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ENGROSSED HOUSE
BILL NO. 3025 By: Lowe of the House
and
Pugh of the Senate
An Act relating to schools; amending 70 O.S. 2021,
Section 1-117, as amended by Section 1, Chapter 285,
O.S.L. 2025 (70 O.S. Supp. 2025, Section 1-117),
which relates to general fund expenditures;
precluding school gift, grant, or donation monies
received from being calculated in the general fund
carryover for a certain time period; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 70 O.S. 2021, Section 1-117, as
amended by Section 1, Chapter 285, O.S.L. 2025 (70 O.S. Supp. 2025,
Section 1-117), is amended to read as follows:
Section 1-117. A. The general fund of any school district is
hereby defined as a current expense fund and shall consist of all
revenue or monies that can legally be expended within a certain
specified fiscal year, but shall not be considered as including any
money derived from a special building fund levy made in accordance
with the provisions of Section 10 of Article X of the Oklahoma
Constitution, nor shall it include any monies derived from the sale
of bonds issued under the provisions of Section 26 of Article X of
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the Oklahoma Constitution. All monies derived from the proceeds of
the school levies made pursuant to the provisions of Section 9 of
Article X of the Oklahoma Constitution shall be placed in the
general fund provided by this section. Expenditures from the
general fund shall be noncapital in nature. All monies derived from
state-dedicated revenue, state-appropriated revenue unless otherwise
provided for by law, and county sources shall be placed in the
general fund provided for by this section. Except as provided for
in subsections F, K, and L of this section, a district shall not be
authorized to make capital expenditures as defined by this section
from the general fund.
B. For purposes of this section, state-dedicated revenue shall
be any registration or license fees, taxes, or penalties collected
at the state level and distributed to common school districts.
County sources shall be all funds collected by the county and
distributed to common school districts but shall not include any
funds derived from the building fund levy made in accordance with
the provisions of Section 10 of Article X of the Oklahoma
Constitution or funds derived from the sinking fund levy made in
accordance with the provisions of Section 26 of Article X of the
Oklahoma Constitution.
C. For the purposes of this section, a capital expenditure
shall be an expenditure which results in the acquisition of fixed
assets or additions to fixed assets. Capital expenditures shall
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include, but shall not be limited to, purchases of land or existing
buildings, purchases of real property, improvements of grounds and
sites for construction purposes, all expenditures for construction
of buildings unless authorized by the State Board of Education or
the State Board of Career and Technology Education upon application
to the appropriate state board pursuant to subsection F of this
section, additions to buildings, remodeling of buildings if such
remodeling involves changes to roof structures or load-bearing
walls, professional services, salaries and expenses of architects
and engineers hired or assigned to capital projects except for such
services, salaries, and expenses as are applicable in preparation
for a bond issue, expenditures for the initial installation and
extension of service systems and built-in heat or air equipment to
existing buildings, expenditures for the replacement of a building
which has been destroyed, installments and lease payments on
property including interest that have a terminal date and result in
the acquisition of property, and expenditures for preliminary
studies made prior to the time that authority to proceed with a
construction project is given if authority is received within the
same fiscal year that the expenditure was made.
D. Noncapital expenditures shall include, but shall not be
limited to, expenditures for maintenance, repair, and replacement of
property and equipment, initial or additional purchases of furniture
and equipment, direct expenses for maintenance of plant including
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grounds, salaries for maintenance of plant including salaries for
the upkeep of grounds, and repair and replacement of building
structures which do not add to existing facilities and which do not
involve changes in roof structures or load-bearing walls and which
are not classified as a capital expenditure by this section.
E. The State Board of Education shall adopt and amend
regulations regarding the classification, definition, and financial
administration of funds, accounts, and expenditures in accordance
with the requirements of this section.
F. A school district shall be authorized to make capital
expenditures from the general fund to defray the cost of rebuilding
a school building only if a school building or facility has been
destroyed by a fire or natural disaster, such as flood, tornado, or
other act of God, or by an act of a public enemy of the United
States or this state and monies received by the district through
insurance coverage, federal reimbursement, contributions, and
allocation from the State Board of Education from the State Public
Common School Building Equalization Fund are insufficient to rebuild
the facility. Capital expenditures from the general fund pursuant
to this subsection shall be limited to an amount necessary to defray
the cost of rebuilding the facility which exceeds monies received by
the school district through insurance, federal reimbursement,
contributions, and state allocations.
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G. Schools which receive gifts, donations, or state-
appropriated monies for the purpose of capital expenditures or
projects shall place such monies in the building fund, as provided
by Section 1-118 of this title, and not in the general fund. School
districts which receive gifts, grants, or donations of monies for
noncapital expenditures may place the monies in the general fund,
and such monies shall not be required to be used during the year in
which the money was received but may accumulate from year to year
and shall not be considered a part of the general fund collections
until after one (1) year following the year in which the monies were
received when calculating the general fund carryover as provided for
in subsection G of Section 18-200.1 of this title.
H. School districts which receive monies from rental, sale, or
lease of buildings, impact aid monies, or grants, gifts, or
donations for capital purposes, whether from state, federal, or
other sources, may place such monies in the building fund authorized
by Section 1-118 of this title or the general fund authorized by
this section.
I. Any construction of a building included as a capital
expenditure from the general fund of a school district which is
authorized and has had a contractual agreement concerning such
construction executed prior to July 1, 1991, may be proceeded with
and completed as authorized prior to July 1, 1991, as a capital
expenditure from such general fund.
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J. School districts receiving revenues authorized by Section 9B
of Article X of the Oklahoma Constitution shall be authorized to
make capital expenditures from the general revenue fund no greater
than the amount levied by the incentive millage.
K. Upon the approval of the State Board of Education, a school
district shall be authorized to make capital expenditures as defined
in this section from its general fund if:
1. A bond issue has been rejected at an election by the school
district electors voting on that question within the current school
year, as certified by the secretary of the county election board; or
2. The school district has voted indebtedness at any time
within the preceding three (3) school years through the issuance of
bonds or through approval by voters of issuance of new bonds for
more than eighty-five percent (85%) of the maximum allowable
pursuant to the provisions of Section 26 of Article X of the
Oklahoma Constitution as shown on the school district budget filed
with the State Board of Equalization for the current school year and
certifications by the Attorney General prior to April 1 of the
current school year. The State Board of Education shall establish
the rules to administer the provisions of this subsection which
shall include, but not be limited to, specification of a maximum
amount of general fund monies to be used for capital expenditures,
the purposes for which such funds may be expended, and the period of
time in which such funds shall be encumbered.
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L. Other provisions of this section notwithstanding, a school
district shall be authorized to make capital expenditures from the
general fund if the total assessed property valuation per average
daily attendance is less than sixty percent (60%) of the state
average total assessed property valuation per average daily
attendance and if, for each year in which general fund revenue is
used for capital expenditures, the district has voted the five-mill
building fund levy authorized in Section 10 of Article X of the
Oklahoma Constitution and has voted indebtedness through the
issuance of new bonds for at least eighty-five percent (85%) within
the last three (3) years of the maximum allowable pursuant to the
provisions of Section 26 of Article X of the Oklahoma Constitution
as shown on the school district budget filed with the State Board of
Equalization for the current school year and certifications by the
Attorney General prior to April 1 of the school year. Provided, the
maximum amount of general fund revenue used for capital expenditures
pursuant to this subsection shall not exceed five percent (5%) of
the total yearly revenue to the general fund. Such fund may not be
used for capital expenditures for more than five (5) consecutive
years and may only be utilized for remodeling or construction of
classroom facilities and such ancillary facilities to such
classrooms as may be necessary. Provided, further, the
Superintendent of Public Instruction shall certify in writing, prior
to the expenditure of the funds for which provision is made in this
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subsection, that such expenditures are in compliance with the
provisions of this subsection.
SECTION 2. This act shall become effective November 1, 2026.
Passed the House of Representatives the 11th day of March, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the _____ day of __________, 2026.
Presiding Officer of the Senate