Oklahoma State Sen. David Bullard (R-Durant) has introduced Senate Bill 960, asking for a county option to tax aggregate sales. If passed, each aggregate producing county may hold an election opting to tax up to 10 cents per ton on aggregates mined in that county.
Bullard represents Bryan, Coal, Atoka, Marshall and roughly the eastern half of Johnston County.
Three earlier versions of this bill in past years originated in the House of Representatives and were stewarded through the house by local representative and Speaker of the House Charles McCall. The House passed the earlier versions three times with majority support, only to have the bill die in committee in the state senate. To become law, bills must pass both the House and the Senate and be signed by the governor.
Using a new approach and starting in the state senate, Bullard wrote the bill with the revenue from thetaxtobesharedequallybetween the county and the municipalities within the county.
“Fifty percent (50%) shall be apportioned to the general revenue fund of municipalities within the county on a proportional basis of their population, according to the most recent Federal Decennial Census,” Bullard wrote in the bill. The bill, if passed, will allow counties to place a severance tax on all materials which are surface mined - not including coal - for purposes of producing aggregate and mined within their county.
Severance taxes are taxes imposed on the removal of natural resources within a taxing jurisdiction. Severance taxes, also known as gross production tax, are used in the state of Oklahoma to generate revenue from non-renewable resources.
Senate Bill 960 states that counties are restricted to use revenue from this bill for roads and bridges. Countyroadsandbridges,according to county commissioners, sustain damage from heavy trucks taking materials from these mines to their destination.
For municipalities, as currently written, the bill allows the municipality to use the severance tax for infrastructure. Infrastructure includes roads, bridges, municipal utilities, and other capital improvements for the benefit of the municipality.
The Oklahoma Tax Commission (OTC) can be authorized by the county to collect the tax on the county’s behalf. The OTC will have enforcement authority on this tax.
“Eighty-million tons of aggregates are mined annually in Oklahoma,” Gary Greene, local rancher and advocate for taxes on aggregates, recently said.
According to Greene, there is mininginall77Oklahomacounties.
Top producing counties are Johnston, Tulsa, Kiowa, Pontotoc, Choctaw, Caddo, Bryan, McCurtain, Wagoner, Murray, Rogers, Comanche, Atoka, Major, Oklahoma, Pittsburg, Sequoyah and Mayes.
Many other counties produce over one million tons each, all with no gross production tax due to a lack of state level action. Greene also noted that, according to the Oklahoma Department of Mines, the volume of aggregate that is removed by mining is strictly selfreported by the mining companies.
Based on self-reporting, if all aggregates reported were taxed at 10 cents per ton, this would be an eight-million investment in rural county roads and municipalities annually.
In a statement released to the Johnston County Sentinel, District 14 State Sen. Jerry Avlord stated: “In regard to Senate Bill 960, I believe that Senator Bullard has done a good job in framing this bill. I believe that the power is, and always should be, in the people. This bill provides a county option so that each individual county can operate in the way that is best for said county.
“If this goes forward, it will allow the people of the county a vote whether they want to implement this aggregate severance tax or not. I like the spirit of the bill because it provides people the voice, not the state. If this moves forward, it will provide funding for roads and bridges - not only county roads and bridges, but municipality roads and bridges within the county. This would not be a statewide tax, but a county-by-county option through a vote of the people. I think this point is very important. This bill also is limited to 10 cents a ton or less. I will be watching this bill to see if there are any changes or amendments as it moves forward.”
District 14 represents Oklahomans in Carter, Murray, Love and roughly the western half of Johnston County, including Tishomingo. Alvord replaced former Sen. Frank Simpson,whowasterm-limitedand could not run again.
Also stated in the bill is that no severance tax shall be applicable to materials extracted by an individual person or persons from real property they own and not sold for profit. The tax would also not apply to limestone extracted for agricultural purposes.
Also not taxed in this bill would be the sale of sand for use in hydraulic fracturing operations, and the sale of materials to be used by individuals for the production of goods within this state.