Oklahoma 2022 Regular Session

Oklahoma House Bill HB4085 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	An Act
2		-	ENROLLED HOUSE
3		-	BILL NO. 4085 By: Wallace, Dempsey, and Lowe
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	27	+
	28	+	STATE OF OKLAHOMA
	29	+
	30	+	2nd Session of the 58th Legislature (2022)
	31	+
	32	+	CONFERENCE COMMITTEE
	33	+	SUBSTITUTE
	34	+	FOR ENGROSSED
	35	+	HOUSE BILL NO. 4085 By: Wallace, Dempsey, and Lowe
4	36		(Dick) of the House
5	37
6	38		and
7	39
8	40		Howard, Jech, and Kirt of
9	41		the Senate
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12	44
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	47	+
	48	+	CONFERENCE COMMITTEE S UBSTITUTE
15	49
16	50		An Act relating to revenue and taxation; cr eating the
17	51		Oklahoma Rural Jobs Act; defining terms; establishing
18	52		requirements; establishing application proc ess;
19	53		providing for a tax credit; establishing an
20	54		authorization amount limit; establishing inve stment
21	55		requirements; allowing for lapse in certificati on;
22	56		creating a credit; allowing for transfer of credit;
23	57		providing for recapture of credits; determining how
24	58		recaptured credits are to be allocated; creating
25	59		ownership limitations; creating reporting
26	60		requirements; creating a program exit process;
27	61		establishing a sunset date; amending 68 O.S. 2021,
28	62		Section 205, which relates to certain ta x
29	63		information; providing exception related to certain
30	64		tax credits; providing for codification; and
31	65		providing an effective date.
32	66
33	67
34	68
35	69
36		-	~~SUBJECT~~: ~~Revenue and taxation~~
	70	+	BE IT ENACTED BY THE PE OPLE OF THE STATE OF OKLAHOMA:
37	71
38		-	BE IT ENACTED BY THE PE OPLE OF THE STATE OF OKLAHOMA:
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40	97		SECTION 1. NEW LAW A new section o f law to be codified
41	98		in the Oklahoma Statutes as Section 3930 of Title 68, unless there
42	99		is created a duplicat ion in numbering, reads as follows:
43		-
44	100		This act shall be known a nd may be cited as the "Oklahoma Rural
45	101		Jobs Act".
46		-	ENR. H. B. NO. 4085 Page 2
47	102		SECTION 2. NEW LAW A new section of law to b e codified
48	103		in the Oklahoma Statute s as Section 3931 of Title 68, unless there
49	104		is created a duplication in numbering, reads as follows:
50		-
51	105		As used in this act:
52		-
53	106		1. "Affiliate" means an entity that directly, or indirectly
54	107		through one or more intermedia ries, controls, or is controlled by,
55	108		or is under the common control with another entity. An entity is
56	109		controlled by another entity if the controll ing entity holds,
57	110		directly or indirectly , the majority of voting or ownershi p interest
58	111		in the controlled entity or has control over day-to-day operations
59	112		of the controlled entity by contract or by law;
60		-
61	113		2. "Applicable percentage" means zero percent (0%) for the
62	114		first two credit allowance dates, and fifteen percent (15%) for the
63	115		next four credit allowance dates;
64		-
65	116		3. "Capital investment" means any equity investment in a rural
66	117		fund by a rural investor which:
67		-
68	118		a. is acquired after the effective date of this act at
69	119		its original issuance solely in exchange for cash,
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71	146		b. has one hundred percent (100% ) of its cash purchase
72	147		price used by the rural fund to make qualified
73	148		investments in eligible businesses located in this
74	149		state by the third anniversary of the initial credit
75	150		allowance date, and
76		-
77	151		c. is designated by the rural fund as a capital
78	152		investment under this act and is cert ified by the
79	153		Department under the provisio ns of Section 3 of this
80	154		act. This shall include any capital investment that
81	155		does not meet the provisions of paragraph 1 of
82	156		subsection A of Section 3 of this act, if such
83	157		investment was a capital investment in the hands of a
84	158		prior holder;
85		-
86	159		4. "Credit allowance date" means the date on which the
87	160		Department certifies a rural fund's capital investment and each of
88	161		the five anniversary dates of such date thereafter;
89		-
90	162		5. "Department" means the Oklahoma Department of Commerce;
91		-	ENR. H. B. NO. 4085 Page 3
92	163		6. "Eligible business" means a business that, at the time of
93	164		the initial qualifie d investment in the business:
94		-
95	165		a. has fewer than two hundred fifty employees, and
96		-
97	166		b. has its principal business operations in the state.
98		-
99	167		Any business which is classified as an eligible business at the
100	168		time of the initial investment in such business by a rural fund
101	169		shall remain classified as an eligible business and may receive
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102	196		follow-on investments from any rural fund, and such follow-on
103	197		investments shall be qualified investments even though such business
104	198		may not meet the definition of an eligible business at the time of
105	199		such follow-on investment;
106		-
107	200		7. "Principal business operations" means the location where at
108	201		least sixty percent (60%) of a business's employees work or where
109	202		employees who are paid at least sixty percent (60%) of such
110	203		business's payroll work. A business that has agreed to relocate
111	204		employees using the proceeds of a qualified investment to establish
112	205		its principal business operations in a new location shall be deemed
113	206		to have its principal business operations in such new location if it
114	207		satisfied the requirements of this paragraph no later than one
115	208		hundred eighty (180) days after receiving a qualified investment;
116		-
117	209		8. "Purchase price" means the amount paid to the rural fund
118	210		that issues a capital investment which shall not exceed the amount
119	211		of capital investment authority certified under the provisions of
120	212		Section 3 of this act;
121		-
122	213		9. "Qualified investment" means any investment in an eligible
123	214		business or any loan to an eligible business with a stated maturity
124	215		date of at least one (1) year after the date of issuance, excluding
125	216		revolving lines of credit and senior -secured debt unless the chief
126	217		executive or similar officer of the eligible business certifies that
127	218		the eligible business sought and was denied similar financing from a
128	219		depository instituti on, by a rural fund; provided that, with respect
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129	246		to any one eligible business, the maximum amount of investments made
130	247		in such business by one or more rural funds, on a collective basi s
131	248		with all of the businesses' affiliates, with the proceeds of the
132	249		capital investments, shall be the greater of twenty percent (20%) of
133	250		the rural fund's capital investment authority or Six Million Five
134	251		Hundred Thousand Dollars ($6,500,000.00), exclusive of investments
135	252		made with repaid or redeemed investments or interest or profits
136		-	realized thereon; ENR. H. B. NO. 4085 Page 4
137		-
	253	+	realized thereon;
138	254		10. "Rural area" means any county of this state that has a
139	255		population of less than seventy-five thousand (75,000) or an y city
140	256		or town of this state that has a popula tion not to exceed seven
141	257		thousand (7,000) accordi ng to the 2020 Federal Decennial Census of
142	258		the United States;
143		-
144	259		11. "Rural fund" means an entity certified by the Department
145	260		under the provisions of Section 3 of this act;
146		-
147	261		12. "Rural investor" means an entity that makes a capital
148	262		investment in a rural fund;
149		-
150	263		13. "Senior-secured debt" means any loan that is secured by a
151	264		first mortgage on real estate with a loan-to-value ratio of less
152	265		than eighty percent (80%); and
153		-
154	266		14. "State tax liability" means the tax imposed under Section
155	267		2355, 2355.1P-4, or 2370 of Title 68 of the Oklahoma Statutes or
156	268		Section 624 or 628 of Title 36 of the Oklahoma Statutes . An
157	269		insurance company claiming a credit against s tate premium tax or
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158	296		retaliatory tax or any other tax imposed by Section 624 or 628 of
159	297		Title 36 of the Oklahoma Statutes shall not be required to pay any
160	298		additional retaliatory tax under Section 628 of Title 36 of the
161	299		Oklahoma Statutes as a result of c laiming the credit. The credit
162	300		may fully offset any retaliatory tax impo sed by Section 628 of Title
163	301		36 of the Oklahoma Statutes.
164		-
165	302		SECTION 3. NEW LAW A new section of law to be codified
166	303		in the Oklahoma Statutes as Sec tion 3932 of Title 68, unless there
167	304		is created a duplica tion in numbering, rea ds as follows:
168		-
169	305		A. A rural fund that seeks to have an equity inve stment
170	306		certified as a capital investment eligible for credits authorized
171	307		under the provisions of this act shall apply to the D epartment. The
172	308		Department shall begin accepting applications within ninety (90)
173	309		days of the effective date of this act. The application shall
174	310		include:
175		-
176	311		1. The amount of capital investment requested;
177		-
178	312		2. A copy of the applicant's or an affiliate of the applicant's
179	313		licenses as a rural business investment company under 7 U.S.C.,
180	314		Section 2009cc or as a small business investment company under 15
181		-	U.S.C., Section 681, and a certificate executed by an executive ~~ENR. H. B. NO. 4085 Page 5~~
	315	+	U.S.C., Section 681, and a certificate executed by an executive
182	316		officer of the applicant attesting t hat such license remains in
183	317		effect and has not been revoked;
184		-
185	318		3. Evidence that, as of the date the application is submitted,
186	319		the applicant or affi liates of the applicant have invested at least
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187	346		One Hundred Million Dollars ($100,000,000.00) in nonpublic companies
188	347		located in counties within the United States with a p opulation of
189	348		less than seventy-five thousand (75,000) according to the 2010
190	349		Federal Decennial Census of the United States;
191		-
192	350		4. A business plan that includes a revenue-impact assessment
193	351		projecting state and local tax rev enue to be generated by the
194	352		applicant's proposed qualified investments, prepared by a nationally
195	353		recognized, third-party, independent economic forecasting firm using
196	354		a dynamic economic forecasting model that analyzes the applicant's
197	355		business plan over the ten (10) years following the date the
198	356		application is submitted to t he Department. Such plan shall include
199	357		an estimate of the number of jobs create d and jobs retained in this
200	358		state as a result of the applicant's qualified investments; and
201		-
202	359		5. A nonrefundable application fee of Five Thousand Dollars
203	360		($5,000.00) payable to the Department.
204		-
205	361		B. Within thirty (30) days after the receipt of a completed
206	362		application, the Department shall grant or deny the application in
207	363		full or in part. The Department shall deny the application if:
208		-
209	364		1. The applicant does not satisfy all the c riteria provided
210	365		under subsection A of this section;
211		-
212	366		2. The revenue-impact assessment submitted with the application
213	367		does not demonstrate that the applicant's business plan will result
214	368		in a positive fiscal impact on the state ove r a ten-year period that
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215	395		exceeds the cumulative amount of tax credits that would be issued to
216	396		the applicant if the application was approved; or
217		-
218	397		3. The Department has already approved the maximum amount of
219	398		capital investment authority under Section 4 of this act.
220		-
221	399		C. If the Department denies any part of the application, it
222	400		shall inform the applicant of the grounds for such denial. If the
223	401		applicant provides any additional information required by the
224	402		Department or otherwi se completes its application within f ifteen
225	403		(15) days of the notice of denial, the application shall be
226		-	considered complete as of the original date of submission. If the ~~ENR. H. B. NO. 4085 Page 6~~
	404	+	considered complete as of the original date of submission. If the
227	405		applicant fails to provide the information or fails to complete its
228	406		application within the fifteen-day period, the application shall
229	407		remain denied and must be resubmitted with a new submission date and
230	408		a new application fee.
231		-
232	409		D. Upon approval of an application, the Department shall
233	410		certify the proposed equity investment as a capital investment
234	411		eligible for credits under this act, subject to limitations laid out
235	412		in Section 4 of this act. The Department shall provide written
236	413		notice of the certification to the applicant which shall include the
237	414		amount of the applicant's capital investment authority. The
238	415		Department shall certify capital investments in the order that the
239	416		application is received by the Department. Applications received on
240	417		the same day shall be deemed to have been received simultaneously.
241	418		For applications that are complete and received on the same day, the
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242	445		Department shall certify applications in proportionate percentages
243	446		based upon the ratio of the amount of capital investment authority
244	447		requested in all applications.
245		-
246	448		SECTION 4. NEW LAW A new section of la w to be codified
247	449		in the Oklahoma Statu tes as Section 3933 of Title 68, unless there
248	450		is created a duplication in numbering, reads as follows:
249		-
250	451		A. The Department shall certify capital investment authority
251	452		under the provisions of this act in amounts that woul d not authorize
252	453		more than Fifteen Million Dollars ($15,000,000.00) in state tax
253	454		credits to be claimed against state tax liability in any calendar
254	455		year, excluding any credit amounts carried forward as provided under
255	456		subsection A of Section 5 of this act. Within ninety (90) days of
256	457		the applicant receiving notice of certifi cation, the rural fund
257		-	shall issue the capital investment to and receive cash in the amount
258		-	of the certified amount from a rural investor. At least ten percent
259		-	(10%) of the rural investor's capital investment shall be composed
260		-	of capital raised by the rural investor directly or indirectly from
261		-	sources including directors, members, employees, officers, and
262		-	affiliates of the rural investor, other than the amount invested by
263		-	the allocatee claiming the tax credits in exchange for such
264		-	allocation of tax credit s. The rural fund shall provide the
265		-	Department with evidence of the receipt of the cash investment
266		-	within ninety-five (95) days of the applicant receiving notice of
267		-	certification.
	458	+	shall issue the capital investment to, and receive cash in the
	459	+	amount of the certified amount from a rural investor. At least ten
	460	+	percent (10%) of the rural investor's capital investment shall be
	461	+	composed of capital raised by the rural investor directly or
	462	+	indirectly from sources including directors, members, employees,
	463	+	officers, and affiliates of the rural investor, other than the
	464	+	amount invested by the allocatee cl aiming the tax credits in
	465	+	exchange for such allocation of tax credit s. The rural fund shall
	466	+	provide the Department with evidence of the receipt of the cash
	467	+	investment within ninety-five (95) days of the applicant receiving
	468	+	notice of certification.
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268	494
269	495		B. If the rural fund does not receive the cash investment and
270	496		issue the capital investment within such time period following
271		-	receipt of the certificate notice, the certification shall lapse and ~~ENR. H. B. NO. 4085 Page 7~~
	497	+	receipt of the certificate notice, the certification shall lapse and
272	498		the rural fund shall not issue the capital investment without
273	499		reapplying to the Department for certificati on. Lapsed
274	500		certifications shall revert to the Department and shall be reissued
275	501		pro rata to applicants whose capital investment allocations were
276	502		reduced in accordance with the application process provided under
277	503		subsection D of Section 3 of this act.
278		-
279	504		C. A rural fund, before making a qualified investment, may
280	505		request from the Department a written opinion as to whether th e
281	506		business in which it proposes to invest is an eligible business.
282	507		The Department, no later than fifteen (15) business days after the
283	508		date of receipt of such request, shall notify the rural fund of its
284	509		determination. If the Department fails to notify the rural fund of
285	510		its determination by the twentieth business day, the business in
286	511		which the rural fund proposes to invest shall be deemed an eligible
287	512		business.
288		-
289	513		SECTION 5. NEW LAW A new section of law to be codified
290	514		in the Oklahoma Stat utes as Section 3934 of Title 68, unless there
291	515		is created a duplication in numbering, rea ds as follows:
292		-
293	516		A. Upon making a capital investment in a rural fund, a rural
294	517		investor shall have a right to a credit against such entity's state
295	518		tax liability that may be utilized on e ach credit allowance date of
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296	545		such capital investment in an amount equal to the applicable
297	546		percentage for such credit allowance date multiplied by the purchase
298	547		price paid to the rural fund for the capital investment. The amount
299	548		of the credit claimed by a rural investor shall not exceed the
300	549		amount of such entity's state tax liability for the tax year for
301	550		which the credit is claimed. Any amount of credit that a rural
302	551		investor is prohibited from claiming in a tax year as a result of
303	552		this section may be carried forward for use in any of the five (5)
304	553		subsequent tax years, but shall not be carried back to prior tax
305	554		years. It is the intent of this act tha t a rural investor claiming
306	555		a credit under this act is not required to pay any additional tax
307	556		that may arise as a result of claiming such credit.
308		-
309	557		B. No credit claimed under the provisions of this act shall be
310	558		refundable or saleable on the open market. Credits earned by or
311	559		allocated to a partnership, limited liability company, or S-
312	560		corporation may be allocated to the partners, members, or
313	561		shareholders of such entity for their direct use in accordance with
314	562		the provisions of any agreement among such partners, members, or
315	563		shareholders, and a rural fund shall notify the Department of the
316		-	names of the entities that are eligible to utilize transfer of a ~~ENR. H. B. NO. 4085 Page 8~~
	564	+	names of the entities that are eligible to utilize transfer of a
317	565		capital investment upon such allocation, ch ange, or transfer. Such
318	566		allocation shall not be considered a sale for the purpose of this
319	567		section.
320	568
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321	594		C. The Department may recapture credits from a taxpay er that
322	595		claimed a credit authorized under this section if:
323		-
324	596		1. The rural fund does not invest sixty percent (60%) of its
325	597		capital investment authority in qualified investments in this state
326	598		within two (2) years of the credit allowance date, and one hundred
327	599		percent (100%) of its ca pital investment authority in qualified
328	600		investments in this state within three (3) years of the credit
329	601		allowance date; provided, that at least seventy percent (70%) of
330	602		these initial qualified investments must be made in eligible
331	603		businesses located in rural areas;
332		-
333	604		2. The rural fund fails to maintain qualified investment s equal
334	605		to ninety percent (90%) of its capital invest ment authority from the
335	606		third anniversary until the sixth anniversary of the credit
336	607		allowance date, with seventy percent (70%) of such inv estments
337	608		maintained in eligible businesses located in rural areas. For each
338	609		year the rural fund fails to maintain such investments, the
339	610		Department may recapture an amount of such year's allowed credits
340	611		equal to the percentage difference between ninety per cent (90%) of a
341	612		rural fund's capital investment authority and the actual amount of
342	613		qualified investments maintained for such year. For the purposes of
343	614		this subsection, a qualified investment is considered even if the
344	615		qualified investment was sold or repaid so long as the rural fund
345	616		reinvests an amount equal to the capital returned or recovered or
346	617		repaid by the rural fund from the original investmen t, exclusive of
	618	+
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	637	+	19
	638	+	20
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	643	+
347	644		any profits realized, in other qualified investments in this state
348	645		within twelve (12) months of receipt of such capital. Amounts
349	646		received periodically by a rural fund shall be treated as
350	647		continually invested in qualified investment s if the amounts are
351	648		reinvested in one or more qualified investments by the end of the
352	649		following calendar year. A rural fund shall not be required to
353	650		reinvest capital returned from qualified investments after the fifth
354	651		anniversary of the credit allowance date , and such qualified
355	652		investments shall be considered held continuously by the rural fund
356	653		through the sixth anniversary of the credit allowance date;
357		-
358	654		3. Prior to the earlier of exiting the program in accordance
359	655		with this act or thirty (30) days after the sixt h anniversary of the
360	656		credit allowance date, the rural fund makes a distribution or
361		-	payment that results in the rural fund having less than one hundred ~~ENR. H. B. NO. 4085 Page 9~~
	657	+	payment that results in the rural fund having less than one hundred
362	658		percent (100%) of its capital investment authority invested in
363	659		qualified investments in the state or held in cash or other
364	660		marketable securities; or
365		-
366	661		4. The rural fund violates the provisions of Section 6 of this
367	662		act, in which case the Department may recapture an amount equal to
368	663		the amount of the rural fund's capital investment authority found to
369	664		be in violation of such provisions.
370		-
371	665		For the purposes of m eeting and maintaining the objectives
372	666		established for investment i n paragraphs 1 and 2 of this subsection,
373	667		a rural fund's qualified investment s shall be multiplied by a factor
	668	+
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	670	+	2
	671	+	3
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	673	+	5
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	678	+	10
	679	+	11
	680	+	12
	681	+	13
	682	+	14
	683	+	15
	684	+	16
	685	+	17
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	687	+	19
	688	+	20
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	693	+
374	694		of one and one-quarter (1 1/4) in counties with less than thirty
375	695		thousand (30,000) in population and more than thirteen thousand
376	696		(13,000) in population and shall be multiplied by a factor of one
377	697		and one-half (1 1/2) in counties with a population of thirteen
378	698		thousand (13,000) or less.
379		-
380	699		D. Recaptured credits and related capital investment authority
381	700		shall revert to the Department and shall be reissued pro rata to
382	701		applicants whose capital investment allocations were reduced in
383	702		accordance with the application process provided under subsection D
384	703		of Section 3 of this act.
385		-
386	704		E. No recapture shall occur until the rural fund has been given
387	705		notice of noncomplian ce and afforded six (6) months from the date of
388	706		such notice to cure the noncompl iance.
389		-
390	707		SECTION 6. NEW LAW A new section of law to be codified
391	708		in the Oklahoma Statutes as Section 3935 of Title 68, unless there
392	709		is created a duplicatio n in numbering, reads as follows:
393		-
394	710		No eligible business that receives a qualified investment under
395	711		the provisions of this act, or any affiliates of such eligible
396	712		business, shall directly or in directly:
397		-
398	713		1. Own or have the right to acquire an ownership interest in a
399	714		rural fund or member or affiliate of a rural fund including, but not
400	715		limited to, a holder of a capital investment issued by a rural fund;
401	716		or
402	717
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	741	+	24
	742	+
403	743		2. Loan to or invest in a rural fund or any member or affiliate
404	744		of a rural fund including, but not limited to, a holder of capital
405		-	investment issued by a rural fund, where the proceeds of such loan ~~ENR. H. B. NO. 4085 Page 10~~
	745	+	investment issued by a rural fund, where the proceeds of such loan
406	746		or investment are directly or indirectly used to fund or refinance
407	747		the purchase of capital investments under this act.
408		-
409	748		SECTION 7. NEW LAW A new section of law to be codified
410	749		in the Oklahoma Statutes as Sec tion 3936 of Title 68, unless there
411	750		is created a duplication in numbering, rea ds as follows:
412		-
413	751		A. Rural funds shall submit a report to the Department within
414	752		the first fifteen (15) business da ys after the second and third
415	753		anniversary of the initial credit allowance date. The report
416	754		following the second anniversary shall provide documentation as to
417	755		the investment of sixty percent (60%) of the purchase price of such
418	756		capital investment in qualified investments. The report following
419	757		the third anniversary shall provide documentation as to the
420	758		investment of one hundred percent (100%) of the purchase price of
421	759		such capital investment in qualified investments. Unless previously
422	760		reported pursuant to th is subsection, such reports shall also
423	761		include:
424		-
425	762		1. The name and location of ea ch eligible business receiving a
426	763		qualified investment;
427		-
428	764		2. Bank statements of such rural fund evidencing each qualified
429	765		investment;
	766	+
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430	791
431	792		3. A copy of the written opinion of the Department, as provided
432	793		in subsection C of Section 4 of this act, or evidence that such
433	794		business was an eligible business at the time of such qualified
434	795		investment, as applicable;
435		-
436	796		4. The number of jobs created and jobs retained as a result of
437	797		each qualified investment;
438		-
439	798		5. The average salary of positions described in paragraph 4 of
440	799		this subsection; and
441		-
442	800		6. Such other information as required by the Depart ment.
443		-
444	801		B. For all subsequent years, rural funds shall submit an annual
445	802		report to the Department within ninety (90) days of the beginning of
446	803		the calendar year during the compliance period. The report shall
447	804		include, but is not limited to, the following:
448		-
449	805		1. The number of jobs created and jobs retained as a result of
450		-	qualified investments; ENR. H. B. NO. 4085 Page 11
451		-
	806	+	qualified investments;
452	807		2. The average annual salary of positions described in
453	808		paragraph 1 of this subsection; and
454		-
455	809		3. Such other information as required by the Department.
456		-
457	810		C. On or after the sixth anniversary of the credit allowance
458	811		date, a rural fund may apply to the Department to exit the program
459	812		and no longer be subject to the regulation hereunder. The
460	813		Department shall res pond to the exit application within f ifteen (15)
461	814		days of receipt. In evaluating the exit application, the fact that
462	815		no credits have been recaptured and that the rural fund has not
	816	+
	817	+	Req. No. 11551 Page 17 1
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463	842		received a notice of recapture that has not been cured pursuant to
464	843		subsection E of Section 5 of this act shall be sufficient evidence
465	844		to prove that the rural fund is eligible for exit. The Department
466	845		shall not unreasonably deny an exit application submitted under this
467	846		section. If an exit application is denied, the notice shall include
468	847		the reasons for the determination.
469		-
470	848		SECTION 8. NEW LAW A new section of law to be co dified
471	849		in the Oklahoma Statutes as Section 3937 of Title 68, unless there
472	850		is created a duplication in numbering, reads as follows:
473		-
474	851		The Department shall accept no new applications for tax credits
475	852		authorized under this act after December 1, 2032.
476		-
477	853		SECTION 9. AMENDATORY 68 O.S. 2021, Section 205, is
478	854		amended to read as follows:
479		-
480	855		Section 205. A. The records and files of the Oklahom a Tax
481	856		Commission concerning the administra tion of the Uniform Tax
482	857		Procedure Code or of any state tax law shall be considered
483	858		confidential and privileged, except as otherwi se provided for by
484	859		law, and neither the Tax Commission nor any employee engaged in th e
485	860		administration of the Tax Commission or charged with the custody of
486	861		any such records or files nor any person who may have secured
487	862		information from the Tax Commission sha ll disclose any information
488	863		obtained from the records or files or from any examinatio n or
489	864		inspection of the premises or propert y of any person.
490	865
	866	+	Req. No. 11551 Page 18 1
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	890	+
491	891		B. Except as provided in paragraph 26 of subsection C of this
492	892		section, neither the Tax Commission nor any emplo yee engaged in the
493	893		administration of the Tax Commission or charged with the custody o f
494	894		any such records or files shall be requi red by any court of this
495		-	state to produce any of the records or files fo r the inspection of ~~ENR. H. B. NO. 4085 Page 12~~
	895	+	state to produce any of the records or files fo r the inspection of
496	896		any person or for use in any action o r proceeding, except when the
497	897		records or files or the facts shown thereby are directl y involved in
498	898		an action or proceeding purs uant to the provisions of the Uniform
499	899		Tax Procedure Code or of the state tax law, or when the
500	900		determination of the action or proc eeding will affect the validity
501	901		or the amount of the claim of the state pursuant to a ny state tax
502	902		law, or when the information contained in the records or files
503	903		constitutes evidence of violation of t he provisions of the Uniform
504	904		Tax Procedure Code or of any state tax law.
505		-
506	905		C. The provisions of this section shall not prevent the Tax
507	906		Commission, or with respect to the Oklahoma Department of Commerce
508	907		in administration of the Oklahoma Rural Job s Act as provided by
509	908		paragraph 22 of this subsection, from disclosing the following
510	909		information and no liability whatsoever, civil or criminal, shall
511	910		attach to any member of the Tax Commission, or the Oklahoma
512	911		Department of Commerce as applicable, or any employee ther eof for
513	912		any error or omission in the disclosure of such inf ormation:
514		-
515	913		1. The delivery to a tax payer or a duly authorized
516	914		representative of the taxpayer of a copy of any report or any other
	915	+
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	917	+	2
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	929	+	14
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	931	+	16
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	938	+	23
	939	+	24
	940	+
517	941		paper filed by the taxp ayer pursuant to the provisions of the
518	942		Uniform Tax Procedure Code or of any state tax law;
519		-
520	943		2. The exchange of information that is not pro tected by the
521	944		federal Privacy Protection A ct, 42 U.S.C., Section 2000aa et seq.,
522	945		pursuant to reciprocal agreements ent ered into by the Tax Commission
523	946		and other state agencies or agencies of the federal government;
524		-
525	947		3. The publication of statistics so class ified as to prevent
526	948		the identification of a particular report and the items thereof;
527		-
528	949		4. The examination of records an d files by the State Auditor
529	950		and Inspector or the duly authorized agents of the State Auditor and
530	951		Inspector;
531		-
532	952		5. The disclosing of infor mation or evidence to the Oklahoma
533	953		State Bureau of Investigation, Attorney General, Oklahoma State
534	954		Bureau of Narcotics a nd Dangerous Drugs Control, any district
535	955		attorney or agent of any federal law enforcement agency when t he
536	956		information or evidence is to be used by such officials to
537	957		investigate or prosecute violations of the criminal provisions of
538	958		the Uniform Tax Procedure Code or of any state tax law or of any
539	959		federal crime committed against this state. Any information
540		-	disclosed to the Oklahoma State ~~Bureau~~ of Investigation, Attorney ~~ENR. H. B. NO. 4085 Page 13~~
	960	+	disclosed to the Oklahoma State Bu reau of Investigation, Attorney
541	961		General, Oklahoma State Bureau of Narcotics and Dangerous Drugs
542	962		Control, any district att orney or agent of any federal law
543	963		enforcement agency shall be kept confidential by such person and not
544	964		be disclosed except when presen ted to a court in a prosecution for
	965	+
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	968	+	3
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	975	+	10
	976	+	11
	977	+	12
	978	+	13
	979	+	14
	980	+	15
	981	+	16
	982	+	17
	983	+	18
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	988	+	23
	989	+	24
	990	+
545	991		violation of the tax laws of this state or except as specifically
546	992		authorized by law, a nd a violation by the Oklahoma State Bureau of
547	993		Investigation, Attorney General, Oklahoma State Bureau o f Narcotics
548	994		and Dangerous Drugs Control, district attorney or agent of any
549	995		federal law enforcement agency by otherwise releasing the
550	996		information shall be a felony;
551		-
552	997		6. The use by any division of th e Tax Commission of any
553	998		information or evidence in the poss ession of or contained in any
554	999		report or return filed with any other divisi on of the Tax
555	1000		Commission;
556		-
557	1001		7. The furnishing, at the discretion of the Tax Comm ission, of
558	1002		any information disclosed by its records or files to any official
559	1003		person or body of this sta te, any other state, the Uni ted States or
560	1004		foreign country who is concerne d with the administration or
561	1005		assessment of any similar tax in this state, any ot her state or the
562	1006		United States. The provisi ons of this paragraph shall include the
563	1007		furnishing of information by the Tax Commissio n to a county assessor
564	1008		to determine the amount of gross household income pursuant to the
565	1009		provisions of Section 8C of Article X of the Oklahoma Constitution
566	1010		or Section 2890 of this title. The Tax Commission shall promulgate
567	1011		rules to give guidance to the co unty assessors regarding the type of
568	1012		information which may be used by the county assessors in determining
569	1013		the amount of gross household income pursuant to Section 8C of
570	1014		Article X of the Oklahoma Constitution or Section 2890 of th is
	1015	+
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	1040	+
571	1041		title. The provisions o f this paragraph shall also include the
572	1042		furnishing of information to the State Treasurer for the purpose of
573	1043		administration of the Uniform Unclaimed Property Act;
574		-
575	1044		8. The furnishing of information to other state agencies for
576	1045		the limited purpose of aiding i n the collection of debts owed by
577	1046		individuals to such requesting agencies;
578		-
579	1047		9. The furnishing of information requested by any m ember of the
580	1048		general public and stated in th e sworn lists or schedules of taxable
581	1049		property of public se rvice corporations organi zed, existing, or
582	1050		doing business in this state w hich are submitted to and certified by
583	1051		the State Board of Equalization pursuant to the provisions of
584	1052		Section 2858 of this ti tle and Section 21 of Article X of the
585		-	Oklahoma Constitutio n, provided such ~~information~~ would be a public ~~ENR. H. B. NO. 4085 Page 14~~
	1053	+	Oklahoma Constitutio n, provided such informat ion would be a public
586	1054		record if filed pursuant t o Sections 2838 and 2839 of this title on
587	1055		behalf of a corporation other than a p ublic service corporation;
588		-
589	1056		10. The furnishing of information requested by any member of
590	1057		the general public and stated in the f indings of the Tax Commission
591	1058		as to the adjustment and equalization of the valuation of real and
592	1059		personal property of the countie s of the state, which are submitted
593	1060		to and certified by the State Board of Equalization pursuant to the
594	1061		provisions of Section 2 865 of this title and Section 21 of Article X
595	1062		of the Oklahoma Constitution;
596		-
597	1063		11. The furnishing of information as to the issuance or
598	1064		revocation of any tax permit, license or exemption by the Tax
	1065	+
	1066	+	Req. No. 11551 Page 22 1
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	1090	+
599	1091		Commission as provided for by law. S uch information shall be
600	1092		limited to the name of the person issued the permit, license o r
601	1093		exemption, the name of the business entity authorized to engage in
602	1094		business pursuant to the permit, license or exemption, the address
603	1095		of the business entity and the grounds for revocation;
604		-
605	1096		12. The posting of notice of revocation of any tax permit or
606	1097		license upon the premises of the place of business of any business
607	1098		entity which has had any tax permit or license revoked by the Tax
608	1099		Commission as provided for by law. Suc h notice shall be limited to
609	1100		the name of the person issued the permit or license, the n ame of the
610	1101		business entity authorized to engage in business pursua nt to the
611	1102		permit or license, the address of the business entity and the
612	1103		grounds for revocation;
613		-
614	1104		13. The furnishing of informati on upon written request by any
615	1105		member of the general public as to the outstanding and unpaid amount
616	1106		due and owing by any taxpaye r of this state for any delinquent tax,
617	1107		together with penalty and interest, for which a tax warrant or a
618	1108		certificate of indebted ness has been filed pursuant to law;
619		-
620	1109		14. After the filing of a tax warrant pursuant to law, the
621	1110		furnishing of information upon written request by any member of the
622	1111		general public as to any agreement entered into by the Tax
623	1112		Commission concerning a comprom ise of tax liability for an amount
624	1113		less than the amount of tax liability stated on such warrant;
625	1114
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	1128	+	14
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	1130	+	16
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626	1140		15. The disclosure of informati on necessary to complete the
627	1141		performance of any contract authorized by this title to any person
628	1142		with whom the Tax Commission h as contracted;
629		-	ENR. H. B. NO. 4085 Page 15
630	1143		16. The disclosure of information to any person for a purpose
631	1144		as authorized by the taxpayer pursuant to a waiver o f
632	1145		confidentiality. The waiver shall be in w riting and shall be made
633	1146		upon such form as the Tax Commissi on may prescribe;
634		-
635	1147		17. The disclosure of information required in order to c omply
636	1148		with the provisions of Section 2369 of this title;
637		-
638	1149		18. The disclosure to an employer, as defined in Sections
639	1150		2385.1 and 2385.3 of this title, of information required in order to
640	1151		collect the tax imposed by Section 2385.2 of this title;
641		-
642	1152		19. The disclosure to a plaintiff of a corporation's last -known
643	1153		address shown on the record s of the Franchise Tax Division of the
644	1154		Tax Commission in order for such plaintiff to comply with the
645	1155		requirements of Section 2004 of Title 12 of the Oklahoma Statutes;
646		-
647	1156		20. The disclosure of information directly involved in the
648	1157		resolution of the protest by a taxpayer to an assessment of tax or
649	1158		additional tax or the resolution of a claim for refund filed by a
650	1159		taxpayer, including the disclosure of the pendency of an
651	1160		administrative proceeding involving such protest or claim, to a
652	1161		person called by the Tax Commi ssion as an expert witness or as a
653	1162		witness whose area of knowledge or expertise specifically addresses
654	1163		the issue addressed in the protest or claim for refund. Such
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655	1190		disclosure to a witness shall be limited to information pertaining
656	1191		to the specific knowledg e of that witness as to the transaction or
657	1192		relationship between taxpayer and witness;
658		-
659	1193		21. The disclosure of information necessary to implement an
660	1194		agreement authorized by Section 2702 of this title when such
661	1195		information is directly involved in the resoluti on of issues arising
662	1196		out of the enforcement of a municipal sales tax ordinance. Such
663	1197		disclosure shall be to the governing body or to the municipal
664	1198		attorney, if so designated by the governing body;
665		-
666	1199		22. The furnishing of information regarding incentive pay ments
667	1200		made pursuant to the provisions of Sec tions 3601 through 3609 of
668	1201		this title, or incentive payments made pursuant to the provisions of
669	1202		Sections 3501 through 3508 of this title, or tax credits claimed
670	1203		pursuant to the provisions of S ections 1 through 8 of this act;
671		-
672	1204		23. The furnishing to a pr ospective purchaser of any business,
673	1205		or his or her authorized representative, of infor mation relating to
674		-	any liabilities, delinquencies, as sessments or warrants of the ~~ENR. H. B. NO. 4085 Page 16~~
	1206	+	any liabilities, delinquencies, as sessments or warrants of the
675	1207		prospective seller of the business which have not been filed of
676	1208		record, established or become final and which relate solely to the
677	1209		seller's business. Any disclosure under this paragraph shall only
678	1210		be allowed upon the presentm ent by the prospective buyer, or the
679	1211		buyer's authorized represe ntative, of the purchase contract and a
680	1212		written authorization between the parties;
	1213	+
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681	1238
682	1239		24. The furnishing of information as to the amount of sta te
683	1240		revenue affected by the issuance or granting of any tax permit,
684	1241		license, exemption, deduction, credit or oth er tax preference by the
685	1242		Tax Commission as provided for by law. Such information shall be
686	1243		limited to the type of permit, license, exemption, ded uction, credit
687	1244		or other tax preference issued o r granted, the date and duration of
688	1245		such permit, license, exempt ion, deduction, credit or other tax
689	1246		preference and the amou nt of such revenue. The provisions of this
690	1247		paragraph shall not authorize the disclosu re of the name of the
691	1248		person issued such permit , license, exemption, deduction, credit or
692	1249		other tax preference, or the name of the business entity authorized
693	1250		to engage in business pursuant to the permit, license, exemption ,
694	1251		deduction, credit or other tax p reference;
695		-
696	1252		25. The examination of records and files of a person or entity
697	1253		by the Oklahoma State Bureau of Narcotics and Dangerous Drugs
698	1254		Control pursuant to a court order by a magistrate in whose
699	1255		territorial jurisdiction t he person or entity resides, or wh ere the
700	1256		Tax Commission records and files a re physically located. Such an
701	1257		order may only be issued upon a s worn application by an agent of the
702	1258		Oklahoma State Bureau of Na rcotics and Dangerous Drugs Control,
703	1259		certifying that the person or entity whose records and files are to
704	1260		be examined is the targ et of an ongoing investigation of a felony
705	1261		violation of the Unifo rm Controlled Dangerous Substances Act and
706	1262		that information res ulting from such an examination would likely be
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707	1289		relevant to that investigation. Any r ecords or information obtained
708	1290		pursuant to such an order may only be used by the Oklahoma State
709	1291		Bureau of Narcotics and Dangerous Drugs Control in the investigation
710	1292		and prosecution of a felony violation of the Uniform Cont rolled
711	1293		Dangerous Substances Act. Any such order issued pursuant to this
712	1294		paragraph, along with the underlying application, shall be sealed
713	1295		and not disclosed to the person or entity whose records were
714	1296		examined, for a period of ninety (90) days. The issuing magistrate
715	1297		may grant extensions o f such period upon a showing of good cause in
716	1298		furtherance of the investigation. Upon the expiration of nin ety
717	1299		(90) days and any extensions granted by the magistrate, a c opy of
718		-	the application and order shall be served upo n the person or entity ~~ENR. H. B. NO. 4085 Page 17~~
	1300	+	the application and order shall be served upo n the person or entity
719	1301		whose records were examined, along with a copy of the records or
720	1302		information actually provided by the Tax Commission;
721		-
722	1303		26. The disclosure of information, as prescribed by this
723	1304		paragraph, which is related to the proposed or actual usa ge of tax
724	1305		credits pursuant to Sect ion 2357.7 of this title, the Small B usiness
725	1306		Capital Formation Incentive Act or the Rural Venture Capit al
726	1307		Formation Incentive Act. Unless the context clearly requires
727	1308		otherwise, the terms used in this paragraph shall have the same
728	1309		meaning as defined by Se ction 2357.7, 2357.61 or 2357.72 of t his
729	1310		title. The disclosure of information authorized by this parag raph
730	1311		shall include:
731	1312
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	1325	+	13
	1326	+	14
	1327	+	15
	1328	+	16
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	1337	+
732	1338		a. the legal name of any qualified venture capi tal
733	1339		company, qualified small business capital compan y or
734	1340		qualified rural small business capital company,
735		-
736	1341		b. the identity or legal name of any person or entity
737	1342		that is a shareholder or partner of a qualified
738	1343		venture capital company, qualified small business
739	1344		capital company or qualified rural small business
740	1345		capital company,
741		-
742	1346		c. the identity or legal name of any Oklahoma busi ness
743	1347		venture, Oklahoma small business venture or Oklahoma
744	1348		rural small business venture in which a qualified
745	1349		investment has been made by a capital company, or
746		-
747	1350		d. the amount of funds invested in a qualified venture
748	1351		capital company, the amount of qualified investments
749	1352		in a qualified small business capital company or
750	1353		qualified rural small business capital company and the
751	1354		amount of investments ma de by a qualified venture
752	1355		capital company, qualified small business capital
753	1356		company, or qualified rural small busine ss capital
754	1357		company;
755		-
756	1358		27. The disclosure of specific information as required by
757	1359		Section 46 of Title 62 of the Oklahoma Statutes;
758		-
759	1360		28. The disclosure of specific information as required by
760	1361		Section 205.5 of this title;
761	1362
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762	1388		29. The disclosure of specific information as required by
763		-	Section 205.6 of this title; ENR. H. B. NO. 4085 Page 18
764		-
	1389	+	Section 205.6 of this title;
765	1390		30. The disclosure of information to the State Treasurer
766	1391		necessary to implement Section 236 8.27 of this title;
767		-
768	1392		31. The disclosure of specific information to the Oklahoma
769	1393		Health Care Authority for purposes of determining eligibili ty for
770	1394		current or potential recipients of assistance from the Oklahoma
771	1395		Medicaid Program; or
772		-
773	1396		32. The disclosure of in formation to the Oklahoma Department of
774	1397		Veterans Affairs including but not limited to the name and basis for
775	1398		eligibility of each individual who qualifies for the sales tax
776	1399		exemption authorized in paragraph 34 of Section 1357 of this title .
777		-
778	1400		D. The Tax Commission shall cause to be prepared and made
779	1401		available for public inspection in the office of the Tax Commission
780	1402		in such manner as it may det ermine an annual list containing the
781	1403		name and post office address of each person, whether individual,
782	1404		corporate or otherwise, making and filing an income tax return with
783	1405		the Tax Commission.
784		-
785	1406		It is specifically provided that no liability whatsoever, civil
786	1407		or criminal, shall attach to any member of the Tax Commission or any
787	1408		employee thereof for any error or omission of any name or address in
788	1409		the preparation and publication o f the list.
789		-
790	1410		E. The Tax Commission shall prepare or cause to be prepared a
791	1411		report on all provisions of state tax law that reduce state revenue
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	1413	+	Req. No. 11551 Page 29 1
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	1437	+
792	1438		through exclusions, deductions, credits, exemptions, deferral s or
793	1439		other preferential tax treatments. The report shall be prepared not
794	1440		later than October 1 of each even -numbered year and shall be
795	1441		submitted to the Governor, the President Pro Tempore of the Senate
796	1442		and the Speaker of the House of Representatives. The Tax Commission
797	1443		may prepare and submit supplements to the report at other times of
798	1444		the year if additional or updated information relevant to the report
799	1445		becomes available. The report shall include, for the previou s
800	1446		fiscal year, the Tax Commission's best est imate of the amount of
801	1447		state revenue that would have been collected but for the existence
802	1448		of each such exclusion, deduction, credit, exempt ion, deferral or
803	1449		other preferential tax treatment allowed by law. The Ta x Commission
804	1450		may request the assistance of o ther state agencies as may be needed
805	1451		to prepare the report. The Tax Commission is authorized to require
806	1452		any recipient of a tax incentive o r tax expenditure to report to the
807	1453		Tax Commission such information as req uested so that the Tax
808		-	Commission may fulfil l its obligations as required by this ~~ENR. H. B. NO. 4085 Page 19~~
	1454	+	Commission may fulfil l its obligations as required by this
809	1455		subsection. The Tax Commission may require this information to be
810	1456		submitted in an electronic format. The Tax Commission may disallow
811	1457		any claim of a person for a tax incenti ve due to its failure to file
812	1458		a report as required under the authority of this subsection.
813		-
814	1459		F. It is further provided that the provisions of this section
815	1460		shall be strictly interpreted and shall not be construed as
816	1461		permitting the disclosure of any other inf ormation contained in the
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817	1488		records and files of the Tax Commission relating to income tax or to
818	1489		any other taxes.
819		-
820	1490		G. Unless otherwise provided for in this section, any violation
821	1491		of the provisions of this section shall constitute a misdemeanor and
822	1492		shall be punishable by the imposition of a fine not ex ceeding One
823	1493		Thousand Dollars ($1,000.00) or by impri sonment in the county jail
824	1494		for a term not exceeding one (1) year, or by both such fine and
825	1495		imprisonment, and the offender shall be removed or dismissed from
826	1496		office.
827		-
828	1497		H. Offenses described in Section 2376 of this title shall be
829	1498		reported to the appropriate d istrict attorney of this state by the
830	1499		Tax Commission as soon as the offenses are discov ered by the Tax
831	1500		Commission or its agents or employees. The Tax Commissio n shall
832	1501		make available to the appropriate di strict attorney or to the
833	1502		authorized agent of the di strict attorney its records and files
834	1503		pertinent to prosecutions, and such records and f iles shall be fully
835	1504		admissible as evidence for the purpose of such prosec utions.
	1505	+	SECTION 10. This act shall become e ffective November 1, 2022.
836	1506
837		-	~~SECTION 10.~~ ~~This act shall become e ffective November 1, 2022. ENR. H. B. NO. 4085 Page 20~~
	1507	+	58-2-11551 MAH 05/16/22
838	1508
839		-	Passed the House of Representatives the 20th day of May, 2022.
840		-
841		-
842		-
843		-
844		-	Presiding Officer of the House
845		-	of Representatives
846		-
847		-
848		-	Passed the Senate the 20th day of May, 2022.
849		-
850		-
851		-
852		-
853		-	Presiding Officer of the Senate
854		-
855		-
856		-
857		-	OFFICE OF THE GOVERNOR
858		-	Received by the Office of th e Governor this ____________________
859		-	day of ___________________, 20_______, at _______ o'clock _______ M.
860		-	By: _________________________________
861		-	Approved by the Governor of the State of Oklahoma this _____ ____
862		-	day of ___________________, 20_______, at _____ __ o'clock _______ M.
863		-
864		-
865		-	_________________________________
866		-	Governor of the State of Oklahoma
867		-
868		-	OFFICE OF THE SECRETARY OF STATE
869		-	Received by the Office of the Secretary of State this __________
870		-	day of ___________________, 20_______, at _______ o'clock _____ __ M.
871		-	By: _________________________________