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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
SENATE BILL 500 By: Boren
AS INTRODUCED
An Act relating to development incentives; ame nding
62 O.S. 2011, Section 861, which relates to the Local
Development Act; requiring collaboration with certain
Departments; requiring the Oklahoma Tax Co mmission to
publish annual report on tax increment
apportionments; spec ifying content of report; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAH OMA:
SECTION 1. AMENDATORY 62 O.S. 2011, Section 861, is
amended to read as follows:
Section 861. A. A project plan may contain a provision that
the increments from certain loca l taxes or fees may be used to
finance project cost s in areas qualified under the Local Development
Act. The increment from local taxes or fees levied from and after
the effective date of the approval of such plan shal l be apportioned
in the following man ner for a period not to exceed twenty -five (25)
fiscal years thereafter or the period required for payment of
project costs, whichever is less; provided, however, that for any
increment district established after Novemb er 1, 1992, such time
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period shall be tolled for a period of time equal to the pendency of
any litigation directly or indirectly challenging the inc rement
district or apportionment or disbursement:
1. That portion of the ad valorem taxes which are produce d by
the levy at the rate fixed each year by or for each such ad valorem
taxing entity upon the base assessed value of the increment district
determined pursuant to Section 862 of this title and as to an area
later added to the increment district, the effe ctive date of the
addition to the increment district, shall be paid to each taxing
entity and all or any portion of local sales taxes, other local
taxes or local fees collected each year which are not subject to
apportionment shall be paid or retained as o therwise provided by
law; and
2. All or any portion of:
a. ad valorem taxes, in excess of such amount specified
in paragraph 1 of this subsection,
b. the increment of local sales taxes, other local taxes
or local fees, or a combination thereof, paid to or
for the benefit of the city, town, o r county approving
the plan, and
c. with its consent, evidenced by agreement in writing,
the increment of local sales tax, other local taxes or
local fees, or combination thereof, payable to any
other local public taxin g entity,
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shall be apportioned to, an d when collected, shall be paid into an
apportionment fund established for the project pursuant to the
project plan. Such revenues shall be used for the payment of the
project costs and for the payment of the principal of, the interest
on, and any premiums due in connection with the bonds of, loans,
notes, or advances of money to, or indebtedness incurred to finan ce
project costs, whether funded, refunded, assumed, or otherwise, for
financing, in whole or in part, eligi ble project costs. For the
purposes of this section, “local sales tax” means amounts payable to
or for the benefit of a local governmental entity c alculated as a
percentage of gross sales whether imposed by ordinance, resolution,
covenant, or agreement. Nothing shall prohibit the increments from
being used to directly pay eligible project c osts. When all
eligible project costs and such bonds, loans , advances of money or
indebtedness, if any, including interest thereon and any premiums
due in connection with them, have been paid and the gove rning body
adopts an ordinance or resolution dissol ving the tax apportionment
financing, all ad valorem taxes u pon the taxable property within the
boundary of such district shall be paid into the funds of the
respective taxing entities.
B. If a project plan contains a provision for apportionment as
provided in subsection A of this section, and notwithstanding any
other provision of law to the contrary, the governing body shall
direct in the resolution or ordinance appro ving the plan which
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portion of the increments, including whether any or all, to be paid
into the apportionment fund shall constitute a part of the g eneral
fund to be appropriated annually by the governing body, and which
portion, including whether any or a ll, shall constitute funds of a
public entity authorized to issue tax apportionment bond s or notes
or to incur project costs.
C. To the extent that collections exceed project costs and the
provisions for payment of principal and interest along with
sufficient reserves on any bonds issued pur suant to the provisions
of Section 863 of this titl e, the excess shall be paid into the
funds of the respective taxing entities unless the taxing entity
agrees to some other use of such collections.
D. Except as provid ed in subsection E of this section, f or any
year in which taxes or fees are apportioned in the manner specified
in paragraph 2 of subsection A of th is section, any increase in
assessed valuation of taxable real property or taxable personal
property within the boundaries of such district in ex cess of the
base assessed value shall not be consid ered by any taxing entity in
computing any debt limitation o r for any other purpose except for
the levy of taxes and in determining the amount to be apportioned.
E. In the event there is a change in the a ssessment ratio for
ad valorem tax property valuati ons of property within the boundaries
of an increment distri ct, the portions of valuations for assessment
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pursuant to paragraphs 1 and 2 of subsection A of this section shall
be proportionately adjusted in accordance with such reassessment.
F. Nothing in this section shall be construed as relieving
property in such project area from being assessed as provided in the
Ad Valorem Tax Code of the Oklahoma Statutes, or as re lieving owners
of such property from paying a uniform rate of taxes, as required by
Section 5 of Article X of the Oklahoma Constitution.
G. Subject to constitutional exemptions, if property in an
increment district is owned by a public entity and is lease d to or
operated for a private use , including, without limitation, use by a
not-for-profit corporation or trust, the portion of the property so
leased or operated shall be assessed by the county assessor as if
such portion of the property were taxable, and , during the term of
the increment district, the public entity owning such property shal l
pay or require the user thereof to pay ad valorem taxes or an in
lieu ad valorem tax payment in an amount not less than the amount
that would have resulted if taxes h ad otherwise been levied on such
portion of the property. If property subject to ad val orem tax in
an increment district is acquired by a private n ot-for-profit
corporation or public or private trust, it shall continue to be
assessed and subject to ad val orem taxes or an in lieu ad valorem
payment by the user thereof until termination of the increment
district unless and only to the extent of the por tion of the
property and the use thereof that is:
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1. Acquired to implement the project plan;
2. Converted to a new tax-exempt use by a tax-exempt user; or
3. Entitled to claim a constitutional exemption notwithstanding
statutory provisions.
During the period of an increment district, such nonexempt uses and
interests are severable for purposes of ad valorem a nd in lieu of ad
valorem assessment a nd payments, notwithstanding any statutory
provisions to the contrary.
H. The Oklahoma Tax Commission shall , in collaboration with the
State Department of Edu cation and the Oklahoma Department of
Commerce, create and publish a report by March 31 of each year
documenting the amount of increments of local taxes and fees
apportioned pursuant to the provisions of this section in the
previous calendar year. The report shall include an estimate of the
economic impact and an estimate of the amount funds benefiting
public schools were decreased as a result of the apportionments
provided pursuant to the provisions of this section .
SECTION 2. This act shall become effective November 1, 2021.
58-1-1275 QD 1/20/2021 8:01:12 AM