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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
HOUSE BILL 4354 By: Hill
AS INTRODUCED
An Act relating to economic development; enacting the
Oklahoma Research and Development Attraction Act;
imposing duty on Oklahoma Departmen t of Commerce;
requiring development of Research and Development
Attraction Grants Program; authorizing award of
matching funds; specifying amount of match; imposing
dollar limit; specifying conditions required for
eligibility; imposing requirement related to eligible
projects; specifying factors in selection; requiring
Oklahoma Department of Commerce to adopt rules;
specifying required content for rules; providing for
codification; and providing an effective date .
BE IT ENACTED BY THE PEOPL E OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 5003.10f of Title 74, unless
there is created a duplication in numbering, reads as follows:
This act shall be known and may be cited as the "Oklahoma
Research and Development Attraction Act".
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 5003.10g of Title 74, unless
there is created a duplication in numb ering, reads as follows:
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A. The Oklahoma Department of Commerce ("Department") shall
create a Research and Development Attraction Grants Program
("Program"), to be administered in ac cordance with this section for
the purpose of fostering research and deve lopment in key industry
clusters, leading to the creation of new products and services that
are brought to market by Oklahoma -based companies, or brought to
market by companies financially sponsored by an Oklahom a-based lead
investor and which conduct a substantial portion of total business
activity in the State of Oklahoma.
B. The Department may award matching funds to eligible
businesses to offset a portion of expenses incurred through a
collaborative researc h and development project engagement with an
Oklahoma institution of highe r education or nonprofit research
institution.
C. The Department may award matching fund s up to fifty percent
(50%) of the cost of the project, not to exceed One Hundred Thousand
Dollars ($100,000.00). A business may receive only one matching
grant under this section per year.
D. In order to be eligible for matching funds under this
section, a business must satisfy all of the following conditions:
1. The business must be an Oklahoma-based small business. For
the purposes of this section, "Oklahoma-based" means a business that
has its principal place of business in this state or a startup that
has raised an equity round in the preceding twelve (12) months, with
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an Oklahoma-based capital provider serving as the lead investor, a nd
that incurs fifty percent (50%) or more of business expenses within
Oklahoma and from Oklahoma service providers. For the purposes of
this section "small business" means a business entity that employs
not more than one hundred (100) persons ;
2. In accordance with the Oklahoma Office of Science and
Innovation's 2021-2026 strategic plan, the business must operate in
one of the state's three strategic industry cluster s, including
aerospace and autonomous systems, life sciences, and energy
diversification;
3. The research and development service provider which partners
with the business must be an Oklahoma-based research entity. For
the purposes of this section, "Oklahoma-based research entity" means
an institution of higher education or another nonprofit organization
that primarily provides research services, and which has its main
physical campus in this state. For the purposes of this section,
"research services" means research and development, technology
exploration, technical development, product dev elopment, and
commercialization intended to foster innovation in eligible small
businesses;
4. The research and development project for which matching
funds are provided must be conducted physically within the State of
Oklahoma, for the duration of the en gagement with the Oklahoma -based
research entity; and
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5. To be awarded matching funds under the Program , an Oklahoma-
based small business must file an applicatio n with the Department,
attesting to the total cost of the proj ect and demonstrating
available and unrestricted private capital t o meet at least fifty
percent (50%) of the total project cost. Matching funds may be used
only to purchase research services, as defined in this section, from
an Oklahoma-based research entity.
E. When administering the Program under this section, the
Department shall select eligible projects to qualify for matching
funds within the Research and Development Attraction Act based on
factors including, but not limited to:
1. The amount of private capital the matching funds will induce
to be spent in Oklahoma;
2. The total market size of the Oklahoma -based small
businesses' product or service offering;
3. Third-party validation of the Oklahoma -based small
businesses' intellectual assets, including but not limited to equity
raised from venture capital or private equity firms, federal
commercialization grants t hrough the Small Business Innovation
Research or Small Business Technology Trans fer programs, or
competitive federal research awards through National Institutes of
Health, National Science Foundation, Department of Defense,
Department of Energy, and others;
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4. The projected future job creation impact of the Oklahoma-
based small business for the state;
5. Other economic benefits to the state, including through
increased state and local revenues and growth in pr ivate investment;
6. The need of the Oklahoma-based small business to acquire
specialized services and resources in Oklahoma;
7. The alignment of the project within Oklahoma 's identified
cluster strategies; and
8. The impact on Oklahoma -based research entities, including
through increased revenue, exposure to new technologies, and
increased attraction opportunities for students, researchers, and
professional staff.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 5003.10h of Title 74, unless
there is created a duplication in numbering, reads as follows:
The Oklahoma Department of Commerce shall promulgate rules to
enforce the provisions of the Research and Development Attraction
Grants Program, including the following:
1. The application process for applying for matching funds;
2. The criteria to be used by the Department to evaluate
matching funds applications from Oklahoma -based small businesses,
and to determine the amount of the award; and
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3. The agreements that Oklahoma-based small businesses must
enter into, in regard to claiming matching funds and to ensur e
compliance in spending of matching funds.
SECTION 4. This act shall become effective November 1, 2022.
58-2-9869 MAH 01/16/22