Brenda Wright, Shareholder Crawford & Associates, P.C.
The 2019 Legislative session brought many changes to municipal finance state statutes. The summary below is prepared from the OML Sine Die Document. The document with links to each bill is available on the Oklahoma Municipal League website.
Public Construction/Bond Retainage: HB 1114 amends 61 O.S. Section 226 impacting a construction contract subject to a bond. It requires the retainage not to exceed 5 percent to be reduced to 2.5 percent with respect to the balance of the work to be performed, once the contractor’s work is determined by the holder to be at least 50 percent complete. A subcontract “shall” include retainage – current law is “may”. The terms of the subcontract retainage are the same as above. This bill takes effect November 1, 2019
Law Enforcement/Training & Salary Repayments: HB 1207 requires that if an officer leaves the original employing agency which paid for CLEET training later than one year, but less than two years, after initial employment, the second agency or the person receiving the training must reimburse the original employing agency 50 percent of the cost of CLEET training and salary paid to the person while completing the basic police course by the original employing agency. It deletes language relating to the use of a promissory note to recoup academy training expenses. This bill takes effect November 1, 2019.
Service Fees: HB 1425 allows municipalities to apply a service fee to online or in-person transactions to offset bank processing fees. It exempts municipal courts not of records. This bill takes effect November 1, 2019.
Municipal Court Clerks/Digitized Receipts: HB 1428 requires a municipal treasurer to credit deposits for the municipal court to the fund designated by the municipal governing body. It requires the court clerk to make a receipt for the fees, fines, and forfeitures collected which will be retained by the municipality together with a detailed statement of all costs, the style of the case in which they were paid, and the name of the defendant. It allows the receipt and detailed statement retained by the municipality to be saved and produced in an electronic format. This bill takes effect November 1, 2019.
Public Bidding/Local Bid Preference: HB 1885 amends 60 O.S. Section 176 and 61 O.S. Section 103 by providing that construction contracts “may provide” for a local bid preference of not more than 5 percent if the awarding governing body determines there is an economic benefit to the local area or economy. No preference shall be granted unless the local bidding entity is the second lowest qualified bid. The local bidder or contractor must agree to perform the contract for the same price and terms as the bid proposed by the nonlocal bidder or contractor. “Local bid” means the bidding person is authorized to do business in Oklahoma and maintains a bona fide establishment for transacting business within this state. This provision does not apply to any construction contract for which federal funds are available for expenditure when its provisions may be in conflict with federal law or regulation. The local preference amendment to 61 O.S. Section 103 is the same except it applies to public construction contracts exceeding $50,000. The bill contains details. This bill takes effect November 1, 2019.
Street & Road Construction Projects: SB 400 modifies the population requirement where the board of county commissioners may construct, improve, repair or maintain any of the streets of a municipality if the municipality has passed a sales tax or dedicated fee with the proceeds earmarked for that purpose. It requires the municipality to have a population of 5,000 or greater and for the county to have a population of less than 150,000. This bill takes effect November 1, 2019.
Sales & Use Tax: SB 513 requires a remote seller that had aggregate sales of tangible personal property within Oklahoma or delivered to locations within Oklahoma subject to tax under provisions therein worth at least $100,000 during the preceding or current calendar year to collect and remit the tax imposed under provisions therein. It requires the duty to collect and remit tax to apply to the first calendar month succeeding the month when the threshold provided therein is met. It prohibits sales by a remote seller made through a marketplace forum or a referrer's platform where the tax is collected and remitted by the marketplace facilitator or referrer from being included in determining whether the remote seller has met the threshold amount provided therein. This bill takes effect November 1, 2019.
Sales Tax Exemptions:
Sales Tax Exemption/American Legion: HB 1003 provides a sales tax exemption to American Legion organizations chartered by the United States Congress or entities organized under the laws of Oklahoma or another state pursuant to the authority of the national American Legion organization. This bill takes effect July 1, 2019.
Sales Tax Exemption/Medical Items: : HB 1262 exempts from sales tax, when administered, distributed or prescribed by a medical practitioner who is authorized by law to administer, distribute or prescribe such items, prosthetic devices, durable medical equipment used in the home and mobility-enhancing equipment. This bill takes effect July 1, 2019.
Sales Tax Exemption/Manufacturing & Digital Fabrication Tools: HB 2530 exempts from sales tax sales of tangible personal property or services to or by an organization which is exempt from taxation pursuant to the provisions of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3), verified with a letter from the MIT Fab Foundation as an official member of the Fab Lab Network in compliance with the Fab Charter, and able to provide documentation that their primary and principal purpose is to provide community access to advanced 21st century manufacturing and digital fabrication tools for science, technology, engineering, art and math (STEAM) learning skills, developing inventions, creating and sustaining businesses and producing personalized products. This bill takes effect November 1, 2019.
Sales Tax Exemption/Railroad Rolling Stock: SB 18 modifies the sales tax exemption for railroad rolling stock. It extends the sunset day on the sales tax exemption to July 1, 2024, from July 1, 2019. The bill clarifies language that the exemption applies to leases, as well as sales. It adds railroad car maintenance and retrofitting to the exemption. This bill takes effect July 1, 2019.