions of the sale;
or the property is shipped from an office, store,
warehouse, factory or other place of storage in
this state and (a) the purchaser is the United
States government or (b) the taxpayer is not
doing business in the state of the destination of
the shipment.
(2) In the case of a railroad or interurban railway
enterprise, the numerator of the fraction shall
not be less than the allocation of revenues to
this state as shown in its annual report to the
Corporation Commission.
(3) In the case of an airline, truck or bus
enterprise or freight car, tank car, refrigerator
car or other railroad equipment enterprise, the
numerator of the fraction shall include a portion
of revenue from interstate transportation in the
proportion that inters tate mileage traveled in
Oklahoma bears to total interstate mileage
traveled.
ENGR. H. B. NO. 2004 Page 148 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(4) In the case of an oil, gasoline or gas pipeline
enterprise, the numerator of the fraction shall
be either the total of traffic units of the
enterprise within Oklahoma or the revenue
allocated to Oklahoma based upon miles moved, at
the option of the taxpayer, and the denominator
of which shall be the total of traffic units of
the enterprise or the revenue of the enterprise
everywhere as appropriate to the numerator. A
"traffic unit" is hereby defined as the
transportation for a distance of one (1) mile of
one (1) barrel of oil, one (1) gallon of gasoline
or one thousand (1,000) cubic feet of natural or
casinghead gas, as the case may be.
(5) In the case of a telephone or telegr aph or other
communication enterprise, the numerator of the
fraction shall include that portion of the
interstate revenue as is allocated pursuant to
the accounting procedures prescribed by the
Federal Communications Commission; provided that
in respect to each corporation or business entity
required by the Federal Communications Commission
to keep its books and records in accordance with
a uniform system of accounts prescribed by such
ENGR. H. B. NO. 2004 Page 149 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Commission, the intrastate net income shall be
determined separately in the manner provided by
such uniform system of accounts and only the
interstate income shall be subject to allocation
pursuant to the provisions of this subsection.
Provided further, that the gross revenue factors
shall be those as are determined pursuant to the
accounting procedures prescribed by the Federal
Communications Commission.
In any case where the apportionment of the three factors
prescribed in this paragraph attributes to Oklahoma a portion of net
income of the enterprise out of all appropriate proportion to the
property owned and/or business transacted within this state, because
of the fact that one or more of the factors so prescribed are not
employed to any appreciable extent in furtherance of the enterprise;
or because one or more factors not so prescribed are employed to a
considerable extent in furtherance of the enterprise; or because of
other reasons, the Tax Commission is empowered to permit, after a
showing by taxpayer that an excessive portion of net income has been
attributed to Oklaho ma, or require, when in its judgment an
insufficient portion of net income has been attributed to Oklahoma,
the elimination, substitution, or use of additional factors, or
reduction or increase in the weight of such prescribed factors.
Provided, however, that any such variance from such prescribed
ENGR. H. B. NO. 2004 Page 150 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
factors which has the effect of increasing the portion of net income
attributable to Oklahoma must not be inherently arbitrary, and
application of the recomputed final apportionment to the net income
of the enterprise must attribute to Oklahoma only a reasonable
portion thereof.
6. For calendar years 1997 and 1998, the owner of a new or
expanded agricultural commodity processing facility in this state
may exclude from Oklahoma taxable income, or in the case of an
individual, the Oklahoma adjusted gross income, fifteen percent
(15%) of the investment by the owner in the new or expanded
agricultural commodity processing facility. For calendar year 1999,
and all subsequent years, the percentage, not to exceed fiftee n
percent (15%), available to the owner of a new or expanded
agricultural commodity processing facility in this state claiming
the exemption shall be adjusted annually so that the total estimated
reduction in tax liability does not exceed One Million Dolla rs
($1,000,000.00) annually. The Tax Commission shall promulgate rules
for determining the percentage of the investment which each eligible
taxpayer may exclude. The exclusion provided by this paragraph
shall be taken in the taxable year when the investm ent is made. In
the event the total reduction in tax liability authorized by this
paragraph exceeds One Million Dollars ($1,000,000.00) in any
calendar year, the Tax Commission shall permit any excess over One
Million Dollars ($1,000,000.00) and shall fac tor such excess into
ENGR. H. B. NO. 2004 Page 151 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the percentage for subsequent years. Any amount of the exemption
permitted to be excluded pursuant to the provisions of this
paragraph but not used in any year may be carried forward as an
exemption from income pursuant to the provisi ons of this paragraph
for a period not exceeding six (6) years following the year in which
the investment was originally made.
For purposes of this paragraph:
a. "Agricultural commodity processing facility " means
building, structures, fixtures and improvem ents used
or operated primarily for the processing or production
of marketable products from agricultural commodities.
The term shall also mean a dairy operation that
requires a depreciable investment of at least Two
Hundred Fifty Thousand Dollars ($250,0 00.00) and which
produces milk from dairy cows. The term does not
include a facility that provides only, and nothing
more than, storage, cleaning, drying or transportation
of agricultural commodities, and
b. "Facility" means each part of the facility whic h is
used in a process primarily for:
(1) the processing of agricultural commodities,
including receiving or storing agricultural
commodities, or the production of milk at a dairy
operation,
ENGR. H. B. NO. 2004 Page 152 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(2) transporting the agricultural commodities or
product before, during or after the processing,
or
(3) packaging or otherwise preparing the product for
sale or shipment.
7. Despite any provision to the contrary in paragraph 3 of this
subsection, for taxable years beginning after December 31, 1999, in
the case of a taxpayer which has a farming loss, such farming loss
shall be considered a net operating loss carryback in accordance
with and to the extent of the Internal Revenue Code, 26 U.S.C.,
Section 172(b)(G). However, the amount of the net operating loss
carryback shall not exceed the lesser of:
a. Sixty Thousand Dollars ($60,000.00), or
b. the loss properly shown on Schedule F of the Internal
Revenue Service Form 1040 reduced by one -half (1/2) of
the income from all other sources other than reflected
on Schedule F.
8. In taxable years beginning after December 31, 1995, all
qualified wages equal to the federal income tax credit set forth in
26 U.S.C.A., Section 45A, shall be deducted from taxable income.
The deduction allowed pursuant to this paragraph shall only be
permitted for the tax years in which the federal tax credit pursuant
to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
ENGR. H. B. NO. 2004 Page 153 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
paragraph, "qualified wages" means those wages used to calculate the
federal credit pursuant to 26 U.S.C.A., Section 45A.
9. In taxable years beginning after December 31, 2005, an
employer that is eligible for and utilizes the Safety Pays OSHA
Consultation Service provided by the Oklahoma Department of Labor
shall receive an exemption from taxable income in the amount of One
Thousand Dollars ($1,000.00) for the tax year that the service is
utilized.
10. For taxable years beginning on or after January 1, 2010,
there shall be added to Oklahoma taxable income an amount equal to
the amount of deferred income not included in such taxable income
pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
as amended by Section 1231 of the American Recovery and Reinvestment
Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
Oklahoma taxable income an amount equal to the amount of deferred
income included in such taxable income pursuant to Section 108(i)(1)
of the Internal Revenue Code by Section 1231 of the American
Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
11. For taxable years beginning on or after Ja nuary 1, 2019,
there shall be subtracted from Oklahoma taxable income or adjusted
gross income any item of income or gain, and there shall be added to
Oklahoma taxable income or adjusted gross income any item of loss or
deduction that in the absence of an election pursuant to the
provisions of the Pass -Through Entity Tax Equity Act of 2019 would
ENGR. H. B. NO. 2004 Page 154 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
be allocated to a member or to an indirect member of an electing
pass-through entity pursuant to Section 2351 et seq. of this title,
if (i) the electing pass -through entity has accounted for such item
in computing its Oklahoma net entity income or loss pursuant to the
provisions of the Pass -Through Entity Tax Equity Act of 2019, and
(ii) the total amount of tax attributable to any resulting Oklahoma
net entity income has been paid. The Oklahoma Tax Commission shall
promulgate rules for the reporting of such exclusion to direct and
indirect members of the electing pass -through entity. As used in
this paragraph, "electing pass-through entity", "indirect member",
and "member" shall be defined in the same manner as prescribed by
Section 2 2355.1P-2 of this act title. Notwithstanding the
application of this paragraph, the adjusted tax basis of any
ownership interest in a pass -through entity for purposes of Section
2351 et seq. of this title shall be equal to its adjusted tax basis
for federal income tax purposes.
B. 1. The taxable income of any corporation shall be further
adjusted to arrive at Oklahoma taxable income, except those
corporations electing treatment as pro vided in subchapter S of the
Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
2365 of this title, deductions pursuant to the provisions of the
Accelerated Cost Recovery System as defined and allowed in the
Economic Recovery Tax Act of 19 81, Public Law 97-34, 26 U.S.C.,
Section 168, for depreciation of assets placed into service after
ENGR. H. B. NO. 2004 Page 155 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
December 31, 1981, shall not be allowed in calculating Oklahoma
taxable income. Such corporations shall be allowed a deduction for
depreciation of assets pl aced into service after December 31, 1981,
in accordance with provisions of the Internal Revenue Code, 26
U.S.C., Section 1 et seq., in effect immediately prior to the
enactment of the Accelerated Cost Recovery System. The Oklahoma tax
basis for all such assets placed into service after December 31,
1981, calculated in this section shall be retained and utilized for
all Oklahoma income tax purposes through the final disposition of
such assets.
Notwithstanding any other provisions of the Oklahoma Income Tax
Act, Section 2351 et seq. of this title, or of the Internal Revenue
Code to the contrary, this subsection shall control calculation of
depreciation of assets placed into service after December 31, 1981,
and before January 1, 1983.
For assets placed in ser vice and held by a corporation in which
accelerated cost recovery system was previously disallowed, an
adjustment to taxable income is required in the first taxable year
beginning after December 31, 1982, to reconcile the basis of such
assets to the basis allowed in the Internal Revenue Code. The
purpose of this adjustment is to equalize the basis and allowance
for depreciation accounts between that reported to the Internal
Revenue Service and that reported to Oklahoma.
ENGR. H. B. NO. 2004 Page 156 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. For tax years beginning on or af ter January 1, 2009, and
ending on or before December 31, 2009, there shall be added to
Oklahoma taxable income any amount in excess of One Hundred Seventy -
five Thousand Dollars ($175,000.00) which has been deducted as a
small business expense under Intern al Revenue Code, Section 179 as
provided in the American Recovery and Reinvestment Act of 2009.
C. 1. For taxable years beginning after December 31, 1987, the
taxable income of any corporation shall be further adjusted to
arrive at Oklahoma taxable incom e for transfers of technology to
qualified small businesses located in Oklahoma. Such transferor
corporation shall be allowed an exemption from taxable income of an
amount equal to the amount of royalty payment received as a result
of such transfer; provi ded, however, such amount shall not exceed
ten percent (10%) of the amount of gross proceeds received by such
transferor corporation as a result of the technology transfer. Such
exemption shall be allowed for a period not to exceed ten (10) years
from the date of receipt of the first royalty payment accruing from
such transfer. No exemption may be claimed for transfers of
technology to qualified small businesses made prior to January 1,
1988.
2. For purposes of this subsection:
a. "Qualified small busine ss" means an entity, whether
organized as a corporation, partnership, or
proprietorship, organized for profit with its
ENGR. H. B. NO. 2004 Page 157 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
principal place of business located within this state
and which meets the following criteria:
(1) Capitalization of not more than Two Hun dred Fifty
Thousand Dollars ($250,000.00),
(2) Having at least fifty percent (50%) of its
employees and assets located in Oklahoma at the
time of the transfer, and
(3) Not a subsidiary or affiliate of the transferor
corporation;
b. "Technology" means a proprietary process, formula,
pattern, device or compilation of scientific or
technical information which is not in the public
domain;
c. "Transferor corporation " means a corporation which is
the exclusive and undisputed owner of the technology
at the time the transfer is made; and
d. "Gross proceeds" means the total amount of
consideration for the transfer of technology, whether
the consideration is in money or otherwise.
D. 1. For taxable years beginning after December 31, 2005, the
taxable income of any c orporation, estate or trust, shall be further
adjusted for qualifying gains receiving capital treatment. Such
corporations, estates or trusts shall be allowed a deduction from
Oklahoma taxable income for the amount of qualifying gains receiving
ENGR. H. B. NO. 2004 Page 158 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
capital treatment earned by the corporation, estate or trust during
the taxable year and included in the federal taxable income of such
corporation, estate or trust.
2. As used in this subsection:
a. "qualifying gains receiving capital treatment " means
the amount of net capital gains, as defined in Section
1222(11) of the Internal Revenue Code, included in the
federal income tax return of the corporation, estate
or trust that result from:
(1) the sale of real property or tangible personal
property located within Okl ahoma that has been
directly or indirectly owned by the corporation,
estate or trust for a holding period of at least
five (5) years prior to the date of the
transaction from which such net capital gains
arise,
(2) the sale of stock or on the sale of an ow nership
interest in an Oklahoma company, limited
liability company, or partnership where such
stock or ownership interest has been directly or
indirectly owned by the corporation, estate or
trust for a holding period of at least three (3)
years prior to the date of the transaction from
which the net capital gains arise, or
ENGR. H. B. NO. 2004 Page 159 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(3) the sale of real property, tangible personal
property or intangible personal property located
within Oklahoma as part of the sale of all or
substantially all of the assets of an Oklah oma
company, limited liability company, or
partnership where such property has been directly
or indirectly owned by such entity owned by the
owners of such entity, and used in or derived
from such entity for a period of at least three
(3) years prior to th e date of the transaction
from which the net capital gains arise,
b. "holding period" means an uninterrupted period of
time. The holding period shall include any additional
period when the property was held by another
individual or entity, if such additio nal period is
included in the taxpayer 's holding period for the
asset pursuant to the Internal Revenue Code,
c. "Oklahoma company", "limited liability company ", or
"partnership" means an entity whose primary
headquarters have been located in Oklahoma for a t
least three (3) uninterrupted years prior to the date
of the transaction from which the net capital gains
arise,
ENGR. H. B. NO. 2004 Page 160 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
d. "direct" means the taxpayer directly owns the asset,
and
e. "indirect" means the taxpayer owns an interest in a
pass-through entity (or ch ain of pass-through
entities) that sells the asset that gives rise to the
qualifying gains receiving capital treatment.
(1) With respect to sales of real property or
tangible personal property located within
Oklahoma, the deduction described in this
subsection shall not apply unless the pass -
through entity that makes the sale has held the
property for not less than five (5) uninterrupted
years prior to the date of the transaction that
created the capital gain, and each pass -through
entity included in the ch ain of ownership has
been a member, partner, or shareholder of the
pass-through entity in the tier immediately below
it for an uninterrupted period of not less than
five (5) years.
(2) With respect to sales of stock or ownership
interest in or sales of all or substantially all
of the assets of an Oklahoma company, limited
liability company, or partnership, the deduction
described in this subsection shall not apply
ENGR. H. B. NO. 2004 Page 161 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
unless the pass-through entity that makes the
sale has held the stock or ownership interest or
the assets for not less than three (3)
uninterrupted years prior to the date of the
transaction that created the capital gain, and
each pass-through entity included in the chain of
ownership has been a member, partner or
shareholder of the pass -through entity in the
tier immediately below it for an uninterrupted
period of not less than three (3) years.
E. The Oklahoma adjusted gross income of any individual
taxpayer shall be further adjusted as follows to arrive at Oklahoma
taxable income:
1. a. In the case of individuals, there shall be added or
deducted, as the case may be, the difference necessary
to allow personal exemptions of One Thousand Dollars
($1,000.00) in lieu of the personal exemptions allowed
by the Internal Revenue Code.
b. There shall be allowed an additional exemption of One
Thousand Dollars ($1,000.00) for each taxpayer or
spouse who is blind at the close of the tax year. For
purposes of this subparagraph, an individual is blind
only if the central visual acuity of the individual
does not exceed 20/200 in the better eye with
ENGR. H. B. NO. 2004 Page 162 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
correcting lenses, or if the visual acuity of the
individual is greater than 20/200, but is accompanied
by a limitation in the fields of vision such that the
widest diameter of the visual field subtends an angle
no greater than twenty (20) degrees.
c. There shall be allowed an additional exemption of One
Thousand Dollars ($1,000.00) for each taxpayer or
spouse who is sixty-five (65) years of age or older at
the close of the tax year based upon the filing status
and federal adjusted gross income of the taxpayer.
Taxpayers with the following filing status may claim
this exemption if the federal adjusted gross income
does not exceed:
(1) Twenty-five Thousand Dollars ($25,000.00) if
married and filing jointly;
(2) Twelve Thousand Five Hundred Dollars ($12,500.00)
if married and filing separately;
(3) Fifteen Thousand Dollars ($15,000.00) if single;
and
(4) Nineteen Thousand Dollars ($19,000.00) if a
qualifying head of household.
Provided, for taxable years beginning after De cember
31, 1999, amounts included in the calculation of
federal adjusted gross income pursuant to the
ENGR. H. B. NO. 2004 Page 163 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
conversion of a traditional individual retirement
account to a Roth individual retirement account shall
be excluded from federal adjusted gross income for
purposes of the income thresholds provided in this
subparagraph.
2. a. For taxable years beginning on or before December 31,
2005, in the case of individuals who use the standard
deduction in determining taxable income, there shall
be added or deducted, a s the case may be, the
difference necessary to allow a standard deduction in
lieu of the standard deduction allowed by the Internal
Revenue Code, in an amount equal to the larger of
fifteen percent (15%) of the Oklahoma adjusted gross
income or One Thousan d Dollars ($1,000.00), but not to
exceed Two Thousand Dollars ($2,000.00), except that
in the case of a married individual filing a separate
return such deduction shall be the larger of fifteen
percent (15%) of such Oklahoma adjusted gross income
or Five Hundred Dollars ($500.00), but not to exceed
the maximum amount of One Thousand Dollars
($1,000.00).
b. For taxable years beginning on or after January 1,
2006, and before January 1, 2007, in the case of
individuals who use the standard deduction in
ENGR. H. B. NO. 2004 Page 164 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
determining taxable income, there shall be added or
deducted, as the case may be, the difference necessary
to allow a standard deduction in lieu of the standard
deduction allowed by the Internal Revenue Code, in an
amount equal to:
(1) Three Thousand Dollars ($3, 000.00), if the filing
status is married filing joint, head of household
or qualifying widow; or
(2) Two Thousand Dollars ($2,000.00), if the filing
status is single or married filing separate.
c. For the taxable year beginning on January 1, 2007, and
ending December 31, 2007, in the case of individuals
who use the standard deduction in determining taxable
income, there shall be added or deducted, as the case
may be, the difference necessary to allow a standard
deduction in lieu of the standard deduction al lowed by
the Internal Revenue Code, in an amount equal to:
(1) Five Thousand Five Hundred Dollars ($5,500.00),
if the filing status is married filing joint or
qualifying widow; or
(2) Four Thousand One Hundred Twenty -five Dollars
($4,125.00) for a head of household; or
ENGR. H. B. NO. 2004 Page 165 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(3) Two Thousand Seven Hundred Fifty Dollars
($2,750.00), if the filing status is single or
married filing separate.
d. For the taxable year beginning on January 1, 2008, and
ending December 31, 2008, in the case of individuals
who use the standard deduction in determining taxable
income, there shall be added or deducted, as the case
may be, the difference necessary to allow a standard
deduction in lieu of the standard deduction allowed by
the Internal Revenue Code, in an amount equal to:
(1) Six Thousand Five Hundred Dollars ($6,500.00), if
the filing status is married filing joint or
qualifying widow, or
(2) Four Thousand Eight Hundred Seventy -five Dollars
($4,875.00) for a head of household, or
(3) Three Thousand Two Hundred Fifty Dollars
($3,250.00), if the filing status is single or
married filing separate.
e. For the taxable year beginning on January 1, 2009, and
ending December 31, 2009, in the case of individuals
who use the standard deduction in determining taxable
income, there shall b e added or deducted, as the case
may be, the difference necessary to allow a standard
ENGR. H. B. NO. 2004 Page 166 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
deduction in lieu of the standard deduction allowed by
the Internal Revenue Code, in an amount equal to:
(1) Eight Thousand Five Hundred Dollars ($8,500.00),
if the filing status is married filing joint or
qualifying widow, or
(2) Six Thousand Three Hundred Seventy -five Dollars
($6,375.00) for a head of household, or
(3) Four Thousand Two Hundred Fifty Dollars
($4,250.00), if the filing status is single or
married filing separate.
Oklahoma adjusted gross income shall be increased by
any amounts paid for motor vehicle excise taxes which
were deducted as allowed by the Internal Revenue Code.
f. For taxable years beginning on or after January 1,
2010, and ending on December 31 , 2016, in the case of
individuals who use the standard deduction in
determining taxable income, there shall be added or
deducted, as the case may be, the difference necessary
to allow a standard deduction equal to the standard
deduction allowed by the Int ernal Revenue Code, based
upon the amount and filing status prescribed by such
Code for purposes of filing federal individual income
tax returns.
ENGR. H. B. NO. 2004 Page 167 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
g. For taxable years beginning on or after January 1,
2017, in the case of individuals who use the standard
deduction in determining taxable income, there shall
be added or deducted, as the case may be, the
difference necessary to allow a standard deduction in
lieu of the standard deduction allowed by the Internal
Revenue Code, as follows:
(1) Six Thousand Three H undred Fifty Dollars
($6,350.00) for single or married filing
separately,
(2) Twelve Thousand Seven Hundred Dollars
($12,700.00) for married filing jointly or
qualifying widower with dependent child, and
(3) Nine Thousand Three Hundred Fifty Dollars
($9,350.00) for head of household.
3. a. In the case of resident and part -year resident
individuals having adjusted gross income from sources
both within and without the state, the itemized or
standard deductions and personal exemptions shall be
reduced to an amount which is the same portion of the
total thereof as Oklahoma adjusted gross income is of
adjusted gross income. To the extent itemized
deductions include allowable moving expense, proration
of moving expense shall not be required or permitted
ENGR. H. B. NO. 2004 Page 168 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
but allowable moving expense shall be fully deductible
for those taxpayers moving within or into Oklahoma and
no part of moving expense shall be deductible for
those taxpayers moving without or out of Oklahoma.
All other itemized or standard deductions and persona l
exemptions shall be subject to proration as provided
by law.
b. For taxable years beginning on or after January 1,
2018, the net amount of itemized deductions allowable
on an Oklahoma income tax return, subject to the
provisions of paragraph 24 of this s ubsection, shall
not exceed Seventeen Thousand Dollars ($17,000.00).
For purposes of this subparagraph, charitable
contributions and medical expenses deductible for
federal income tax purposes shall be excluded from the
amount of Seventeen Thousand Dollar s ($17,000.00) as
specified by this subparagraph.
4. A resident individual with a physical disability
constituting a substantial handicap to employment may deduct from
Oklahoma adjusted gross income such expenditures to modify a motor
vehicle, home or wor kplace as are necessary to compensate for his or
her handicap. A veteran certified by the Department of Veterans
Affairs of the federal government as having a service -connected
disability shall be conclusively presumed to be an individual with a
ENGR. H. B. NO. 2004 Page 169 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
physical disability constituting a substantial handicap to
employment. The Tax Commission shall promulgate rules containing a
list of combinations of common disabilities and modifications which
may be presumed to qualify for this deduction. The Tax Commission
shall prescribe necessary requirements for verification.
5. a. Before July 1, 2010, the first One Thousand Five
Hundred Dollars ($1,500.00) received by any person
from the United States as salary or compensation in
any form, other than retirement benefits, as a member
of any component of the Armed Forces of the United
States shall be deducted from taxable income.
b. On or after July 1, 2010, one hundred percent (100%)
of the income received by any person from the United
States as salary or compensation in any form, other
than retirement benefits, as a member of any component
of the Armed Forces of the United States shall be
deducted from taxable income.
c. Whenever the filing of a timely income tax return by a
member of the Armed Forces of the United States is
made impracticable or impossible of accomplishment by
reason of:
(1) absence from the United States, which term
includes only the states and the District of
Columbia;
ENGR. H. B. NO. 2004 Page 170 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(2) absence from the State of Oklahoma while on
active duty; or
(3) confinement in a hosp ital within the United
States for treatment of wounds, injuries or
disease,
the time for filing a return and paying an income tax
shall be and is hereby extended without incurring
liability for interest or penalties, to the fifteenth
day of the third month following the month in which:
(a) Such individual shall return to the United
States if the extension is granted pursuant
to subparagraph a of this paragraph, return
to the State of Oklahoma if the extension is
granted pursuant to subparagraph b of this
paragraph or be discharged from such
hospital if the extension is granted
pursuant to subparagraph c of this
paragraph; or
(b) An executor, administrator, or conservator
of the estate of the taxpayer is appointed,
whichever event occurs the earliest.
Provided, that the Tax Commission may, in its discretion, grant
any member of the Armed Forces of the United States an extension of
time for filing of income tax returns and payment of income tax
ENGR. H. B. NO. 2004 Page 171 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
without incurring liabilities for interest or penalties. Such
extension may be granted only when in the judgment of the Tax
Commission a good cause exists therefor and may be for a period in
excess of six (6) months. A record of every such extension granted,
and the reason therefor, shall be kept.
6. Before July 1, 201 0, the salary or any other form of
compensation, received from the United States by a member of any
component of the Armed Forces of the United States, shall be
deducted from taxable income during the time in which the person is
detained by the enemy in a conflict, is a prisoner of war or is
missing in action and not deceased; provided, after July 1, 2010,
all such salary or compensation shall be subject to the deduction as
provided pursuant to paragraph 5 of this subsection.
7. a. An individual taxpayer, w hether resident or
nonresident, may deduct an amount equal to the federal
income taxes paid by the taxpayer during the taxable
year.
b. Federal taxes as described in subparagraph a of this
paragraph shall be deductible by any individual
taxpayer, whether resident or nonresident, only to the
extent they relate to income subject to taxation
pursuant to the provisions of the Oklahoma Income Tax
Act. The maximum amount allowable in the preceding
paragraph shall be prorated on the ratio of the
ENGR. H. B. NO. 2004 Page 172 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Oklahoma adjusted gross income to federal adjusted
gross income.
c. For the purpose of this paragraph, "federal income
taxes paid" shall mean federal income taxes, surtaxes
imposed on incomes or excess profits taxes, as though
the taxpayer was on the accrual basis. In det ermining
the amount of deduction for federal income taxes for
tax year 2001, the amount of the deduction shall not
be adjusted by the amount of any accelerated ten
percent (10%) tax rate bracket credit or advanced
refund of the credit received during the t ax year
provided pursuant to the federal Economic Growth and
Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
16, and the advanced refund of such credit shall not
be subject to taxation.
d. The provisions of this paragraph shall apply to all
taxable years ending after December 31, 1978, and
beginning before January 1, 2006.
8. Retirement benefits not to exceed Five Thousand Five Hundred
Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
Hundred Dollars ($7,500.00) for the 2005 tax year and T en Thousand
Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
years, which are received by an individual from the civil service of
the United States, the Oklahoma Public Employees Retirement System,
ENGR. H. B. NO. 2004 Page 173 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the Teachers' Retirement System of Oklaho ma, the Oklahoma Law
Enforcement Retirement System, the Oklahoma Firefighters Pension and
Retirement System, the Oklahoma Police Pension and Retirement
System, the employee retirement systems created by counties pursuant
to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
Uniform Retirement System for Justices and Judges, the Oklahoma
Wildlife Conservation Department Retirement Fund, the Oklahoma
Employment Security Commission Retirement Plan, or the employee
retirement systems created by munic ipalities pursuant to Section 48 -
101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
from taxable income.
9. In taxable years beginning after December 3l, 1984, Social
Security benefits received by an individual shall be exempt from
taxable income, to the extent such benefits are included in the
federal adjusted gross income pursuant to the provisions of Section
86 of the Internal Revenue Code, 26 U.S.C., Section 86.
10. For taxable years beginning after December 31, 1994, lump -
sum distributions from employer plans of deferred compensation,
which are not qualified plans within the meaning of Section 401(a)
of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
are deposited in and accounted for within a separate bank account or
brokerage account in a financial institution within this state,
shall be excluded from taxable income in the same manner as a
qualifying rollover contribution to an individual retirement account
ENGR. H. B. NO. 2004 Page 174 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
within the meaning of Section 408 of the Internal Revenue Code, 26
U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
account, including any earnings thereon, shall be included in
taxable income when withdrawn in the same manner as withdrawals from
individual retirement accounts within the meaning of S ection 408 of
the Internal Revenue Code.
11. In taxable years beginning after December 31, 1995,
contributions made to and interest received from a medical savings
account established pursuant to Sections 2621 through 2623 of Title
63 of the Oklahoma Stat utes shall be exempt from taxable income.
12. For taxable years beginning after December 31, 1996, the
Oklahoma adjusted gross income of any individual taxpayer who is a
swine or poultry producer may be further adjusted for the deduction
for depreciation allowed for new construction or expansion costs
which may be computed using the same depreciation method elected for
federal income tax purposes except that the useful life shall be
seven (7) years for purposes of this paragraph. If depreciation is
allowed as a deduction in determining the adjusted gross income of
an individual, any depreciation calculated and claimed pursuant to
this section shall in no event be a duplication of any depreciation
allowed or permitted on the federal income tax return of the
individual.
ENGR. H. B. NO. 2004 Page 175 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
13. a. In taxable years beginning after December 31, 2002,
nonrecurring adoption expenses paid by a resident
individual taxpayer in connection with:
(1) the adoption of a minor, or
(2) a proposed adoption of a minor which did not
result in a decreed adoption,
may be deducted from the Oklahoma adjusted gross
income.
b. The deductions for adoptions and proposed adoptions
authorized by this paragraph shall not exceed Twenty
Thousand Dollars ($20,000.00) per calendar year.
c. The Tax Commission sha ll promulgate rules to implement
the provisions of this paragraph which shall contain a
specific list of nonrecurring adoption expenses which
may be presumed to qualify for the deduction. The Tax
Commission shall prescribe necessary requirements for
verification.
d. "Nonrecurring adoption expenses " means adoption fees,
court costs, medical expenses, attorney fees and
expenses which are directly related to the legal
process of adoption of a child including, but not
limited to, costs relating to the adoption study,
health and psychological examinations, transportation
and reasonable costs of lodging and food for the child
ENGR. H. B. NO. 2004 Page 176 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
or adoptive parents which are incurred to complete the
adoption process and are not reimbursed by other
sources. The term "nonrecurring adoption expenses"
shall not include attorney fees incurred for the
purpose of litigating a contested adoption, from and
after the point of the initiation of the contest,
costs associated with physical remodeling, renovation
and alteration of the adoptive pa rents' home or
property, except for a special needs child as
authorized by the court.
14. a. In taxable years beginning before January 1, 2005,
retirement benefits not to exceed the amounts
specified in this paragraph, which are received by an
individual sixty-five (65) years of age or older and
whose Oklahoma adjusted gross income is Twenty -five
Thousand Dollars ($25,000.00) or less if the filing
status is single, head of household, or married filing
separate, or Fifty Thousand Dollars ($50,000.00) or
less if the filing status is married filing joint or
qualifying widow, shall be exempt from taxable income.
In taxable years beginning after December 31, 2004,
retirement benefits not to exceed the amounts
specified in this paragraph, which are received by an
individual whose Oklahoma adjusted gross income is
ENGR. H. B. NO. 2004 Page 177 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
less than the qualifying amount specified in this
paragraph, shall be exempt from taxable income.
b. For purposes of this paragraph, the qualifying amount
shall be as follows:
(1) in taxable years beginni ng after December 31,
2004, and prior to January 1, 2007, the
qualifying amount shall be Thirty -seven Thousand
Five Hundred Dollars ($37,500.00) or less if the
filing status is single, head of household, or
married filing separate, or Seventy -five Thousand
Dollars ($75,000.00) or less if the filing status
is married filing jointly or qualifying widow,
(2) in the taxable year beginning January 1, 2007,
the qualifying amount shall be Fifty Thousand
Dollars ($50,000.00) or less if the filing status
is single, head of household, or married filing
separate, or One Hundred Thousand Dollars
($100,000.00) or less if the filing status is
married filing jointly or qualifying widow,
(3) in the taxable year beginning January 1, 2008,
the qualifying amount shall be Sixty -two Thousand
Five Hundred Dollars ($62,500.00) or less if the
filing status is single, head of household, or
married filing separate, or One Hundred Twenty -
ENGR. H. B. NO. 2004 Page 178 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
five Thousand Dollars ($125,000.00) or less if
the filing status is married filing jointly or
qualifying widow,
(4) in the taxable year beginning January 1, 2009,
the qualifying amount shall be One Hundred
Thousand Dollars ($100,000.00) or less if the
filing status is single, head of household, or
married filing separate, or Two Hundred Thousand
Dollars ($200,000.00) or less if the filing
status is married filing jointly or qualifying
widow, and
(5) in the taxable year beginning January 1, 2010,
and subsequent taxable years, there shall be no
limitation upon the qualifying amount.
c. For purposes of this paragraph, "retirement benefits"
means the total distributions or withdrawals from the
following:
(1) an employee pension benefit plan which satisfies
the requirements of Section 401 of the Internal
Revenue Code, 26 U.S.C., Section 401,
(2) an eligible deferred compensation plan that
satisfies the requirements of Section 457 of the
Internal Revenue Code, 26 U.S.C., Section 457,
ENGR. H. B. NO. 2004 Page 179 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(3) an individual retirement account, annuity or
trust or simplified employee pension that
satisfies the requirements of Section 4 08 of the
Internal Revenue Code, 26 U.S.C., Section 408,
(4) an employee annuity subject to the provisions of
Section 403(a) or (b) of the Internal Revenue
Code, 26 U.S.C., Section 403(a) or (b),
(5) United States Retirement Bonds which satisfy the
requirements of Section 86 of the Internal
Revenue Code, 26 U.S.C., Section 86, or
(6) lump-sum distributions from a retirement plan
which satisfies the requirements of Section
402(e) of the Internal Revenue Code, 26 U.S.C.,
Section 402(e).
d. The amount of the exemption provided by this paragraph
shall be limited to Five Thousand Five Hundred Dollars
($5,500.00) for the 2004 tax year, Seven Thousand Five
Hundred Dollars ($7,500.00) for the 2005 tax year and
Ten Thousand Dollars ($10,000.00) for the tax year
2006 and for all subsequent tax years. Any individual
who claims the exemption provided for in paragraph 8
of this subsection shall not be permitted to claim a
combined total exemption pursuant to this paragraph
and paragraph 8 of this subsection in an amount
ENGR. H. B. NO. 2004 Page 180 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
exceeding Five Thousand Five Hundred Dollars
($5,500.00) for the 2004 tax year, Seven Thousand Five
Hundred Dollars ($7,500.00) for the 2005 tax year and
Ten Thousand Dollars ($10,000.00) for the 2006 tax
year and all subsequent tax years.
15. In taxable years beginning after December 31, 1999, for an
individual engaged in production agriculture who has filed a
Schedule F form with the taxpayer 's federal income tax return for
such taxable year, there shall be excluded from taxable income any
amount which was included as federal taxable income or federal
adjusted gross income and which consists of the discharge of an
obligation by a creditor of the taxpayer incurred to finance the
production of agricultural products.
16. In taxable years beginning December 31, 2000, an amount
equal to one hundred percent (100%) of the amount of any scholarship
or stipend received from participation in the Oklahoma Police Corps
Program, as established in Section 2 -140.3 of Title 47 of the
Oklahoma Statutes shall be exempt fro m taxable income.
17. a. In taxable years beginning after December 31, 2001,
and before January 1, 2005, there shall be allowed a
deduction in the amount of contributions to accounts
established pursuant to the Oklahoma College Savings
Plan Act. The deduc tion shall equal the amount of
contributions to accounts, but in no event shall the
ENGR. H. B. NO. 2004 Page 181 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
deduction for each contributor exceed Two Thousand
Five Hundred Dollars ($2,500.00) each taxable year for
each account.
b. In taxable years beginning after December 31, 200 4,
each taxpayer shall be allowed a deduction for
contributions to accounts established pursuant to the
Oklahoma College Savings Plan Act. The maximum annual
deduction shall equal the amount of contributions to
all such accounts plus any contributions to such
accounts by the taxpayer for prior taxable years after
December 31, 2004, which were not deducted, but in no
event shall the deduction for each tax year exceed Ten
Thousand Dollars ($10,000.00) for each individual
taxpayer or Twenty Thousand Dollars ( $20,000.00) for
taxpayers filing a joint return. Any amount of a
contribution that is not deducted by the taxpayer in
the year for which the contribution is made may be
carried forward as a deduction from income for the
succeeding five (5) years. For tax able years
beginning after December 31, 2005, deductions may be
taken for contributions and rollovers made during a
taxable year and up to April 15 of the succeeding
year, or the due date of a taxpayer 's state income tax
return, excluding extensions, which ever is later.
ENGR. H. B. NO. 2004 Page 182 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Provided, a deduction for the same contribution may
not be taken for two (2) different taxable years.
c. In taxable years beginning after December 31, 2006,
deductions for contributions made pursuant to
subparagraph b of this paragraph shal l be limited as
follows:
(1) for a taxpayer who qualified for the five -year
carryforward election and who takes a rollover or
nonqualified withdrawal during that period, the
tax deduction otherwise available pursuant to
subparagraph b of this paragraph sha ll be reduced
by the amount which is equal to the rollover or
nonqualified withdrawal, and
(2) for a taxpayer who elects to take a rollover or
nonqualified withdrawal within the same tax year
in which a contribution was made to the
taxpayer's account, the tax deduction otherwise
available pursuant to subparagraph b of this
paragraph shall be reduced by the amount of the
contribution which is equal to the rollover or
nonqualified withdrawal.
d. If a taxpayer elects to take a rollover on a
contribution for which a deduction has been taken
pursuant to subparagraph b of this paragraph within
ENGR. H. B. NO. 2004 Page 183 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
one (1) year of the date of contribution, the amount
of such rollover shall be included in the adjusted
gross income of the taxpayer in the taxable year of
the rollover.
e. If a taxpayer makes a nonqualified withdrawal of
contributions for which a deduction was taken pursuant
to subparagraph b of this paragraph, such nonqualified
withdrawal and any earnings thereon shall be included
in the adjusted gross income of the taxpaye r in the
taxable year of the nonqualified withdrawal.
f. As used in this paragraph:
(1) "non-qualified withdrawal " means a withdrawal
from an Oklahoma College Savings Plan account
other than one of the following:
(a) a qualified withdrawal,
(b) a withdrawal made as a result of the death
or disability of the designated beneficiary
of an account,
(c) a withdrawal that is made on the account of
a scholarship or the allowance or payment
described in Section 135(d)(1)(B) or (C) or
by the Internal Revenue Code, r eceived by
the designated beneficiary to the extent the
amount of the refund does not exceed the
ENGR. H. B. NO. 2004 Page 184 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
amount of the scholarship, allowance, or
payment, or
(d) a rollover or change of designated
beneficiary as permitted by subsection F of
Section 3970.7 of Title 70 of Oklahoma
Statutes, and
(2) "rollover" means the transfer of funds from the
Oklahoma College Savings Plan to any other plan
under Section 529 of the Internal Revenue Code.
18. For taxable years beginning after December 31, 2005,
retirement benefits received by an individual from any component of
the Armed Forces of the United States in an amount not to exceed the
greater of seventy-five percent (75%) of such benefits or Ten
Thousand Dollars ($10,000.00) shall be exempt from taxable income
but in no case less than the amount of the exemption provided by
paragraph 14 of this subsection.
19. For taxable years beginning after December 31, 2006,
retirement benefits received by federal civil service retirees,
including survivor annuities, paid in lieu of S ocial Security
benefits shall be exempt from taxable income to the extent such
benefits are included in the federal adjusted gross income pursuant
to the provisions of Section 86 of the Internal Revenue Code, 26
U.S.C., Section 86, according to the followi ng schedule:
ENGR. H. B. NO. 2004 Page 185 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. in the taxable year beginning January 1, 2007, twenty
percent (20%) of such benefits shall be exempt,
b. in the taxable year beginning January 1, 2008, forty
percent (40%) of such benefits shall be exempt,
c. in the taxable year beginning J anuary 1, 2009, sixty
percent (60%) of such benefits shall be exempt,
d. in the taxable year beginning January 1, 2010, eighty
percent (80%) of such benefits shall be exempt, and
e. in the taxable year beginning January 1, 2011, and
subsequent taxable year s, one hundred percent (100%)
of such benefits shall be exempt.
20. a. For taxable years beginning after December 31, 2007, a
resident individual may deduct up to Ten Thousand
Dollars ($10,000.00) from Oklahoma adjusted gross
income if the individual, or t he dependent of the
individual, while living, donates one or more human
organs of the individual to another human being for
human organ transplantation. As used in this
paragraph, "human organ" means all or part of a liver,
pancreas, kidney, intestine, lu ng, or bone marrow. A
deduction that is claimed under this paragraph may be
claimed in the taxable year in which the human organ
transplantation occurs.
ENGR. H. B. NO. 2004 Page 186 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. An individual may claim this deduction only once, and
the deduction may be claimed only for unreimb ursed
expenses that are incurred by the individual and
related to the organ donation of the individual.
c. The Oklahoma Tax Commission shall promulgate rules to
implement the provisions of this paragraph which shall
contain a specific list of expenses whic h may be
presumed to qualify for the deduction. The Tax
Commission shall prescribe necessary requirements for
verification.
21. For taxable years beginning after December 31, 2009, there
shall be exempt from taxable income any amount received by the
beneficiary of the death benefit for an emergency medical technician
or a registered emergency medical responder provided by Section 1 -
2505.1 of Title 63 of the Oklahoma Statutes.
22. For taxable years beginning after December 31, 2008,
taxable income shall b e increased by any unemployment compensation
exempted under Section 85(c) of the Internal Revenue Code, 26
U.S.C., Section 85(c)(2009).
23. For taxable years beginning after December 31, 2008, there
shall be exempt from taxable income any payment in an am ount less
than Six Hundred Dollars ($600.00) received by a person as an award
for participation in a competitive livestock show event. For
purposes of this paragraph, the payment shall be treated as a
ENGR. H. B. NO. 2004 Page 187 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
scholarship amount paid by the entity sponsoring the e vent and the
sponsoring entity shall cause the payment to be categorized as a
scholarship in its books and records.
24. For taxable years beginning on or after January 1, 2016,
taxable income shall be increased by any amount of state and local
sales or income taxes deducted under 26 U.S.C., Section 164 of the
Internal Revenue Code. If the amount of state and local taxes
deducted on the federal return is limited, taxable income on the
state return shall be increased only by the amount actually deducted
after any such limitations are applied.
F. 1. For taxable years beginning after December 31, 2004, a
deduction from the Oklahoma adjusted gross income of any individual
taxpayer shall be allowed for qualifying gains receiving capital
treatment that are incl uded in the federal adjusted gross income of
such individual taxpayer during the taxable year.
2. As used in this subsection:
a. "qualifying gains receiving capital treatment " means
the amount of net capital gains, as defined in Section
1222(11) of the Internal Revenue Code, included in an
individual taxpayer's federal income tax return that
result from:
(1) the sale of real property or tangible personal
property located within Oklahoma that has been
directly or indirectly owned by the individual
ENGR. H. B. NO. 2004 Page 188 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
taxpayer for a holding period of at least five
(5) years prior to the date of the transaction
from which such net capital gains arise,
(2) the sale of stock or the sale of a direct or
indirect ownership interest in an Oklahoma
company, limited liability company, or
partnership where such stock or ownership
interest has been directly or indirectly owned by
the individual taxpayer for a holding period of
at least two (2) years prior to the date of the
transaction from which the net capital gains
arise, or
(3) the sale of real property, tangible personal
property or intangible personal property located
within Oklahoma as part of the sale of all or
substantially all of the assets of an Oklahoma
company, limited liability company, or
partnership or an Oklahoma proprietors hip
business enterprise where such property has been
directly or indirectly owned by such entity or
business enterprise or owned by the owners of
such entity or business enterprise for a period
of at least two (2) years prior to the date of
ENGR. H. B. NO. 2004 Page 189 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the transaction from which the net capital gains
arise,
b. "holding period" means an uninterrupted period of
time. The holding period shall include any additional
period when the property was held by another
individual or entity, if such additional period is
included in the taxpayer's holding period for the
asset pursuant to the Internal Revenue Code,
c. "Oklahoma company," "limited liability company, " or
"partnership" means an entity whose primary
headquarters have been located in Oklahoma for at
least three (3) uninter rupted years prior to the date
of the transaction from which the net capital gains
arise,
d. "direct" means the individual taxpayer directly owns
the asset,
e. "indirect" means the individual taxpayer owns an
interest in a pass-through entity (or chain of pass-
through entities) that sells the asset that gives rise
to the qualifying gains receiving capital treatment.
(1) With respect to sales of real property or
tangible personal property located within
Oklahoma, the deduction described in this
subsection shall not apply unless the pass -
ENGR. H. B. NO. 2004 Page 190 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
through entity that makes the sale has held the
property for not less than five (5) uninterrupted
years prior to the date of the transaction that
created the capital gain, and each pass -through
entity included in the chain of ownership has
been a member, partner, or shareholder of the
pass-through entity in the tier immediately below
it for an uninterrupted period of not less than
five (5) years.
(2) With respect to sales of stock or ownership
interest in or sales of all or sub stantially all
of the assets of an Oklahoma company, limited
liability company, partnership or Oklahoma
proprietorship business enterprise, the deduction
described in this subsection shall not apply
unless the pass-through entity that makes the
sale has held the stock or ownership interest for
not less than two (2) uninterrupted years prior
to the date of the transaction that created the
capital gain, and each pass -through entity
included in the chain of ownership has been a
member, partner or shareholder o f the pass-
through entity in the tier immediately below it
for an uninterrupted period of not less than two
ENGR. H. B. NO. 2004 Page 191 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(2) years. For purposes of this division,
uninterrupted ownership prior to July 1, 2007,
shall be included in the determination of the
required holding period prescribed by this
division, and
f. "Oklahoma proprietorship business enterprise " means a
business enterprise whose income and expenses have
been reported on Schedule C or F of an individual
taxpayer's federal income tax return, or any similar
successor schedule published by the Internal Revenue
Service and whose primary headquarters have been
located in Oklahoma for at least three (3)
uninterrupted years prior to the date of the
transaction from which the net capital gains arise.
G. 1. For purposes of computing its Oklahoma taxable income
under this section, the dividends -paid deduction otherwise allowed
by federal law in computing net income of a real estate investment
trust that is subject to federal income tax shall be added back in
computing the tax imposed by this state under this title if the real
estate investment trust is a captive real estate investment trust.
2. For purposes of computing its Oklahoma taxable income under
this section, a taxpayer shall add back otherwise deductible re nts
and interest expenses paid to a captive real estate investment trust
ENGR. H. B. NO. 2004 Page 192 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
that is not subject to the provisions of paragraph 1 of this
subsection. As used in this subsection:
a. the term "real estate investment trust " or "REIT"
means the meaning ascribed t o such term in Section 856
of the Internal Revenue Code,
b. the term "captive real estate investment trust " means
a real estate investment trust, the shares or
beneficial interests of which are not regularly traded
on an established securities market and m ore than
fifty percent (50%) of the voting power or value of
the beneficial interests or shares of which are owned
or controlled, directly or indirectly, or
constructively, by a single entity that is:
(1) treated as an association taxable as a
corporation under the Internal Revenue Code, and
(2) not exempt from federal income tax pursuant to
the provisions of Section 501(a) of the Internal
Revenue Code.
The term shall not include a real estate investment
trust that is intended to be regularly traded on an
established securities market, and that satisfies the
requirements of Section 856(a)(5) and (6) of the U.S.
Internal Revenue Code by reason of Section 856(h)(2)
of the Internal Revenue Code,
ENGR. H. B. NO. 2004 Page 193 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
c. the term "association taxable as a corporation " shall
not include the following entities:
(1) any real estate investment trust as defined in
paragraph a of this subsection other than a
"captive real estate investment trust ", or
(2) any qualified real estate investment trust
subsidiary under Section 856(i) of the Inter nal
Revenue Code, other than a qualified REIT
subsidiary of a "captive real estate investment
trust", or
(3) any Listed Australian Property Trust (meaning an
Australian unit trust registered as a "Managed
Investment Scheme" under the Australian
Corporations Act in which the principal class of
units is listed on a recognized stock exchange in
Australia and is regularly traded on an
established securities market), or an entity
organized as a trust, provided that a Listed
Australian Property Trust owns or cont rols,
directly or indirectly, seventy -five percent
(75%) or more of the voting power or value of the
beneficial interests or shares of such trust, or
(4) any Qualified Foreign Entity, meaning a
corporation, trust, association or partnership
ENGR. H. B. NO. 2004 Page 194 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
organized outside the laws of the United States
and which satisfies the following criteria:
(a) at least seventy-five percent (75%) of the
entity's total asset value at the close of
its taxable year is represented by real
estate assets, as defined in Section
856(c)(5)(B) of the Internal Revenue Code,
thereby including shares or certificates of
beneficial interest in any real estate
investment trust, cash and cash equivalents,
and U.S. Government securities,
(b) the entity receives a dividend -paid
deduction comparable to S ection 561 of the
Internal Revenue Code, or is exempt from
entity level tax,
(c) the entity is required to distribute at
least eighty-five percent (85%) of its
taxable income, as computed in the
jurisdiction in which it is organized, to
the holders of its shares or certificates of
beneficial interest on an annual basis,
(d) not more than ten percent (10%) of the
voting power or value in such entity is held
directly or indirectly or constructively by
ENGR. H. B. NO. 2004 Page 195 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a single entity or individual, or the shares
or beneficial interests of such entity are
regularly traded on an established
securities market, and
(e) the entity is organized in a country which
has a tax treaty with the United States.
3. For purposes of this subsection, the constructive ownership
rules of Section 318(a) of the Internal Revenue Code, as modified by
Section 856(d)(5) of the Internal Revenue Code, shall apply in
determining the ownership of stock, assets, or net profits of any
person.
4. A real estate investment trust that does not become
regularly traded on an established securities market within one (1)
year of the date on which it first becomes a real estate investment
trust shall be deemed not to have been regularly traded on an
established securities market, retroactive to the date it first
became a real estate investment trust, and shall file an amended
return reflecting such retroactive designation for any tax year or
part year occurring during its initial year of status as a real
estate investment trust. For purposes of this subsection, a rea l
estate investment trust becomes a real estate investment trust on
the first day it has both met the requirements of Section 856 of the
Internal Revenue Code and has elected to be treated as a real estate
ENGR. H. B. NO. 2004 Page 196 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
investment trust pursuant to Section 856(c)(1) of the Internal
Revenue Code.
H. For purposes of computing Oklahoma taxable income pursuant
to the provisions of this section, any limitations imposed pursuant
to Section 280E of the Internal Revenue Code of 1986, as amended,
shall not apply to entities hold ing a valid business license or
licenses in the categories provided pursuant to Section 427.14 of
Title 63 of the Oklahoma Statutes and any business expense
disallowed because of the restrictions of Section 280E that would
otherwise be deductible by other provisions of the Internal Revenue
Code of 1986, as amended, as ordinary and necessary business
expenses shall be fully deductible for purposes of the Oklahoma
income tax return.
SECTION 32. It being immediately necessary for the preservati on
of the public peace, health or 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.
ENGR. H. B. NO. 2004 Page 197 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Passed the House of Representatives the 9th day of March, 2021.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2021.
Presiding Officer of the Senate