June Legislative Report

Budget:

This last month saw intense negotiations between the House Democrats and Republicans taking center stage as Democrats pushed for significant increases in the gross production tax in return for support for increases in the cigarette and other revenue measures; and republicans struggled internally to accept them. Strangely enough, it was the breakdown of those discussions that led to a change in semantics and ultimately the budget.

The budget turned on whether bills that are either fee increases or elimination of tax exemptions were revenue raising measures. On party lines, the budget and bills critical to it passed in the last few days of session by simple majorities. The bulk of the $878 million budget deficit was filled by new fees on cigarettes ($215 million), a motor vehicle sales tax ($110.9 million), and a gross production tax increase to 4 percent ($110 million). The reminder came from other bills, agency revolving funds and transportation fund transfers that are discussed in an ECapitol article below.

The resulting $6.975 billion appropriated broke down into two primary categories. First, a group of 16 agencies representing the core functions of government were either held harmless or got some additional money. The remaining agencies generally took a 4.87% cut. We were fortunate to be among the 16 agencies, getting $29,563,631, a $2.1 million or 7.69% increase. A breakdown is attached.

We are very grateful for the opportunity these funds give us and will work to earn their trust.

Legislation:

The final watch list is beow. As far as the critical bills on our watch list bills, SB 733, by Rep. Osborne and Sen. Griffin, allowing DRS to contract out some or all older- blind services, has been approved by the Governor. Despite good negotiations with Tulsa County, HB 2230, has also been signed by her. One other we added late in the process HB 1210, by Rep. Griffith and Sen. Griffin, originally recreating the Olmsted Commission, was changed late to a broader task force on coordinating services to individuals with disabilities. There were a number of agencies that have raised concerns, and it has not yet been signed by the Governor. The bills that have not been sent or signed by the Governor are dormant. But be warned they will arise again next session to haunt the living.

Bill requests are due in December, so if you have ideas for legislation, please get them to me in September. Thank you for another exciting session. Watch list Bill Portfolio 16 Bills On Report

HB1188 Paraphrase: HB1188, by Rep. Edward Cannaday, D-Porum and Sen. Frank Simpson, R-Ardmore, requires unused sick leave of up to 60 days for a teacher employed after July 1, 2017, at the Oklahoma School for the Blind or the Oklahoma School for the Deaf accumulated at another school district to be transferable. (Amended by Senate, Emergency Measure) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: Cannaday, Edward (H); Simpson, Frank (S) Status: Governor Action - Signed Status Date: 04/13/2017

HB1210 Paraphrase: HB1210, by Rep. Claudia Griffith, D-Norman and Sen. A J Griffin, R-Guthrie, creates the Commission on Independence and Ability until July 1, 2020, in place of the Strategic Planning Commission on the Olmstead Decision. The bill also modifies the statement of the public of the state regarding individuals with disabilities to say that it will be the policy of the state that priority be given to providing services in the most integrative setting and that institutional services will be the last resort. It requires that people with disabilities who utilize community-based services will make up the majority of the commission. It requires commission members to work cooperatively to ensure that the federal Olmstead decision is implemented. It establishes the commission's membership at four appointed members and 13 ex-officio members and provides a method for their selection. It requires the commission to develop a five-year implementation plan for the state to provide a comprehensive system of service deliver for Oklahomans with disabilities. It establishes requirements for the plan. The bill establishes reporting requirements. (Amended by Senate, Committee Substitute) Effective Date: / / Emergency: No Principal Authors: Griffith, Claudia (H); Griffin, A J (S) Status: Sent to Governor Status Date: 05/20/2017

HB2230 Paraphrase: HB2230, by Rep. Glen Mulready, R-Tulsa and Sen. Anthony Sykes, R-Moore, exempts commissaries for the benefit of persons lawfully confined in the county jail under the custody of the county sheriff from the requirement to give priority to vending facilities operated by licensed blind operators and established by the State Department of Rehabilitation Services. (Amended by House, Amended by Senate) Effective Date: 08/25/2017 Emergency: No Principal Authors: Mulready, Glen (H); Sykes, Anthony (S) Status: Governor Action - Signed Status Date: 05/15/2017 HB2316 Paraphrase: HB2316, by Rep. Charles McCall, R-Atoka and Sen. Mike Schulz, R-Altus, permits the governor to appoint or replace any officers appointed by the governor. It removes the requirement that the removal be for in incompetency, neglect of duty, or malfeasance in office and to then fill the same as provided in cases of vacancy. It also grants the House Speaker and the Senate President Pro Tempore the power to appoint, remove or replace any of their respective appointments on any agency, board or commission, in addition to any appointments created by expiring terms or vacancies provided by law. It exempts appointments to any agency, board or commission if the appointment authority is provided for in the Constitution. It provides that appointments to the following boards and commissions may be removed and replaced without cause by their appointment authority: Oklahoma Employment Security Commission; Mental Health and Substance Abuse Services; Long- Range Capital Planning Commission; Oklahoma Health Care Authority Board; and the State Board of Career Technology Education. (Amended by House, Amended by Senate) Effective Date: 11/01/2017 Emergency: No Principal Authors: McCall, Charles (H); Schulz, Mike (S) Status: CCR Read (Senate) Status Date: 05/25/2017

HB2360 Paraphrase: HB2360, by Rep. Leslie Osborn, R-Mustang and Sen. Kimberly David, R-Porter, appropriates an additional $18 million from the Constitutional Reserve Fund to the State Department of Education for the financial support of public schools. (Amended by House, Amended by Senate, Appropriation Bill, Emergency Measure, Committee Substitute) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: Osborn, Leslie (H); David, Kimberly (S) Status: Governor Action - Signed Status Date: 05/31/2017 Committee(2): S Conf HB2360 (C)

HB2400 Paraphrase: HB2400, by Rep. Leslie Osborn, R-Mustang and Sen. Kimberly David, R-Porter, makes general appropriations for the expenses of various agencies of the executive, legislative and judicial departments, including a $1,000 teacher pay raise. (Appropriation Bill, Emergency Measure) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: Osborn, Leslie (H); David, Kimberly (S) Status: In Committee - Senate Status Date: 05/25/2017 Committee(1): Joint Comm on Appropriation & Budget (Senate) (S)

HB2403 Paraphrase: HB2403, by Rep. Leslie Osborn, R-Mustang and Sen. Kimberly David, R-Porter, sets a $17,000 limit on the net amount of itemized deductions, excluding contributions to charitable organizations, allowed on an Oklahoma individual tax return for tax years 2017, 2018 and 2019. (Amended by House, Appropriation Bill, Committee Substitute) Effective Date: 11/01/2017 Emergency: No Principal Authors: Osborn, Leslie (H); David, Kimberly (S) Status: S General Order Status Date: 05/23/2017

HB2404 Paraphrase: HB2404, by Rep. Leslie Osborn, R-Mustang and Sen. Kimberly David, R-Porter, eliminates the sales tax exemption for purchases by the State of Oklahoma, any political subdivision, any agency of a political subdivision, institutions of The Oklahoma State System of Higher Education, the Oklahoma Municipal Power Authority, the Office of Management and Enterprise services when carrying out a public construction contract on behalf of the Oklahoma Department of Veterans Affairs. (Appropriation Bill) Effective Date: 11/01/2017 Emergency: No Principal Authors: Osborn, Leslie (H); David, Kimberly (S) Status: In Committee - Senate Status Date: 05/25/2017 Committee(1): Joint Comm on Appropriation & Budget (Senate) (S)

HB2429 Paraphrase: HB2429, by Rep. Leslie Osborn, R-Mustang and Sen. Kimberly David, R-Porter, increases the gross production tax from 1 percent to 4 percent for horizontally-drilled wells that began production prior to July 1, 2015, and are subject to a 48 month incentive rate. (Amended by House, Appropriation Bill, Emergency Measure, Committee Substitute) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: Osborn, Leslie (H); David, Kimberly (S) Status: Governor Action - Signed Status Date: 05/31/2017

HB2433 Paraphrase: HB2433, by Rep. Leslie Osborn, R-Mustang and Sen. Kimberly David, R-Porter, adds a 1.25 percent sales tax to the purchase of motor vehicles. The bill prohibits local jurisdictions from assessing a sales tax on motor vehicle purchases. (Amended by House, Appropriation Bill, Emergency Measure, Committee Substitute) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: Osborn, Leslie (H); David, Kimberly (S) Status: Governor Action - Signed Status Date: 05/31/2017

HJR1029 Paraphrase: HJR1029, by Rep. John Jordan, R-Yukon, approves all proposed permanent state agency rules filed on or before April 1 except: Oklahoma Health Care Authority, OAC 317:30-3-4.1, subsection (E); Oklahoma Statewide Virtual Charter School Board, OAC 777:10- 5-3; and Oklahoma State Board of Pharmacy, OAC 535:15-10-12 and 535:15-10-13. (Amended by House, Committee Substitute) Effective Date: / / Emergency: No Principal Authors: Jordan, John (H) Status: S General Order Status Date: 05/20/2017 HJR1030 Paraphrase: HJR1030, by Rep. John Jordan, R-Yukon and Sen. Nathan Dahm, R-Broken Arrow, disapproves the permanent rule adopted by the Oklahoma Health Care Authority Board: OAC 317:30-5-355.1, subsection (E), and states it does not reflect the intent of the Oklahoma Legislature. Effective Date: / / Emergency: No Principal Authors: Jordan, John (H); Dahm, Nathan (S) Status: S General Order Status Date: 05/20/2017

SB0080 Paraphrase: SB0080, by Sen. Frank Simpson, R-Ardmore and Rep. Pat Ownbey, R-Ardmore, permits appropriations, federal monies, and monies collected by or for the Department of Rehabilitation Services and monies from the current and prior fiscal years to be transferred to and between the agency disbursing funds for the current or prior fiscal years, including the Medical and Assistance Funds, and other funds authorized to be used by the department as necessary. The bill requires that monies transferred be included in the department's budget work program and records should be maintained. It adds that transfer requests need to be in writing to the Office of Management and Enterprise Services. The measure exempts receipt and expenditure for unanticipated federal funds awarded to the department after the commencement of the fiscal year's expenditure limitations. The bill permits the Department of Rehabilitation Services director to request through the Office of Management and Enterprise Services director an early transfer of tax collection to the General Revenue Fund by the Oklahoma Tax Commission; with the purpose to early allocate the department's disbursing funds. (Amended by Senate, Emergency Measure) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: Simpson, Frank (S); Ownbey, Pat (H) Status: Governor Action - Signed Status Date: 04/26/2017

SB0733 Paraphrase: SB0733, by Sen. A J Griffin, R-Guthrie and Rep. Leslie Osborn, R-Mustang, allows the Department of Rehabilitation Services to direct all federal and state funds appropriated for services to Older Individuals that are Blind to qualified and accredited community- based, non-profit organizations. It requires he funds to be used to administer services for older individuals with vision impairments. It allows funds to be received from the Federal Rehabilitation Services Administration. (Amended by House, Amended by Senate, Emergency Measure, Committee Substitute) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: Griffin, A J (S); Osborn, Leslie (H) Status: Governor Action - Signed Status Date: 05/22/2017

SB0845 Paraphrase: SB0845, by Sen. Kimberly David, R-Porter and Rep. Leslie Osborn, R-Mustang, creates the Smoking Cessation Act of 2017. The bill requests that Indian tribes and nations who have entered into compacts relating to cigarettes and tobacco products to use any revenues derived from them for the purposes of preventing Oklahomans from smoking cigarettes and encouraging Oklahomans who already do so to cease cigarette smoking. It requires signs prohibit smoking be conspicuous and in prominent locations. The bill requires the State Department of Health and the Tobacco Settlement Endowment Trust to work together to inform the public about the dangers of smoking in motor vehicles where children are present. The bill prohibits the use of any tobacco product on all state properties and in all state vehicles, whether owned, leased or contracted, except for Oklahoma Veterans Centers. It requires the Oklahoma State Department of Health and the Department of Mental Health and Substance Abuse Services to work together to develop new and innovative strategies to prevent tobacco use by minors. The bill establishes a $1.50 per pack of cigarettes smoking cessation fee to be paid by wholesalers to the Oklahoma Tax Commission. It allocates the first $1 million in revenue from the fee to the ABLE Commission Revolving Fund and subsequent revenue to the Health Care Enhancement Fund. It requires funds in the Health Care Enhancement Fund to be appropriated by the Legislature for the purpose of enhancing Oklahomans' health. It establishes requirements for wholesaler compliance. (Amended by Senate, Committee Substitute) Effective Date: / / Emergency: No Principal Authors: David, Kimberly (S); Osborn, Leslie (H) Status: Governor Action - Signed Status Date: 05/31/2017

SB0871 Paraphrase: SB0871, by Sen. Kimberly David, R-Porter and Rep. Leslie Osborn, R-Mustang, consolidates the Office of Disability Concerns and the Oklahoma Commission on Children and Youth. It names the agency the Oklahoma Commission on Children, Youth and Disabilities. The bill establishes the process for consolidating the two agencies. (Emergency Measure) Effective Date: 07/01/2017 Emergency: Yes Principal Authors: David, Kimberly (S); Osborn, Leslie (H) Status: S General Order Status Date: 05/10/2017 More than 20 bills contribute funds to 2017 legislative session appropriations

Author:Shawn Ashley Date: 05/30/2017

(eCap) Lawmakers used more than 20 bills to raise the money necessary to overcome an $878 million deficit and fund the fiscal year 2018 budget.

The bulk of the Legislature's FY2018 appropriations were in SB0860 , by Senate Appropriations Committee Chair Kim David, R-Porter, and House Appropriations and Budget Chair Leslie Osborn, R-Mustang. The bill makes general appropriations for the expenses of various agencies of the executive, legislative and judicial departments. It includes the bulk of the $6.975 billion appropriated this year.

The bill passed the Senate 33 to 13 Wednesday. It passed the House 57 to 42 Friday, the last day of the legislative session.

The bill includes the transfer of $61.3 million from revolving funds to the Special Cash Fund. That money then is appropriated to specific agencies. Some agency appropriations also include money from their own revolving funds.

The bill also transferred $100.0 million from the Department of Transportation's Rebuilding Oklahoma Access and Driver Safety (ROADS) Fund that provides money for the agency's eight-year plan for other appropriations. Additional $50.0 million was transferred from the County Improvements for Roads and Bridges Program (CIRB), a joint state-county road improvement program, for other appropriations. Thirty-five million dollars also was transferred out of the Unclaimed Property Fund and appropriated to other uses.

Gov. Mary Fallin has yet to act on SB0860 but has said she will sign it and the measures that fund it. The governor has 15 days from Friday, or until June 10, to sign bills passed during the final week of the legislative session.

The single-largest new source of revenue for the FY2018 budget comes from the tobacco cessation tax in SB0845 . The bill creates the Smoking Cessation Act of 2017. The bill requests that Indian tribes and nations who have entered into compacts relating to cigarettes and tobacco products to use any revenues derived from them for the purposes of preventing Oklahomans from smoking cigarettes and encouraging Oklahomans who already do so to cease cigarette smoking. It requires signs prohibit smoking be conspicuous and in prominent locations. The bill requires the State Department of Health and the Tobacco Settlement Endowment Trust to work together to inform the public about the dangers of smoking in motor vehicles where children are present. The bill prohibits the use of any tobacco product on all state properties and in all state vehicles, whether owned, leased or contracted, except for Oklahoma Veterans Centers. It requires the Oklahoma State Department of Health and the Department of Mental Health and Substance Abuse Services to work together to develop new and innovative strategies to prevent tobacco use by minors. The bill establishes a $1.50 per pack of cigarettes smoking cessation fee to be paid by wholesalers to the Oklahoma Tax Commission. It allocates the first $1 million in revenue from the fee to the ABLE Commission Revolving Fund and subsequent revenue to the Health Care Enhancement Fund. It requires funds in the Health Care Enhancement Fund to be appropriated by the Legislature for the purpose of enhancing Oklahomans' health. It establishes requirements for wholesaler compliance

The Senate passed the bill 28 to 18 and its emergency clause 38 to 8 Wednesday. It was approved in the House 51 to 43 Friday. The bill's emergency clause, however, did not receive House approval, failing 52 to 45. A two-thirds vote is necessary to approve an emergency clause.

Lawmakers were told in the Senate and House Joint Committees on Appropriations and Budget that the bill would raise $257.8 million over 12 months. With its emergency clause, the bill will not take effect until Aug. 25, resulting in a loss of anticipated revenue.

Lawmakers, however, appropriated only $214 million from the expected collections in addition to the $1 million apportioned to the ABLE Commission revolving fund.

Fiscal impact statements for cigarette tax proposals considered earlier in the session projected $215 million in revenue based on 10 months of collections. The Oklahoma Constitution provides tax increases cannot take effect until 90 days after the Legislature adjourns, the same time SB0845 will take effect because its emergency clause failed to pass.

Fallin has yet to act on the bill.

An additional $110.9 million will be generated by HB2433 . The bill adds a 1.25 percent sales tax to the purchase of motor vehicles. The bill prohibits local jurisdictions from assessing a sales tax on motor vehicle purchases.

The bill passed 52 to 47 and its emergency clause passed 68 to 31 Wednesday in the House. It was approved 25 to 18 Friday in the Senate. Twenty-five is the minimum number of votes necessary for a motion to pass in the Senate. As the bill struggled to get the required number of votes for passage, David worked the chamber for votes, saying loud enough for everyone to hear that it would generate more than $100 million for the FY2018 budget.

Fallin has yet to act on the measure.

Another measure expected to generate nearly $100 million for the FY2018 budget was HB2429, which increases the gross production tax from 1 percent to 4 percent for horizontally-drilled wells that began production prior to July 1, 2015, and are subject to a 48 month incentive rate.

According to the Oklahoma Tax Commission's fiscal analysis of the bill, it will generate $95.3 million in FY2018. The bill passed the House on May 23 54 to 44 and its emergency clause passed 68 to 30. It passed the Senate 37 to 7 Thursday. Fallin has not yet acted on the bill.

HB2377 is expected to generate $43.2 million for FY2018's budget. The bill HB2377 establishes a July 1, 2017, sunset date for the following gross production tax credit: secondary recovery projects; tertiary recovery projects; reestablished production; production enhancement projects; production of oil, gas or oil and gas from wells spudded or reentered between July 1, 1995, and July 1, 2015; and three- dimensional seismic shoots on or after July 1, 2000. The bill establishes a Sept. 30, 2017, deadline to submit claims for refunds. It provides that claims for refunds for production periods ending on or before December 31, 2016, shall be paid pursuant to the provisions of this subsection. It requires claims for refunds be paid in equal payments over 36 months and requires the first payment be made after July 1, 2018, but prior to August 1, 2018. The bill requires the Tax Commission to provide not later than June 30, 2018, a schedule of rebates to be paid out over the 36-month period to the operator or designated interest owner.

It passed the House 68 to 7 on May 19 and its emergency clause passed 68 to 6. The bill and its emergency clause passed the Senate 44 to 1 Wednesday. Fallin has not yet acted on the bill.

Also included in the list of bills contributing revenue for FY2018 appropriations is SB0867, the so-called long lateral bill. According to Sen. Bryce Marlatt, D- Woodward, who presented the bill in the Senate Joint Committee on Appropriations and Budget and on the Senate floor, the bill will generate approximately $9.5 million for FY2018 appropriations.

According to a House fiscal impact statement, the Tax Commission forecast an anticipated positive impact of nearly $19.0 million in total gross production tax collections, $9.5 million of which will go to the General Revenue Fund and was appropriated for FY2018 and $4.8 million each to local school districts and to counties.

The bill was one of several measures considered by the Senate May 20 in its first Saturday session in more than 50 years. The Senate passed it 26 to 19 and its emergency clause passed 36 to 0. It was approved 51 to 46 Wednesday in the House. Fifty-one votes are needed for approval of a measure in that chamber. Its emergency clause failed 60 to 32.

SB0867 , by Sen. Mike Schulz, R-Altus, and Rep. Charles McCall, R-Atoka, creates the Oklahoma Energy Jobs Act of 2017. It grants the Corporation Commission jurisdiction upon the filing of a proper application and to establish spacing rules for horizontally drilled oil or gas wells whereby horizontally drilled oil or gas wells may have well spacing units established of up to 1,280 acres plus tolerances and variances. It requires the Corporation Commission to promulgate rules. It provides specifics for the creation and continuation of any horizontal spacing unit that exceeds 640 acres plus tolerances and variances. It defines terms. The bill authorizes the Corporation Commission to allow multiunit horizontal wells in any targeted reservoir or in more than one targeted reservoir, or in a targeted reservoir and an adjacent common source of supply, upon an appropriate finding by the Commission of the necessity to comingle production from more than one targeted reservoir or an adjacent common source of supply in such multiunit horizontal well, in order to prevent waste and protect the correlative rights of the owners of oil and gas rights.

A series of other measures are expected to generate from several hundred thousand dollars to almost $18.0 million each:

• HB1836 removes limitations on authorized gaming at horse racing facilities, except for the prohibition of Christmas Day. The bill has a $2.7 million fiscal impact and was signed April 26 by Fallin.

• HB1845 , by McCall and Schulz, establishes Real ID compliant driver licenses and eliminates the prohibition on the Real ID Act implementation and compliance. It has a $17.9 million fiscal impact and it was the first bill approved by Fallin when she signed it March 2.

• HB2343 the definition of the term "noncompliant" taxpayer to include only those operating under a sales tax permit who fails within any consecutive 24-month period to file reports or remit tax due for any two months as required for sales taxes under the provisions of any tax law, not only the Oklahoma Tax Code. The bill also exempts nonpayment of income taxes from the definition. The governor signed the bill, which has a $15.5 million fiscal impact, May 2.

• HB2344 reduces the total amount of rebates available in any one fiscal year under the Oklahoma Film Enhancement Rebate Program from $5 million to $4 million. The bill has a $950,000 General Revenue Fund impact and was signed April 26 by Fallin.

• HB2348 modifies language related to standard deductions in the Oklahoma Income Tax Code. It provides that 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 will 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 of 1986, as amended, as follows: $6,350 for single or married filing separately; $12,700 for married filing jointly or a qualifying widower with dependent child and; $9,350 for head of household. The bill provides filing requirements for certain resident and nonresident individual income tax returns. It has a $4.0 million fiscal impact and Fallin signed the bill May 12.

• HB2356 modifies the due and payable date for the franchise tax to May 1 for taxpayers that remitted the maximum amount of franchise tax for the preceding tax year. It provides if the payment is not paid on or before June 1 that penalties will be applied. Fallin signed the bill Wednesday. It is forecast to have a $4.0 million impact.

• HB2357 increases the reinstatement fee amount after a suspension of corporate instruments due to a corporation's failure to pay its franchise tax from $15 to $150. It was signed May 12 by Fallin and is forecast to have a $736,250 fiscal impact.

• HB2361 creates an admission fee on professional sporting events. It establishes a fee of $1 for tickets priced at less than $50 and a fee of $2 for tickets priced greater than $50. It directs the proceeds from the fee be deposited into the General Revenue Fund. The bill directs the Oklahoma Tax Commission to promulgate rules. It also was signed May 12 by Fallin and is forecast to increase FY2018 collections by $2.5 million.

• HB2367 repeals language related to deduction for keeping sales tax records, filing reports and remitting taxes when due and deductions for sellers or vendors keeping use tax record, filing reports and remitting tax when due

• HB2380 authorizes and directs the Oklahoma Tax Commission to establish a Voluntary Disclosure Initiative for certain taxes. It requires a taxpayer to be entitled to a waiver of penalty, interest and other collection fees due on eligible taxes if the taxpayer voluntarily files delinquent tax returns and pays the taxes due during the disclosure initiative. It establishes a time frame by which a voluntary payment of tax liability may be made or the taxpayer may enter into a payment program acceptable to the Tax Commission for payment of the unpaid taxes in full. The bill requires the Tax Commission to abate and not seek to collect any interest, penalties or collection fees that would otherwise be applicable upon payment of the eligible taxes under the Voluntary Disclosure Initiative established. It defines the term "eligible taxes" to include: a mixed beverage tax; a gasoline and diesel tax; a gross production and petroleum excise tax; a sales tax; a use tax; an income tax; and a withholding tax. It provides eligibility for taxpayers to participate in the initiative. The bill requires that if the Tax Commission agrees with the proposed terms for payment of the principal amount of tax due and owing, the penalties and interest otherwise imposed by law upon the principal amount must be waived by operation of law and no further action by the Tax Commission or by the taxpayer will be required for the waiver of the penalty and applicable interest. It limits the period for which additional taxes may be assessed to three taxable years for annually filed taxes or 36 months for taxes that do not have an annual filing frequency. It allows qualified taxpayers to enter into a modified voluntary disclosure agreement. It provides requirements and conditions for such a modified voluntary disclosure agreement. It requires the waiver of penalty and interest to be fully effective provided taxpayer continues payment or collection and remittance of applicable taxes, as required by law, for a period of one year after the tax period(s) for which taxes were paid. It authorizes the Tax Commission to expend necessary available funds, including contracting with third parties, to publicly advertise, assist in the collection of eligible taxes, and administer the Voluntary Disclosure Initiative, exempting it from the provisions of the Oklahoma Statutes. It authorizes the Tax Commission to promulgate rules detailing the terms and other conditions of the program. It sets out goals and responsibilities of the program to be established by the Tax Commission. It provides tasks for teams of Tax Commission employees, under the program, to conduct on visits to nonresidential retail business. It requires the Tax Commission conduct such visits in a manner that shall not disrupt the operations of a business location. It authorizes the Tax Commission to expend necessary available funds, including contracting with third parties, to publicly advertise the programs and assistance available for the filing of returns and the payment of taxes and education of Oklahoma tax laws. It allows such advertising to include advertising that focuses on social networking services. Fallin signed the bill Wednesday. It is forecasted to have a $13.1 million impact.

• SB0840 increases the fee amount to be paid to the court for traffic offenses from $9 to $10, which would go to the Council on Law Enforcement Education and Training (CLEET). It adds monies related to specimen storage and drug screen service fees to the Chief Medical Examiner Revolving Fund. The bill was signed Thursday and is expected to have a $324,420 impact.

Legislators also tapped the Constitutional Reserve or Rainy Day Fund for four FY2018 appropriations:

• SB0842 appropriates $60,185,000 from the Constitutional Reserve Fund to the State Board of Education for the purpose of reimbursing counties for school districts that claim a loss of revenue due to a tax exemption granted under provisions of the Oklahoma Constitution.

• SB0844 appropriates $32 million to the Oklahoma Health Care Authority from the Constitutional Reserve Fund for the 2018 fiscal year. It also allows any unused funds to be used during the 2019 fiscal year.

• SB0852 appropriates $33 million from the Constitutional Reserve Fund for the financial support of public schools for the 2018 fiscal year. It also allows any unused funds to be used during the 2019 fiscal year. • HB2360 appropriates an additional $18 million from the Constitutional Reserve Fund to the State Department of Education for the financial support of public schools

The 2017 legislative session also saw one supplemental appropriation approved: HB2342 , which appropriates for FY2017 $4.2 million from the Constitution Reserve Fund (Rainy Day Fund) and $18.0 million from the Unclaimed Property Fund to the Oklahoma Department of Human Services for Developmental Disabilities Services waivers and $11.8 million from the Unclaimed Property Fund to the Oklahoma Department of Human Services for the purpose of funding Aging Services waivers.

Fallin signed the bill April 6.

Two bills - HB1858 and HB1833 - actually reduce the General Revenue Fund certification number since the agencies involved will become non-appropriated:

• HB1858 creates the Oklahoma Horse Racing Commission Operational Expenses Revolving Fund to consist of all monies received by the Oklahoma Horse Racing Commission to be appropriated, budgeted and expended by the Commission. It requires expenditures from said fund be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of the Office of Management and Enterprise Services for approval and payment. It requires the Fund be used to fund the operations of the Oklahoma Horse Racing Commission within the limits of the budget. It provides for the fund expenditures and restrictions. It requires the Oklahoma Horse Racing Commission to establish the percentage of adjusted gross gaming revenues necessary for providing adequate operational expenses (Operational Expenses Revolving Fund Retention Percentage) by vote at a Commission meeting. It specifies requirements for said percentage. It modifies the distribution percentages for each organization licensee therein. It imposes duty on organization licensees with respect to books and records. It authorizes the Oklahoma Tax Commission to have access to records. It requires verified reports with respect to gaming revenues. It authorizes the Oklahoma Horse Racing Commission to provide repayment of certain amounts from designated funds. It modifies references to the fund. It provides for deposit of fees into the Oklahoma House Racing Commission Operational Expenses Revolving Fund. It provides for the transfer of funds. It repeals language related to the Oklahoma Horse Racing Commission. Fallin signed the bill April 26.

• HB1833, by Rep. Mike Sanders, R-Kingfisher and Sen. A J Griffin, R-Guthrie, dedicates a portion of the Insurance Premium Tax to the State Fire Marshal's Office, making it a non-appropriated agency. It also transfers, the duties, responsibilities and equipment of the Oklahoma Council on Firefighter Training and transfers its duties and equipment to the State Fire Marshal. It creates an advisory committee. The governor signed the bill May 12. [Editor's Notes: 1) All bills cited are by Osborn and David unless otherwise noted; and 2) For a list of the bills and their fiscal impacts, please click The Buzz, "Revenue for FY2018 Appropriations" (The document, which was prepared by the Senate, cites the wrong bill number for the long-lateral bill. The correct bill number is SB0867.)]