Answer: The sentence that is correctly punctuated is "I was born December 16, 1967 in Seattle, Washington," said Sheila.
Explanation: Punctuation rules state that, when writing dates, a comma must be included between the day of the month and the year. Therefore, there must be a comma between "16" and "1967". Moreover, a comma that separates the city ("Seattle") from the state ("Washington") must also be included. Furthermore, no comma should be added after the year and before the preposition "in"; however, another comma should be included before the final quotation mark in order to indicate that the words that are inside the quotation marks have been pronounced by someone else ("Sheila").