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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 1084 By: Haste
AS INTRODUCED
An Act relating to public finance; creating the
Oklahoma Public Infrastructure District s Act;
providing for short title; allowing for the
implementation of public infrastructure districts in
Oklahoma following the passage of a proposed
constitutional amendment by the voters of this state;
authorizing the Legislature to allow municipalities
to approve the creation of these districts, which may
incur indebtedness and issue public infrastructure
bonds for the payment of costs associated with public
improvements; defining terms; prohibiting a public
infrastructure district to b e formed without certain
conditions; stipulating manner by which a public
infrastructure district operates within a
municipality; allowing for a municipality to
establish criteria in dete rmining the approval or
rejection of a public infrastructure district ;
providing for construction and function of a public
infrastructure district’s board upon organization;
establishing criteria for the g overning document
provided to the municipality prior to formation of
the public infrastructure district; requiring a vote
for amendment to governing documents; authorizing
public infrastructure districts to issue bonds for
the financing of costs associated with proposed
public improvements within the district; crea ting a
public infrastructure district bond; establishing
criteria by which a bond may be issued by the
district; preventing certain conditions to occur o n
the issuance of the bond; allowing for legal re course
under certain conditions; prohibiting the sale of
bonds under certain conditi ons; allowing for
administrative fees to be assessed for certain
associated costs; establishing mill rate pursuant to
the Oklahoma Constitution; requiring notice to be
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filed with certain entities following formation
within certain timef rame; allowing for a fee to be
assessed for nonpayment not to exceed certain limits;
authorizing the retention of municipal authority over
certain conditions within the public infrastructure
districts; requiring inclusion of all existing and
connected infrastructure between a municipality and a
public infrastructure district; requiring transfer of
certain infrastructure free of liens or financial
encumbrances; providing for civil action under
certain circumstances; establishing procedures for
legal action to occur; requiring certain notice to be
provided to purchaser of property within a public
infrastructure district prior to sale by seller;
establishing criteria for notice; providing for
codification; providing an effective date; and
providing a conditional effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-201 of Title 11, unless there
is created a duplication in numbering, reads as follows:
This act shall be known a nd may be cited as the “Oklahoma Public
Infrastructure Distr icts Act”.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-202 of Title 11, unless there
is created a duplication in numbering, read s as follows:
The purpose of the Oklahoma Public Infrastructure Districts Act
is to implement the provisions of Section 9E of Article X of the
Oklahoma Constitution, as referred to the people for their approval
or rejection by the Secretary of State pursua nt to the provisions of
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Enrolled Senate Joint Resolution No. ____ of the 1st Session of the
59th Oklahoma Legislature. Upon passage of the state que stion, the
Oklahoma Legislature authorize municipalities to approve the
creation of public infrastructure districts, which may incur
indebtedness and issue public infrastructure district bonds created
in Section 7 of this act to pay for all or part of the cost of
public improvements within such districts. The cost of all
indebtedness so incurred shall be levie d and assessed by the board
of trustees of a public infrastructure district on the property
benefited by such improvements. The board shall collect the special
assessments so levied and use the same to reimburse the public
infrastructure district for the amount paid or to be paid by it on
the bonds issued for such improvements.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Sect ion 39-203 of Title 11, unless there
is created a duplication in numbe ring, reads as follows:
As used in this act:
1. “Board” means the board of tru stees of a public
infrastructure district as created by the governing docu ment;
2. “District applicant” means the person proposing the cr eation
of the public infrastructure district to the municipality where the
proposed public infrastructure district shall reside ;
3. “Division” means a portion within a public infrastructure
district:
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a. that is relatively equal in number of eligible voters
or potential eligible vo ters to all other divisions
within the public infrastructure distri ct, taking into
account existing or potential developments, which,
when completed, would increase or decrease the
population within the public infrastructure district ,
and
b. which a member of the board represents;
4. “Governing document” means the document governing the public
infrastructure district presented by the district applicant to and
approved by the municipality before the creation o f the public
infrastructure district;
5. “Public infrastructure bond” means a bond:
a. that is directly payable fr om and secured by ad
valorem property taxes that are levied:
(1) by the public infrastructure district th at issues
the bond, and
(2) on taxable property within the district,
b. that is the obligation of the public infrastructure
district, and
c. for which the ad valorem property ta x levy repayment
of the bond does not exce ed the mill rate limit
pursuant to Section 9 of this act for any fiscal year.
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A public infrastructure bond shall not mean a general obligation
bond;
6. “Public infrastructure district” means an area of a
municipality with defined limits and boundaries which is created by
vote that operates separate and distinct from the municipality and
subject to the provisions of this act including, but not limited to
special assessments against the real property therein for the
financing or repayment of the costs of the public infrastructure
district’s improvements; and
7. “Surface property owner” means the owner or owners of record
of the surface of the property included in a proposed public
infrastructure district and may not be registered voters of the
property.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-204 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A. Notwithstanding the other provisions of this act, a public
infrastructure district shall not be created unless:
1. A petition, if there are any registered voters within the
applicable area, is filed with the municipality that contains the
signatures of one hundred percent (100%) of regis tered voters within
the applicable area approving the creation of the public
infrastructure district; or
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2. A petition is filed with the municipality that contains the
signatures of one hundred percent (10 0%) of surface property owners
within the applicable area consenting to the creation of the public
infrastructure district.
B. The municipality may impose limitations on the powers of the
public infrastructure district through the governing document .
C. 1. A public infrastructure district is separate and
distinct from the municipality in which it resides.
2. a. Except as provided in sub paragraph b of this
paragraph, any financial burden of a public di strict:
(1) is borne solely by the public infrastructure
district, and
(2) is not borne by the municipality, county, or any
other public subdivisions .
b. Notwithstanding subparagraph a of this paragraph, the
governing document may require:
(1) the district applicant to bear the initial costs
of the public infrastructure district, and
(2) the public infrastructure district to reimburse
the district applicant for the initial costs the
municipality bears.
3. Any liability, judgement, or claim against a pub lic
infrastructure district:
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a. is the responsibility of the public infrastructure
district, and
b. does not constitute a liability, judgement, or claim
against the state municipality, county or any or other
political subdivision.
4. a. (1) The public infrastructure district solely bears
the responsibility of any collection, enforcement, or
foreclosure proceeding with regard to any tax, fee, or
assessment the public infrastructure imposes.
(2) The municipality does not bear the responsibility
described in division (1) of subparagraph a of
paragraph 4 of this subsection.
b. A public infrastructure district, and not the
municipality, shall undertake the enf orcement
responsibility.
D. The municipality may establish criteria in determining
whether to approve or disapprove the creation of a public
infrastructure district including, but not limited to:
1. Historical performance of the district applicant;
2. Compliance with the municipality’s master plan;
3. Credit worthiness of the district applicant ;
4. Plan of finance of the public infrastructure district; and
5. Proposed development within the public infrastructure
district.
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E. 1. The creation of a public infrastructure district is
subject to the sole discr etion of the governing board of the
municipality responsible for approving or rejecting the creation of
the public infrastructure district .
2. The proposed municipality bears no liability for rejecting
the proposed creation of a public infrastructure district.
SECTION 5. NEW LAW A n ew section of law to be codified
in the Oklahoma Statutes as Section 39-205 of Title 11, unless there
is created a duplication in numbering, read s as follows:
A. The legislative body of the municipality that approved the
creation of a public infrastructur e district shall appoint the
initial members of the board, in accordance with the governing
document.
B. 1. Unless otherwise limited in the gover ning document, the
initial term of each member shall be four (4) years.
2. At least half of all members of the initial board shall
serve six-year terms so as to provide for elections every two (2)
years.
3. A board may elect that a majority of the board serve a n
initial term of six (6) years.
4. After the initial term, each member shall serve for four (4)
years.
C. 1. A board member may not be required to be a resident
within the boundarie s of the public infrastructure if:
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a. all of the surface property owners’ consent to the
waiver of the residency requiremen t,
b. there are no residents within the boundaries of the
public infrastructure distr ict, or
c. no qualified candidate timely files to be considered
for appointment to the board .
2. An individual who is n ot a resident within the boundaries of
the public infrastructure district may not serve as a board member
unless the individual is:
a. an owner of land or an agent or officer of the ow ner
of land within the boundaries of the public
infrastructure distri ct, and
b. a registered voter at the in dividual’s primary
residence.
3. The district applicant, or spouse or immediate family member
of the district applica nt, shall not be appointed to the board,
unless:
a. one hundred percent (100%) of the surface property
owners’ consent to the inclusion of the district
applicant, or spouse or immediate family member of the
district applicant to the board, or
b. there are no registered voters at the ti me of
consideration for appoint ments to the board.
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D. 1. The governing document shall provide for a transition
from legislative body appointments by the municipality pursuant to
subsection A of this section to a method of election of registered
voters based upon milestones or events that the governing document
identifies.
2. Regardless of whether a board mem ber is elected under
paragraph 1 of subsection D of this section, the position of each
remaining board member shall continue to be appointed under
subsection A of this section until the member’s respective division
or board position surpasses the density m ilestone pursuant to the
governing document.
E. 1. Pursuant to paragraph 3 of this subsecti on, the board
may, in the board’s discretion, but no more than every four (4)
years, reestablish the boundaries of each division so that each
division that has reached a mil estone specified in the governing
document, as provided in paragraph 1 of subsection D of this
section, has, as nearly as possible, the same number of eligible
voters.
2. In reestablishing division boundaries under paragraph 1 of
this subsection, the board shall conside r existing or potential
developments within the divisions which, whe n completed, would
increase or decrease the number o f eligible voters within the
division.
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3. The governing document may prohibit the board from
reestablishing, without the consent of the municipality, the
division boundaries as described in paragraph 1 of this subsection.
F. The public infrastructure district may not compensate a
board member for the member ’s service on the board.
G. The governing document shall:
1. Include a boundar y description and a map of the public
infrastructure district, which may include, but not limited to, an
estimate of the district’s population;
2. Provide a description of proposed services;
3. Provide a financi al plan showing how the proposed services
are to be financed, including the proposed operating revenue derived
from tax assessments, all proposed indebtedness for the district,
and all other necessary budgetary conditions;
4. A preliminary engineering or architectural survey showing
how the proposed services are to be provided;
5. A general description of the facilities to be cons tructed
and the standards of such cons truction, including a statement of how
the facility and services standards of the proposed public
infrastructure district are compatible with facility and service
standard of any municipality or county within which all or any
portion of the proposed district is to be located;
6. A general description of the estimated cost of acquiring
land engineering services, legal services , administrative services,
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and any other major expen ses related to organization and initial
operation of the district;
7. State the number of board members;
8. Establish the electoral procedure of appointment for board
members as described in this section ;
9. Detail any and all divisions within the public
infrastructure district;
10. Detail any and all applicable milestones establis hed for
the public infrastructure district;
11. Provide notice of mill rate limit as prescribed by Section
___ of Article ___ of the Oklahoma Constitution for the public
infrastructure district;
12. Establish any applicable limitation on the principal a mount
of indebtedness for the public infrastructure dis trict;
13. Provide notice of procedural process for the authorization
of the public infrastructure district to issue public infrastructure
district bonds as provided in this act;
14. Any funds created for any charges, fines, or fees that the
public infrastructure district may assess;
15. File annual reports with the municipality regarding the
public infrastructure district’s action; and
16. Include other information that th e public infrastructure
district or the municipality determines to be necessary or
advisable.
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H. 1. Except as oth erwise provided in paragraph 2 of this
subsection, the board and the governing body of the municipality may
amend a governing document by eac h adopting a resolution t hat
approves the amended governing document.
2. Any amendment to a property tax mill limit ation requires;
provided, the amendment to a p roperty tax mill limitation does not
exceed the tax mill limit as provided in Section 9E of Article X of
the Oklahoma Constitution pursuant to the provisions of Enrolled
Senate Joint Resolution No. ____ of the 1st Session of the 59th
Oklahoma Legislature:
a. before the adoption of the resolution of the
municipality pursuant to paragraph 1 of this
subsection, the public inf rastructure district shall
provide notice for a public hearing with at least one
member of the governing body of the municipality
attending the public hearing, or
b. the consent of:
(1) One hundred percent (100%) of surface property
owners within the boundaries of the public
infrastructure district, and
(2) One hundred percent (100%) of the registered
voters, if any, within the boundaries of the
public infrastructure district.
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SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Secti on 39-206 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A. A public infrastructure district may:
1. Issue a public infrastructure bond to pay:
a. all or part of the costs of acquiring, ac quiring an
interest in, improving, constructing, installing,
completing, or extending any of the public
improvements, facilities, or property for the benefit
of the public infrastructure district,
b. the acquisition, construction, installation, or
completion of public improvements related to th e
provision of residential or commercial developments ,
and
c. all or part of the capital costs related to the
financing, acquisition, construction, installation, or
completion of public transportation;
2. Enter into an interlocal agreement pursuant to Section 1001
et seq. of Title 74 of the Oklahoma Statutes; provided, that the
interlocal agreement shall not expand the power s of the public
infrastructure district;
3. Acquire completed or par tially completed improvements for
fair market value as reasonably determined by:
a. the board,
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b. the municipality, if required in the govern ing
document, or
c. a surveyor or engineer that a public infrastructure
district employs or engages to perform th e necessary
engineering services for and to supervise the
construction or inst allation of the improvements; and
4. Contract with the municipality for the municipality to
provide administrative services on behalf of the public
infrastructure district, when a greed to by both parties, in order to
achieve cost savings and economic efficiencies, at the discretion of
the municipality.
B. A public infrastructure district may issue additional public
infrastructure bonds; provided, the public infrastructure district
follows the procedures as described in subsection B of Section 7 of
this act for each additional bond iss ued.
SECTION 7. NEW LAW A new sec tion of law to be codified
in the Oklahoma Statutes as Section 39-207 of Title 11, unless there
is created a duplicatio n in numbering, reads as f ollows:
A. A public infrastructure district bond:
1. Shall mature within not more than thirty (30) years of the
date of issuance;
2. May not be secured by any improvement or facility paid for
by the public infrastructure district;
3. May not be subject to acceleration; and
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4. May be refunded or refinanced in accordance with the
applicable laws of this state .
B. 1. A public infrastructure district may issue the public
infrastructure district bond:
a. with the consent of one hundred percent (100%) of
surface property owners within the boundaries of the
public infrastructure district and one hundred percent
(100%) of the registered voters, if any, within the
boundaries of the proposed public infrastructure
district, or
b. upon approval of a majority of th e registered voters
within the boundaries of the public infrast ructure
district voting in an election.
2. A public infrastructure district bond:
a. is not subject to the limitations on a general
obligation bond described in Section 411 et seq. of
Title 62 of the Oklahoma Statutes, and
b. is subject to a limitation, if any, on the principal
amount of indebtedness pursuant to the governing
document.
C. The public infrastructure district bonds may be issued in
denominations of not less than Five Hundred Tho usand Dollars
($500,000.00) and in integral multiples above Five Hundred Thousand
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Dollars ($500,000.00) of not less than One Thousand Dollars
($1,000.00) each.
D. There is no limitation on the duration of revenues that a
public infrastructure district may receive to cover any shortfall in
the payment of principal of a nd interest on a bond that the public
infrastructure issues.
E. A public infrastructure district shall not be considered a
municipality or county for purposes of Section 35 of Article X of
the Oklahoma Constitution.
F. The board, by resolution, may delegate to one or more
officers of the public infrastructure district the authority to:
1. Approve the final interest rate, price, principal amount,
maturity, redemption features, and other terms of the bond;
2. Approve and execute any document relating to the issuance of
a bond; and
3. Approve any contract related to the acq uisition and
construction of the improvements, facilities, or p roperty to be
financed with a bond.
G. Any person may contest the legality of the issuance of a
public infrastructure dist rict bond or any provisions for the
security and payment of the bo nd after publication of the notice of
bond and resolution authorizing the bond. Notwithstanding the
foregoing, no legal or equitable act ion brought with respect to any
legislative acts or p roceedings in connection with the authorization
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or issuance of bonds by a publ ic infrastructure district shall be
commenced after the statut e of limitations in accordanc e with the
laws of this state.
H. The total amount of the public infrastructure district
indebtedness for all such divisions shall not exceed ten percent
(10%) of:
1. The assessed valuation of all taxable tangible property in
the public infrastructure district, as shown by the last completed
property assessment for state or local purposes, within the city or
county; or
2. The opinion of value as reported by a licensed appraiser.
I. The bonds may be sold by competitive bid pursuant to Rule
144A, 17 C.F.R. Sec. 230.144A; provided, the public infrastructure
district shall not award the purchase of the bonds to a district
applicant, member of the public infrastructure district’s board, or
individual who voted in favor for issuance of the public
infrastructure district bond.
SECTION 8. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-208 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A public infrastructure district may ch arge a fee or other
charge for an administrative service that the public infrastructure
district provides to pay costs associated to:
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1. Acquiring, improving, or extending improvements, facilities,
or property; or
2. Legal fees.
SECTION 9. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-209 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A. The property tax levy of a public infrastructure district,
for all purposes may not exceed ten (10) mills on the dollar of
taxable value of taxable property in the distr ict pursuant to
Section 9E of Article X of the Oklahoma Constitution pursuant to the
provisions of Enrolled Senate Joint Resolution No. ____ of the 1st
Session of the 59th Oklahoma Legislature.
B. 1. Within thirty (30) days after the day on which the
municipality adopts the resolution creating the public
infrastructure district, the board shall record a notice with the
county clerk in which property within the public infrastructure
district resides.
2. The notice shall include:
a. a description of the boundaries of the public
infrastructure district ,
b. a copy of the governing documents on file at the
office of the municipality and applicable count y
district court system, and
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c. the maximum rate the public infrastructure district
may levy.
SECTION 10. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-210 of Title 11, unless there
is created a duplication in numbering, reads as f ollows:
A. In the event of nonpayment of any tax, fee, or charge that a
public infrastructure district imposes, the public infrastructure
district may impose a property tax penalty at an a nnual rate of no
more than seven percent (7%), in addition to any other lawful
penalty for nonpayment of property tax; provided, any penalty
assessed for nonpayment of a fee or charge shall not exceed th e
nonpayment amount.
B. All funds derived from a penalty assessed for nonpayment
shall be deposited to a fund designated for use as provided in the
public infrastructure district’s governing document.
SECTION 11. NEW LAW A new secti on of law to be codified
in the Oklahoma Statutes as Section 39-211 of Title 29, unless there
is created a duplication in numbering, reads as follows:
A. The municipality, as applicable, retains the municipal’s
authority over all zoni ng, planning, design specifica tions and
approvals, and permitting within the public infrastructure district.
B. The inclusion of property within the boundaries of a public
infrastructure district does not preclude the inclu sion of the
property within any other local district.
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C. 1. All infrastructure that is conn ected to another
municipality’s system:
a. belongs to that municipality, regardless of inclusion
within the boundaries of the public infrastructure
district, unless the pub lic infrastructure district
and the municipality creates otherwise agree, and
b. shall comply with the de sign, inspection requirements,
and other standards of the municipality.
2. The public infrastructure district shall convey or transfer
the infrastructure described in paragraph 1 of this subsection free
of liens or financial encumbrances to the municipality or county in
which it resides, or a poti on of its boundaries resides, at no cost
to the municipality or county.
SECTION 12. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-212 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A. A person who contests a tax or fee or any proceeding to
create a public infrastructure district, levy a tax, or impose a fee
may bring a civil action against the public infrastructure distri ct
or the municipality to:
1. Set aside the proceeding; or
2. Enjoin the levy, imposition, or collection of a tax or fee.
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B. The person bringing an action shall bring the action in the
district court with jurisdiction in the county in which the public
infrastructure district is located.
C. An action under subsection A of th is section is the
exclusive remedy of a person who:
1. Claims an error or irregularity in a tax or fee o r in any
proceeding to create a public infrastructure district, levy a tax,
or impose a fee; and
2. Challenges a bondholder’s right to repayment.
D. A bond issued or to b e issued with respect to a public
infrastructure district and any tax levied or fee imposed becomes
incontestable against any person who has not brought an action and
served a summons in accordance with this section.
E. 1. This section does not insulate a public infrastructure
district from a claim of mis use of funds.
2. a. Except as provided in subparagraph b of this
paragraph, an action in the nature of mandamu s is the
sole form of relief available to a party challenging
the issue of funds.
b. The limitation in subparagraph a of this paragraph
does not prohibit the filing of criminal charges
against or the prosecution of a party for the misuse
of funds.
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SECTION 13. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 39-213 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A. Each owner of real property that se lls real property inside
the boundaries of the public infrastructure district , concurrently
with or prior to the exec ution of a contract to se ll the property,
shall provide to the purchaser of the property a paper copy or
electronic copy with the following:
1. The public infrastructure district’s governing document;
2. The maximum debt service the public infrastructure district
is permitted to impose;
3. The estimate of the property taxes levied by the
municipality that are applicable to the property for collection
during the year in which the sale occurs; and
4. A copy of the most c urrent county assessor ’s property tax
certificate applicable to the property as an estimate of the sum of
additional property taxes levied.
B. Along with the information required in s ubsection A of this
section, the seller shall include a notice with the following
statement:
“This estimate only provides an estimat ion of the amount of the
new property taxes that may be due and owing after the property has
been reassessed and, in some instances, reclassified as residential
property. This estimate is not a statement of the actual and fu ture
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taxes that may be due. First year property taxes may be based on a
previous year’s tax classification, whi ch may not include the full
value of the property and , consequently, taxes may be higher in
subsequent years. A seller has c omplied with this disc losure
statement as long as t he disclosure is based upon a good-faith
effort to provide accurate es timates and information.”
SECTION 14. This act shall become effective Novembe r 1, 2023.
SECTION 15. The provisions of this act shall be contingent upon
the approval of Section 9E of Article X of the Oklahoma
Constitution, as referred to the people for their approval or
rejection by the Secretary of State pursuant to the provisions of
Enrolled Senate Joint Resolution No. ____ of the 1st Session of the
59th Oklahoma Legislature and shall not become operative as law
otherwise
59-1-180 MR 1/19/2023 2:03:42 PM