Senate Bill No. 1124 establishes new regulations regarding sinking funds for bonds issued by school districts in Oklahoma, excluding technology center school districts. The bill mandates that the millage rate for these sinking funds must be adequate to cover both the redemption of the bond and the payment of interest or judgments within the same period for which the bond was issued. Additionally, if a school district redeems a bond below par before its maturity date, the tax levied for that bond's redemption will be reduced to zero for at least one full tax year following the redemption. The district is also prohibited from issuing new bonds for the same purpose for at least one year after the redemption.

The bill further empowers the State Auditor and Inspector to enforce compliance with these provisions, including the ability to promulgate rules and require documentation. If a school district fails to comply with the regulations, it will receive a notice of noncompliance and may face financial penalties, including the transfer of a portion of its State Aid allocation to the Education Reform Revolving Fund. For districts that receive subsequent notices of noncompliance and do not receive State Aid, there are restrictions on the issuance of new bonds that would require a tax levy exceeding 50% of the maximum authorized rate until compliance is achieved. The act is set to take effect on November 1, 2025.