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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1715 By: Leewright
AS INTRODUCED
An Act relating to income tax credit; crea ting the
Strategic Industrial Development Enhancement Tax
Credit Act; defining terms; provi ding credit for
certain qualified expenditures for certain tax yea rs;
requiring the Oklahoma Department of Commerce to
determine qualifying expenditures; authorizing
sponsor to apply for credit; r equiring the Department
to provide form; providing requireme nts for the
application; requiring the Department to review and
make determination; authorizing the Department to
allocate credit; requiring the Department to noti fy
the Oklahoma Tax Commission under certain
circumstance; limiting allocation of credit for
qualifying project and certain expenditures; limiting
allocation of credit in taxable year; requiring
certain projects be eligible for credit in subsequent
tax year; allowing unused credits to be carried over
for certain time; providing for transfer of cre dit to
certain entities; prohibiting credit to be used to
reduce tax liability to less than zero; requiring the
Department to promulgate rules; providing for
codification; and providing an effecti ve date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2357.69 of Title 68, unless
there is created a duplication in numb ering, reads as follows:
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A. This act shall be known and may be cited as the “Strategic
Industrial Development Enhancement Tax Credit Act ”.
B. As used in this section:
1. “Department” means the Oklahoma Department of Commerce;
2. “Eligible entity” means a limited liability company,
partnership, or corporation located in this state with a qualifying
project in a qualifying project location;
3. “Project sponsor” means a local economic development
organization or authority exempt from taxation pursuant to t he
provisions of the Internal Revenue Code, 26 U.S.C., Section 501(c),
port authority, industrial park, or Class II or III railroad
carriers as defined in 49 CFR , Part 1201.1-1;
4. “Qualifying economic development expenditure ” means an
expenditure for land improvements, building construction, building
improvements and expansion, port termin al improvements, and the
purchase of machinery and equipment ;
5. “Qualifying initial infrastructure expenditure” means an
expenditure for new railroad infrastructure or improvements to
existing railroad infrastructure, that includes the acquisition of
right of way, project engineering, construction of new railroad
including but not limited to tra cks, leads, switches, spurs, and
sidings, loading dock improvements, and tra nsloading structures
involved with providing freight rail service;
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6. “Qualifying project” means the new construction or expansion
of an eligible entity or a development generating qualified initial
infrastructure expenditures to serve an eligible entity in a
qualifying project location; and
7. “Qualifying project location” means a project located in an
industrial park, economic development zone, or port located within a
county in this state with a population of less than one hundred
thousand (100,000) or a project located adjacent to a terminal or
switching railroad or Class II or III railroad .
C. For tax years 2023 through 2027, there shall be allowed a
credit for an eligible entity against the tax imposed by Section
2355 of Title 68 of the Oklahoma Statut es, equal to an amount not to
exceed ten percent (10%) o f an eligible entity ’s qualified economic
development expenditures or fifty percent (50%) of an eligible
entity’s qualified initial infrastructure expenditures , subject to
the determination and allocation by the Department. Credits awarded
pursuant to this subsection shall be allocated over a three -year
period in equal amounts.
D. A project sponsor may apply to the Department for a
qualifying project of an eligible entity using an application form
provided by the Department. The application form shall re quire a
description of the quali fying project, the project location, an
itemized list of project costs, and a summary of the expected net
economic benefit and job creation.
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E. The Department shall review the application and make a
determination of the amount of qualified economic development
expenditures and qualified initial infrastructure expenditures that
qualify for tax credit. Tax credits may be allocated by the
Department for qualified economic development expenditures and
qualified initial infrastructure expenditures of a qualifying
project. The Department shall notify the Oklahoma Tax Commission
when an eligible entity has been allocated tax credit.
F. Total credits allocated for a qualifying project shall not
exceed Six Million Dollars ( $6,000,000.00). Total credit allocated
for a qualifying project shall not exceed Six Million Dollars
($6,000,000.00) for qualified economic development expenditures and
Three Million Dollars ( $3,000,000.00) for qualified initial
infrastructure expenditures.
G. Credits allocated by the Departme nt shall not exceed Twelve
Million Dollars ($12,000,000.00) in a tax year. Qualifying projects
that have submitted an application and are not allocated all or part
of credit for qualified economic development expenditures o r
qualified initial infrastructure expenditures due to the tax year
limit shall be eligible for credit in subsequent tax years.
H. Any credits allowed but not used in any taxable year may be
carried over in order to each of the five (5) subsequent tax years.
Credits shall be transfer rable to a customer, vendor, project
investor, or partner of a n eligible entity. Credits shall not be
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used to reduce the tax liability of the taxpayer to les s than zero
(0).
I. The Department shall promulgate rules to implement the
provisions of this act.
SECTION 2. This act shall become effective July 1, 2023.
58-2-2503 QD 1/20/2022 5:57:26 PM