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ENGROSSED HOUSE AMENDME NT
TO
ENGROSSED SENATE BILL NO . 422 By: Simpson of the Senate
and
Burns of the House
An Act relating to the Agriculture Enhancement and
Diversification Program; amending 2 O.S. 2011,
Sections 5-3.2, as last amended by Sec tion 1, Chapter
123, O.S.L. 2015 and 5 -3.4, as amended by Section 3,
Chapter 123, O.S.L. 2015 (2 O.S. Supp. 2020, Sections
5-3.2 and 5-3.4), which relate to the purpose and
categories of the program, and grants and loan
criteria; removing purpose; modifyin g and removing
categories; removing authorization for matching
funds; removing and modifying preferences and
exclusions; requiring nondisclosure pursuant to the
Oklahoma Open Records Act; removing authorization for
executive sessions by the Board under cer tain
circumstances; exempting certain advisory meeting
from the Oklahoma Open Meeting Act; updating
statutory language; and providing an effective date.
AUTHORS: Remove Representative Burns as principal House author and
substitute with Representative Kerbs
Add Representative Burns as coauthor
AMENDMENT NO. 1. Delete the title, enacting clause and entire bill
and replace with:
"[ revenue and taxation - agricultural sales tax
exemptions - effective date -
emergency ]
BE IT ENACTED BY THE PEOPL E OF THE STATE OF OKLAHOMA:
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SECTION 1. AMENDATORY 68 O.S. 2011, Section 1358.1, is
amended to read as follows:
Section 1358.1 A. In order to qualify for any exemption
authorized by Section 1358 of this title, at the time of sale , the
person to whom the sale is made shall be required to furnish the
vendor proof of eligibility for the exemption as required by this
section.
B. All vendors shall honor the proof of eligibility for sales
tax exemption as authorized by this section and sales to a person
providing such proof shall be exempt from the tax levied by this
article, Section 1350 et seq. of this title.
C. The agricultural exemption permit, the size and design of
which shall be prescribed by the Oklahoma Tax Commission, shall
constitute proof of eligibility for sales tax exemptions authorized
by Section 1358 of this title. The permit shall be obtained by
listing personal property used in farming or ranching by the person
with the county assessor each year as provided by law. I f the
assessor determines that the personal property is correctly listed
and assessed for ad valorem taxation and the county treasurer
certifies whether the person has delinquent accounts appearing on
the personal property tax lien docket in the county tre asurer's
office, the assessor shall certify the assessment upon a form
prescribed by the Oklahoma Tax Commission. One copy shall be
retained by the assessor, one copy shall be forwarded to the
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Oklahoma Tax Commission and one copy shall be given to the per son
listing the personal property. Upon verification that the applicant
qualifies for the exemptions authorized by Section 1358 of this
title and that the applicant has no delinquent accounts appearing on
the personal property tax lien docket in the offic e of the county
treasurer, a permit shall be issued as prescribed by this section.
The permit shall be renewable every three (3) years in the manner
provided by this section.
D. A person who does not otherwise qualify for a permit
pursuant to subsection C of this section, except as provided in
subsection E of this section, shall file with the Oklahoma Tax
Commission an application for an agricultural exemption permit
constituting proof of eligibility for the sales tax exemptions
authorized by Section 1358 of this title, and except as prohibited
by subsection I of this section, setting forth such information as
the Tax Commission may require. The application shall be certified
by the applicant that the applicant is engaged in custom farming
operations or in the business of farming or ranching. If the
applicant is a corporation, the application shall be certified by a
legally constituted officer thereof.
E. Except as provided in this subsection, for a person who is a
resident of another state and who is en gaged in custom farming
operations in this state, the person shall provide the vendor proof
of residency, the name, address and telephone number of the person
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engaging the custom farmer and certification on the face of the
invoice, under the penalty of per jury, that the property purchased
shall be used in agricultural production as proof of eligibility for
the sales tax exemption authorized by Section 1358 of this title.
Any person who is a resident of another state and who is engaged in
custom farming operations in this state and who owns property in
this state, shall obtain proof of eligibility as provided in
subsection C or D of this section.
F. If an agricultural exemption permit holder purchases
tangible personal property from a vendor on a regular ba sis, the
permit holder may furnish the vendor proof of eligibility as
provided for in subsections C and D of this section and the vendor
may subsequently make sales of tangible personal property to the
permit holder without requiring proof of eligibility f or each
subsequent sale. Provided, the permit holder shall notify the
vendor of all purchases which are not exempt from sales tax under
the provisions of Section 1358 of this title and remit the
applicable amount of tax thereon. If the permit holder fail s to
notify the vendor of purchases not exempt from sales tax, then
sufficient grounds shall exist for the Oklahoma Tax Commission to
cancel the agricultural exemption permit of the permit holder who so
failed to notify the vendor.
G. If an out-of-state agricultural exemption permit holder
purchases tangible personal property from a vendor within this state
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who is not in the business of shipping the tangible personal
property purchased, then the out -of-state agricultural exemption
permit holder is responsi ble for providing an export bill of lading
or other documentation to the vendor from whom the tangible personal
property was purchased showing that the point of delivery of such
goods for use and consumption is outside the State of Oklahoma.
H. A purchaser who uses an agricultural exemption permit or
provides proof of eligibility pursuant to subsection E of this
section to purchase, exempt from sales tax, items not authorized for
exemption under Section 1358 of this title shall be subject to a
penalty in the amount of Five Hundred Dollars ($500.00).
I. The Oklahoma Tax Commission shall accept any one of the
following as proof of eligibility for the exemptions authorized by
this section or pursuant to Section 1358 of this title:
1. Schedule F, or a copy of Schedule F, or any equivalent form
prescribed by the Internal Revenue Service, with respect to a
federal income tax return;
2. A three-year business plan form provided by the Oklahoma
Tax Commission; or
3. A farm exemption tax form provided by the Oklah oma
Department of Agriculture, Food, and Forestry.
SECTION 2. This act shall become effective July 1, 2021.
SECTION 3. It being immediately necessary for the preservation
of the public peace, health or safety, an emergenc y is hereby
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declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval. "
Passed the House of Representatives the 20th day of April, 2021.
Presiding Officer of the House of
Representatives
Passed the Senate the ____ day of __________, 2021.
Presiding Officer of the Senate
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ENGROSSED SENATE
BILL NO. 422 By: Simpson of the Senate
and
Burns of the House
An Act relating to the Agriculture Enhancement and
Diversification Program; amending 2 O.S. 2011,
Sections 5-3.2, as last amended by Section 1, Chapter
123, O.S.L. 2015 and 5 -3.4, as amended by Section 3,
Chapter 123, O.S.L. 2015 (2 O.S. Supp. 2020, Sections
5-3.2 and 5-3.4), which relate to the purpose and
categories of the program, and grants and loan
criteria; removing purpose; modifying and removing
categories; removing authorization for matching
funds; removing and modifying preferences and
exclusions; requiring nondisclosure pursuant to the
Oklahoma Open Records Act; removing authorization for
executive sessions by the Board under certain
circumstances; exempting certain advisory meeting
from the Oklahoma Open Meeting Act; updating
statutory language; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 4. AMENDATORY 2 O.S. 2011, Section 5 -3.2, as
last amended by Section 1, Chapter 123, O.S.L. 2015 (2 O.S. Supp.
2020, Section 5-3.2), is amended to read as follows:
Section 5-3.2. A. The State Boar d of Agriculture is hereby
authorized to establish and administer the Oklahoma Agriculture
Enhancement and Diversification Program.
B. The purpose of the Oklahoma Agriculture Enhancement and
Diversification Program is to promote and encourage the interest s of
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agriculture through the allocation of funds, by grant or loan, to
individuals, cooperatives and other agricultural entities to:
1. Develop new or expanded uses of agricultural products;
2. Develop new or expanded benefits of agricultural events;
3. Increase agricultural productivity;
4. 3. Provide added value to agricultural products or events;
5. 4. Benefit the agricultural producer; and
6. 5. Benefit the agricultural interests of Oklahoma this
state.
C. The Program shall consist of the followi ng categories:
1. Cooperative marketing Value-added agriculture grants and
loans for entities or individuals intending to work together to
develop or establish production, processing or marketing of
agricultural products. The purpose of this category is to provide
funding for promoting productivity, providing added value to
agricultural products, stimulating and fostering agricultural
diversification and encouraging processing innovations;
2. Marketing and utilization grants and loans to assist in the
development or implementation of sound domestic or foreign marketing
plans for Oklahoma agricultural products, by -products, or new and
better uses for existing agricultural products through the financing
of marketing feasibility studies, business plans, and test
marketing;
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3. Farm diversification grants or loans for projects dealing
with the diversification of family farms or ranches to
nontraditional crops, livestock, agritourism, or on-farm, value-
added processing of agricultural commodities;
4. Basic and applied 3. Product development and research
grants and loans for agricultural business creation or expansion, or
research which will likely lead to a marketable agricultural product
through the focusing of research efforts on uses and processing of
Oklahoma agricultural products and by -products, including but not
limited to:
a. focused research which enhances the value of an
agricultural product or by -product,
b. feasibility studies, and
c. product development and test marketing costs, and
d. projects that are driven by an entrepreneur or the
industry; and
5. 4. Agricultural event or events that benefit and further the
public interest in agriculture; and
5. Veteran or young farmer grants or loans for veterans and
young farmers that are engaged or will be engaged in expansion or
creation of events that benefit and further the public interest in
agriculture an agricultural business .
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D. The State Board of Agriculture shall promulgate rules
governing the Oklahoma Agriculture Enhancement and Diversification
Program.
SECTION 5. AMENDATORY 2 O.S. 2011, Section 5 -3.4, as
amended by Section 3, Chapter 123, O.S.L. 2015 (2 O.S. Supp. 2020,
Section 5-3.4), is amended to read as follows:
Section 5-3.4. A. The Oklahoma Department of Agricult ure,
Food, and Forestry shall require eligible applicants to submit
information, forms and reports as are necessary to properly and
efficiently administer the Oklahoma Agriculture Enhancement and
Diversification Program.
B. Persons may apply to the Depart ment for grant or loan funds
in accordance with rules promulgated by the State Board of
Agriculture. Applications for grant or loan funds shall be approved
or denied by the Department in accordance with criteria promulgated
by the State Board of Agriculture pursuant to the Oklahoma
Agriculture Enhancement and Diversification Program.
C. The State Board of Agriculture may also allocate monies from
the fund to eligible applicants on a matching basis.
D. Grant or loan funds may be made available to eligible
applicants pursuant to evaluation by the Department based on the
following criteria:
1. Preference may be given to the applicants whose:
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a. industrial and nonfood production processes utilize
agricultural products,
b. food, feed and fiber products and us es are innovative
and add to the value of agricultural products,
c. applications demonstrate a high probability of job
creation and return-on-investment,
d. proposals feature research that is innovative as well
as commercially plausible,
e. proposals demonstrate a high probability of rapid
commercialization,
f. projects demonstrate a shared commitment for funding
from other private or public sources or from the
applicant,
g. proposals center efforts on nonurban locales,
h. principals are individuals, a grou p of individuals, an
individual on behalf of a group, or corporations which
meet the criteria set forth in Section 951 of Title 18
of the Oklahoma Statutes, to market a product or
formulate or implement a marketing plan for
agricultural products which have not been marketed
through existing marketing cooperatives produced or
processed in this state ,
i. proposals contain the potential to create additional
income for the farm unit, and
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j. proposals provide for new and innovative plans for
marketing the produc t, and
k. proposals for agricultural events benefit the entire
state or a large geographic region of the state ; and
2. Consideration shall not be given to applications for:
a. research or marketing plans which do not clearly meet
the stated objectives of the Oklahoma Agriculture
Enhancement and Diversification Act,
b. proposals which are aimed solely at business expansion
or creation without regard to agricultural products
utilization, or
c. research or marketing plans that cannot reasonably be
expected to result in a viable commercial application,
or that are or have been duplicated by other research
efforts, or
d. proposals for agricultural events that do not result
in expansion of the event or encourage additional
public interest in the event .
E. D. 1. Any information submitted to or compiled by the
Department with respect to the marketing plans, financial
statements, trade secrets, research concepts, methods or products,
or any other proprietary information of persons, firms,
associations, partnerships , agencies, corporations, institutions of
higher education, nonprofit research institutions or other entities
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pursuant to the Oklahoma Agriculture Enhancement and Diversification
Program shall not be disclosed pursuant to the Oklahoma Open Records
Act or in public hearings and shall be kept confidential, except to
the extent that the person or entity which provided such information
or which is the subject of such information consents to disclosure.
2. Executive sessions may be held to discuss such material s if
deemed necessary by the Board In the event an independent advisory
group of reviewers are used to analyze and make recommendations for
projects for approval by the Board, any meetings of such advisory
groups shall be exempt from the Oklahoma Open Meet ing Act.
SECTION 6. This act shall become effective November 1, 2021.
Passed the Senate the 4th day of March, 2021.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2021.
Presiding Officer of the House
of Representatives