An Act
ENROLLED SENATE
BILL NO. 1564 By: Dugger of the Senate
and
Burns and Cantrell of the
House
An Act relating to revenue; amending 68 O.S. 2021,
Section 3003, which relates to income of political
subdivisions; allowing political subdivisions to use
state and tribal funds in certain processes; updating
statutory language; and providing an effective date .
SUBJECT: Income of political subdivisions
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 3003, is
amended to read as follows:
Section 3003. A. It shall be unlawful for the governing board
of any county, city, town, school district, or other governmental
subdivision of this state, in preparation of its budget for any
fiscal year, to estimate as probable income from sources other than
ad valorem tax of such governmental subdivision of the state and
other than any excise or other tax assessed by legislative enactment
and distributed in lieu of ad valorem taxes, any reven ue from
nonrecurrent sources, regardless of such collections in the
immediately preceding fiscal year, to be derived from or the result
of sales, forfeitures, penalties, gifts, federal aid allotments of
every kind, windfalls, seizures, sheriff ’s sales, court actions
whether civil or criminal, injunctions or protests won or released
by dismissal, or from any other such source not normally recurrent
year after year and so made recurrent by legislative enactment.
ENR. S. B. NO. 1564 Page 2
Provided, that upon a finding by the governing board of any county,
city, town, school district, or other governmental subdivision of
this state, that a source of income, although nonrecurrent, will
actually be available for the next ensuing fiscal year, the board
may include such income in its estima te of probable income.
Provided, that shared revenues of the federal government, if
ascertainable, shall be allowed to be included in the estimates. It
shall also be unlawful for any excise board to approve or require
the same, or for any supervisory sta te board, commission, or
officer, or for any agent or employee of either thereof to
countenance, approve, or require the same or to diminish in any
degree the distribution or allotment of state revenues or
appropriations by reason of such collections in a prior year or
prospect of such collections in the ensuing year; nor shall any
revenue received by a school district from gross production taxes
during the immediately preceding fiscal year, which was payable to
such district in another year or years, be co nsidered as minimum
program income of such district for state aid purposes. The
provisions of Section 21 of Title 21 of the Oklahoma Statutes shall
be applicable where the foregoing prohibitions are disregarded.
Revenue received by a school district duri ng the immediately
preceding year, which was earned by, or which was payable to, such
school district in another year or years, shall not be considered as
minimum program income of such district for state aid purposes.
B. All funds received by counties, cities, towns, or other
subdivisions of government in the State of Oklahoma this state,
hereinafter referred to as the recipient government, from the
federal government pursuant to the distribution of funds authorized
by the state shall be deposited in the treasury of the recipient
government in a fund which shall be recorded and accounted for
separately and apart from all other funds. Principal and interest
received from investments of the federal monies, proceeds from the
sale of assets purchased from th e federal monies, and other
miscellaneous income derived from the direct operation of the
federal monies may be deposited in the fund from which the federal
monies were deposited if required by the federal government or by
the governing board of the recipi ent government.
The unappropriated cash balance on hand may be appropriated as
needed upon the request of the governing board of the recipient
government and approval by the county excise board ,; provided, if
ENR. S. B. NO. 1564 Page 3
the governing board of the recipient governmen t determines the need
to do so, it may estimate the amount remaining to be collected from
its entitlement from federal funds during the remainder of its
fiscal year and include such estimate in its request for
appropriations. The estimate shall not exceed the amount of the
entitlement which is to be received during the remainder of the
recipient government ’s fiscal year or, if the amount of the
entitlement has not been certified, ninety percent (90%) of such
funds received during a corresponding period of the previous fiscal
year; provided, that if the entitlement is less than that estimated
or if the entitlement to be collected during the recipient
government’s fiscal year, in addition to the unappropriated cash
balance, is reduced below the amount appropr iated for the fiscal
year, the governing board of the recipient government shall request
the county excise board for an adequate reduction of appropriations
in the fund.
All disbursements made from the fund in which federal monies are
deposited shall be m ade in the same manner as those made from the
general fund of the recipient government; provided , that, no
warrants shall be drawn on the fund unless sufficient monies are
available to pay the warrants.
All forms and procedures necessary for the effective operation
of this act shall be prescribed by the office of the State Auditor
and Inspector.
C. All monies distributed by the federal, state, or tribal
government governments and received by any state agency, board, or
commission to administer and distri bute to counties, cities, towns,
or other subdivisions of the government in the State of Oklahoma
this state, hereinafter referred to as the recipient government,
that do not follow procedures in subsection B of this section may
utilize the letter of commi tment appropriation process as specified
in this subsection. The recipient government shall receive approval
for the program as required by the agency, board, or commission
administering the program and by the federal government, if
required. Once approved, the state agency, board , or commission may
authorize a letter of commitment of federal , state, or tribal monies
available to the recipient government. The Excise Board excise
board may approve an appropriation in the amount of the letter of
commitment. Each recipient government may establish a separate
ENR. S. B. NO. 1564 Page 4
appropriation within a special revenue fund designated for federal ,
state, or tribal monies. The recipient government may encumber
funds in an amount not to exceed the sum of the total letter of
commitment, which is a binding commitment of funding which the
recipient government will receive for the project or projects
eligible for such federal funding. The encumbrance of funds
authorized by this section shall be made in accordance with
procedures prescribed by the State Auditor and Inspector and shall
be administered in accordance with rules and regulations concerning
such distribution adopted by the federal government and the state
agency, board, or commission. Any expenditure incurred by the
recipient government using the letter of commitment appropriation
process and disallowed by the federal , state, or tribal government
or state agency, board, or commission administering the funds shall
be paid by the recipient government.
SECTION 2. This act shall become effective November 1, 2024.
ENR. S. B. NO. 1564 Page 5
Passed the Senate the 4th day of March, 2024.
Presiding Officer of the Senate
Passed the House of Representatives the 18th day of April, 2024.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _ ________
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _________________________________