OK
Oklahoma Senate Bill SB500

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB500 Compare Versions

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4-
5-An Act
6-ENROLLED SENATE
7-BILL NO. 500 By: Boren of the Senate
28+ENGROSSED HOUSE AMENDME NT
29+ TO
30+ENGROSSED SENATE BILL NO . 500 By: Boren of the Senate
831
932 and
1033
1134 Lowe (Dick) of the House
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1740 An Act relating to development incentives; amending
41+62 O.S. 2011, Section 861, which relates to the Local
42+Development Act; requiri ng collaboration with certain
43+Departments; requiring the Oklahoma Tax Commission to
44+publish annual report on tax increment
45+apportionments; specifying content of report; and
46+providing an effective date.
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50+AMENDMENT NO. 1. Delete the title, enacting clause and entire bill
51+and replace with:
52+
53+
54+"An Act relating to development incentives; amending
1855 62 O.S. 2011, Sections 860 and 861, which relate to
1956 the Local Development Act; requiring the
2057 municipalities and counties to publish annual report
2158 on tax increment and incentive financing districts;
2259 specifying content of report; and providing an
2360 effective date.
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29-SUBJECT: Tax incentive finance district
30-
3166 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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3367 SECTION 1. AMENDATORY 62 O.S. 2011, Section 860, is
3468 amended to read as follows :
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3669 Section 860. A. A project plan may contain a provision that
3770 certain local taxes may be subject to incentives or may be exempted
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3897 in reinvestment areas, historic preservation areas or enterprise
3998 areas.
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4199 B. The governing body may grant incentives or exemp tions from
42100 local taxation only on the new investment made. No ad valorem tax
43101 incentives or exemptions may be granted on the value of property
44102 which has been assessed or which is subject to assessment prior to
45103 the adoption of the project plan. No ad valor em tax incentives or
46104 exemptions authorized in this section may be granted for retail
47105 establishments. If a retail establishment is located in property
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50106 which otherwise qualifies for an incentive or exemption pursuant to
51107 this section, the incentive or exempt ion shall not be allowed for
52108 that portion of the property used for such retail establishment. As
53109 used in this subsection, "retail establishment" shall not include an
54110 establishment that provides lodging, including but not limited to a
55111 hotel, apartment hote l, public rooming house or motel. No ad
56112 valorem tax incentives or exemptions authorized in this section may
57113 be granted if the property is located in an increment district or as
58114 long as the property is subject to the ad valorem tax exemption for
59115 new or expanding manufacturing facilities as authorized by Section
60116 6B of Article X of the Oklahoma Constitution. In the event of
61117 disposition by lease or sublease to a lessee not entitled to an ad
62118 valorem tax exemption, the improvements placed thereon shall not be
63119 entitled to an ad valorem tax exemption provided for in Section 850
64120 et seq. of this title. The incentives or exemptions, which may be
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65147 full or partial, may be granted for a period not to exceed five (5)
66148 years; however, in enterprise zones incentives or exem ptions may be
67149 granted for a period not to exceed six (6) years.
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69150 C. No incentives or exemptions may be granted to any business
70151 or firm that is relocating from within the state and is subject to
71152 or in the process of recruitment by two or more governmental
72153 entities within the state unless the governmental entity in which
73154 the business or firm does not locate adopts a resolution giving
74155 their approval to the granting of incentives or exemptions to the
75156 business or firm locating in the competing governmental entit y. No
76157 incentives or exemptions may be granted to an out -of-state business
77158 or firm that is subject to or in the process of recruitment by two
78159 or more governmental entities within the state except as otherwise
79160 provided for in this subsection. The prohibiti on against incentives
80161 or exemptions to a business or firm relocating within the state may
81162 be waived upon application by the governing body to, and approval
82163 of, the Director of the Oklahoma Department of Commerce. In order
83164 for the Director to approve the w aiver, the Director must find that
84165 the incentives or exemptions are necessary and sufficient to attract
85166 the business or firm and that the benefits generated by the business
86167 location outweigh the costs of the business location.
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88168 D. A project plan may contai n a provision that ad valorem taxes
89169 may be exempted in a commercial historic preservation area that is
90170 adjacent to and serves designated historical residential areas for
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91197 neighborhood commercial preservation purposes in order for the
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94198 neighborhood to retain its basic character and scale. No ad valorem
95199 tax exemption may be granted on the value of property which has been
96200 assessed or which is subject to assessment prior to the adoption of
97201 the project plan. No ad valorem tax exemption shall be granted
98202 pursuant to the provisions of this subsection for single -family
99203 residences. The governing body may grant the exemption only on the
100204 increase in value of the property. The exemptions may be granted
101205 for a specific period of time as determined by a written agreement
102206 between the property owners of the area and the governing body and
103207 may be renewed. Uses of the property eligible for this exemption
104208 may include but not be limited to commercial, office or multifamily
105209 residential use.
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107210 E. The governing body of a city, town or county of this state
108211 shall prepare a disclosure report for any tax incentives financing
109212 district established by the governing body if the district has been
110213 in operation for at least twelve (12) months. Beginning January 1,
111214 2022, and for each year ther eafter, the disclosu re report shall be
112215 published on or before sixty (60) business days, excluding
113216 recognized federal holidays, following the end of each fiscal year
114217 on the website of the city, town or county if such a website exists.
115218 Copies of the report shall be made available to any requesting
116219 member of the public. The disclosure report shall include the
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117246 following information for the prior fiscal year preceding the fiscal
118247 year the report is due:
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120248 1. The parties receiving incentives or exemptions;
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122249 2. A general description of the property and the improvements
123250 to be made;
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125251 3. The portion and fair market value of the property to be
126252 exempted or that portion of the local taxes to be subject to
127253 incentives or to be exempted;
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129254 4. The duration of t he incentives or exemptions;
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131255 5. Any additional information necessary to demonstrate
132256 compliance with the tax incentives or exemptions;
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134257 6. The name of the person who is currently in charge of the
135258 implementation of the plan; and
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139259 7. The names of the persons who have discl osed an interest as
140260 required pursuant to Section 857 of this title and the interest
141261 disclosed.
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143262 SECTION 2. AMENDATORY 62 O.S. 2011, Section 861, is
144263 amended to read as follows:
145-
146264 Section 861. A. A project plan may contain a provisio n that
147265 the increments from certain local taxes or fees may be used to
148266 finance project costs in areas qualified under the Local Development
149267 Act. The increment from local taxes or fees levied from and after
150268 the effective date of the approval of such plan sh all be apportioned
151269 in the following manner for a period not to exceed twenty -five (25)
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152296 fiscal years thereafter or the period required for payment of
153297 project costs, whichever is less; provided, however, that for any
154298 increment district established after Nove mber 1, 1992, such time
155299 period shall be tolled for a period of time equal to the pendency of
156300 any litigation directly or indirectly challenging the increment
157301 district or apportionment or disbursement:
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159302 1. That portion of the ad valorem taxes which are produ ced by
160303 the levy at the rate fixed each year by or for each such ad valorem
161304 taxing entity upon the base assessed value of the increment district
162305 determined pursuant to Section 862 of this title and as to an area
163306 later added to the increment district, the ef fective date of the
164307 addition to the increment district, shall be paid to each taxing
165308 entity and all or any portion of local sales taxes, other local
166309 taxes or local fees collected each year which are not subject to
167310 apportionment shall be paid or retained as otherwise provided by
168311 law; and
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170312 2. All or any portion of:
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172313 a. ad valorem taxes, in excess of such amount specified
173314 in paragraph 1 of this subsection,
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175315 b. the increment of local sales taxes, other local taxes
176316 or local fees, or a combination thereof, paid to or
177317 for the benefit of the city, town, or county approving
178318 the plan, and
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182345 c. with its consent, evidenced by agreement in writing,
183346 the increment of local sales tax, other local taxes or
184347 local fees, or combination thereof, payable to any
185348 other local public tax ing entity,
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187349 shall be apportioned to, and when collected, shall be paid into an
188350 apportionment fund established for the project pursuant to the
189351 project plan. Such revenues shall be used for the payment of the
190352 project costs and for the payment of the princip al of, the interest
191353 on, and any premiums due in connection with the bonds of, loans,
192354 notes, or advances of money to, or indebtedness incurred to finance
193355 project costs, whether funded, refunded, assumed, or otherwise, for
194356 financing, in whole or in part, eli gible project costs. For the
195357 purposes of this section, "local sales tax" means amounts payable to
196358 or for the benefit of a local governmental entity calculated as a
197359 percentage of gross sales whether imposed by ordinance, resolution,
198360 covenant, or agreement. Nothing shall prohibit the increments from
199361 being used to directly pay eligible project costs. When all
200362 eligible project costs and such bonds, loans, advances of money or
201363 indebtedness, if any, including interest thereon and any premiums
202364 due in connection with them, have been paid and the governing body
203365 adopts an ordinance or resolution dissolving the tax apportionment
204366 financing, all ad valorem taxes upon the taxable property within the
205367 boundary of such district shall be paid into the funds of the
206368 respective taxing entities.
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208395 B. If a project plan contains a provision for apportionment as
209396 provided in subsection A of this section, and notwithstanding any
210397 other provision of law to the contrary, the governing body shall
211398 direct in the resolution or ordinance app roving the plan which
212399 portion of the increments, including whether any or all, to be paid
213400 into the apportionment fund shall constitute a part of the general
214401 fund to be appropriated annually by the governing body, and which
215402 portion, including whether any or all, shall constitute funds of a
216403 public entity authorized to issue tax apportionment bonds or notes
217404 or to incur project costs.
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219405 C. To the extent that collections exceed project costs and the
220406 provisions for payment of principal and interest along with
221407 sufficient reserves on any bonds issued pursuant to the provisions
222408 of Section 863 of this title, the excess shall be paid into the
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225409 funds of the respective taxing entities unless the taxing entity
226410 agrees to some other use of such collections.
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228411 D. Except as provided in subsection E of this section, for any
229412 year in which taxes or fees are apportioned in the manner specified
230413 in paragraph 2 of subsection A of this section, any increase in
231414 assessed valuation of taxable real property or taxable personal
232415 property within the boundaries of such district in excess of the
233416 base assessed value shall not be considered by any taxing entity in
234417 computing any debt limitation or for any other purpose except for
235418 the levy of taxes and in determining the amount to be apportioned.
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237445 E. In the event there is a change in the assessment ratio for
238446 ad valorem tax property valuations of property within the boundaries
239447 of an increment district, the portions of valuations for assessment
240448 pursuant to paragraphs 1 and 2 of subsection A of this secti on shall
241449 be proportionately adjusted in accordance with such reassessment.
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243450 F. Nothing in this section shall be construed as relieving
244451 property in such project area from being assessed as provided in the
245452 Ad Valorem Tax Code of the Oklahoma Statutes, or as relieving owners
246453 of such property from paying a uniform rate of taxes, as required by
247454 Section 5 of Article X of the Oklahoma Constitution.
455+G. Subject to constitutional exemptions, if property in an
456+increment district is owned by a public entity and is lea sed to or
457+operated for a private use, including, without limitation, use by a
458+not-for-profit corporation or trust, the portion of the property so
459+leased or operated shall be assessed by the county assessor as if
460+such portion of the property were taxable, a nd, during the term of
461+the increment district, the public entity owning such property shall
462+pay or require the user thereof to pay ad valorem taxes or an in
463+lieu ad valorem tax payment in an amount not less than the amount
464+that would have resulted if taxes had otherwise been levied on such
465+portion of the property. If property subject to ad valorem tax in
466+an increment district is acquired by a private not -for-profit
467+corporation or public or private trust, it shall continue to be
468+assessed and subject to ad v alorem taxes or an in lieu ad valorem
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495+payment by the user thereof until termination of the increment
496+district unless and only to the extent of the portion of the
497+property and the use thereof that is:
498+1. Acquired to implement the project plan;
499+2. Converted to a new tax-exempt use by a tax-exempt user; or
500+3. Entitled to claim a constitutional exemption notwithstanding
501+statutory provisions.
502+During the period of an increment district, such nonexempt uses and
503+interests are severable for purposes of ad valorem and in lieu of ad
504+valorem assessment and payments, notwithstanding any statutory
505+provisions to the contrary.
506+H. The governing body of a city, town or county of this state
507+shall prepare a disclosure report for any tax increment financing
508+district established by the governing body if the district has been
509+in operation for at least twelve (12) months. Beginning January 1,
510+2022, and for each year thereafter, the disclosu re report shall be
511+published on or before sixty (60) business days, excluding
512+recognized federal holidays, following the end of each fiscal year
513+on the website of the city, town or county if such a website exists.
514+Copies of the report shall be made available to any requesting
515+member of the public. The disclosure report shall include the
516+following information for the prior fiscal year preceding the fiscal
517+year the report is due:
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544+1. The amount and source of revenue captured and apportioned
545+pursuant to the project plan;
546+2. The amount and purpose of expenditures;
547+3. The amount of principal and interest due on outstanding
548+bonded indebtedness;
549+4. The tax increment base and current captured appraised value
550+or the other local tax or fee collections retained by the area;
551+5. The captured appraised value or the other local tax or fee
552+collections shared by the city, town or county and other taxing
553+entities, the total amount of tax increments received and any
554+additional information necessary to demonstrate compliance with the
555+plan adopted by the city, town or county;
556+6. The name of the person who is c urrently in charge of the
557+implementation of the plan; and
558+7. The names of the persons who have disclosed an interest as
559+required pursuant to Section 857 of this title and the interest
560+disclosed.
561+SECTION 3. This act shall become effective November 1, 2021."
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588+Passed the House of Representatives the 21st day of April, 2021.
589+
590+
591+
592+
593+
594+Presiding Officer of the House of
595+ Representatives
596+
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598+Passed the Senate the ____ day of __________, 2021.
599+
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603+
604+Presiding Officer of the Senate
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632+ENGROSSED SENATE
633+BILL NO. 500 By: Boren of the Senate
634+
635+ and
636+
637+ Lowe (Dick) of the House
638+
639+
640+
641+
642+
643+
644+An Act relating to development incentives; amending
645+62 O.S. 2011, Section 861, which relates to the Local
646+Development Act; requiring collaboration with certain
647+Departments; requirin g the Oklahoma Tax Commission to
648+publish annual report on tax increment
649+apportionments; specifying content of report; and
650+providing an effective date.
651+
652+
653+
654+
655+
656+BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
657+SECTION 4. AMENDATORY 62 O.S. 2011, Section 861, is
658+amended to read as follows:
659+Section 861. A. A project plan may contain a provision that
660+the increments from certain local taxes or fees may be used to
661+finance project costs in areas qualified under the Local Development
662+Act. The increment from local taxes or fees levied from and after
663+the effective date of the approval of such plan shall be apportioned
664+in the following manner for a period not to exceed twenty -five (25)
665+fiscal years thereafter or the period required for pay ment of
666+project costs, whichever is less; provided, however, that for any
667+increment district established after November 1, 1992, such time
668+
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694+period shall be tolled for a period of time equal to the pendency of
695+any litigation directly or indirectly challengin g the increment
696+district or apportionment or disbursement:
697+1. That portion of the ad valorem taxes which are produced by
698+the levy at the rate fixed each year by or for each such ad valorem
699+taxing entity upon the base assessed value of the increment distri ct
700+determined pursuant to Section 862 of this title and as to an area
701+later added to the increment district, the effective date of the
702+addition to the increment district, shall be paid to each taxing
703+entity and all or any portion of local sales taxes, othe r local
704+taxes or local fees collected each year which are not subject to
705+apportionment shall be paid or retained as otherwise provided by
706+law; and
707+2. All or any portion of:
708+a. ad valorem taxes, in excess of such amount specified
709+in paragraph 1 of this sub section,
710+b. the increment of local sales taxes, other local taxes
711+or local fees, or a combination thereof, paid to or
712+for the benefit of the city, town, or county approving
713+the plan, and
714+c. with its consent, evidenced by agreement in writing,
715+the increment of local sales tax, other local taxes or
716+local fees, or combination thereof, payable to any
717+other local public taxing entity,
718+
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744+shall be apportioned to, and when collected, shall be paid into an
745+apportionment fund established for the project pursuant to the
746+project plan. Such revenues shall be used for the payment of the
747+project costs and for the payment of the principal of, the interest
748+on, and any premiums due in connection with the bonds of, loans,
749+notes, or advances of money to, or indebtedness incurred to finance
750+project costs, whether funded, refunded, assumed, or otherwise, for
751+financing, in whole or in part, eligible project costs. For the
752+purposes of this section, “local sales tax” means amounts payable to
753+or for the benefit of a local governmental entity calculated as a
754+percentage of gross sales whether imposed by ordinance, resolution,
755+covenant, or agreement. Nothing shall prohibit the increments from
756+being used to directly pay eligible project costs. When all
757+eligible project costs and such bon ds, loans, advances of money or
758+indebtedness, if any, including interest thereon and any premiums
759+due in connection with them, have been paid and the governing body
760+adopts an ordinance or resolution dissolving the tax apportionment
761+financing, all ad valore m taxes upon the taxable property within the
762+boundary of such district shall be paid into the funds of the
763+respective taxing entities.
764+B. If a project plan contains a provision for apportionment as
765+provided in subsection A of this section, and notwithstan ding any
766+other provision of law to the contrary, the governing body shall
767+direct in the resolution or ordinance approving the plan which
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794+portion of the increments, including whether any or all, to be paid
795+into the apportionment fund shall constitute a part of the general
796+fund to be appropriated annually by the governing body, and which
797+portion, including whether any or all, shall constitute funds of a
798+public entity authorized to issue tax apportionment bonds or notes
799+or to incur project costs.
800+C. To the extent that collections exceed project costs and the
801+provisions for payment of principal and interest along with
802+sufficient reserves on any bonds issued pursuant to the provisions
803+of Section 863 of this title, the excess shall be paid into the
804+funds of the respective taxing entities unless the taxing entity
805+agrees to some other use of such collections.
806+D. Except as provided in subsection E of this section, for any
807+year in which taxes or fees are apportioned in the manner specified
808+in paragraph 2 of subsectio n A of this section, any increase in
809+assessed valuation of taxable real property or taxable personal
810+property within the boundaries of such district in excess of the
811+base assessed value shall not be considered by any taxing entity in
812+computing any debt lim itation or for any other purpose except for
813+the levy of taxes and in determining the amount to be apportioned.
814+E. In the event there is a change in the assessment ratio for
815+ad valorem tax property valuations of property within the boundaries
816+of an increment district, the portions of valuations for assessment
817+
818+ENGR. S. B. NO. 500 Page 5 1
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843+pursuant to paragraphs 1 and 2 of subsection A of this section shall
844+be proportionately adjusted in accordance with such reassessment.
845+F. Nothing in this section shall be construed as relieving
846+property in such project area from being assessed as provided in the
847+Ad Valorem Tax Code of the Oklahoma Statutes, or as relieving owners
848+of such property from paying a uniform rate of taxes, as required by
849+Section 5 of Article X of the Oklahoma Constitution.
249850 G. Subject to constitutional exemptions, if property in an
250851 increment district is owned by a public entity and is leased to or
251852 operated for a private use, including, without limitation, use by a
252853 not-for-profit corporation or trust, the portion of the propert y so
253854 leased or operated shall be assessed by the county assessor as if
254855 such portion of the property were taxable, and, during the term of
255856 the increment district, the public entity owning such property shall
256857 pay or require the user thereof to pay ad valorem taxes or an in
257858 lieu ad valorem tax payment in an amount not less than the amount
258859 that would have resulted if taxes had otherwise been levied on such
259860 portion of the property. If property subject to ad valorem tax in
260861 an increment district is acquired by a private not-for-profit
261862 corporation or public or private trust, it shall continue to be
262863 assessed and subject to ad valorem taxes or an in lieu ad valorem
263864 payment by the user thereof until termination of the increment
264865 district unless and only to the extent o f the portion of the
265866 property and the use thereof that is:
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269893 1. Acquired to implement the project plan;
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271894 2. Converted to a new tax -exempt use by a tax-exempt user; or
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273895 3. Entitled to claim a constitutional exemption notwithstanding
274896 statutory provisions.
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276897 During the period of an increment district, such nonexempt uses and
277898 interests are severable for purposes of ad valorem and in lieu of ad
278899 valorem assessment and payments, notwithstanding any statutory
279900 provisions to the contrary.
901+H. The Oklahoma Tax Commission shall, in collaboration with the
902+State Department of Education, State Board of Career and Technology
903+Education and the Oklahoma Department of Commerce, create and
904+publish a report by March 31 of each year documenting the amount of
905+increments of local taxe s and fees apportioned pursuant to the
906+provisions of this section in the previous calendar year. The
907+report shall include an estimate of the economic impact and an
908+estimate of the amount funds benefiting public schools were
909+decreased as a result of the ap portionments provided pursuant to the
910+provisions of this section.
911+SECTION 5. This act shall become effective November 1, 2021.
280912
281-H. The governing body of a city, town or county of this state
282-shall prepare a disclosure report for any tax increment financing
283-district established by the governing body if the district has been
284-in operation for at least twelve (12) months. Beginning January 1,
285-2022, and for each year thereafter, the disclosu re report shall be
286-published on or before sixty (60) business days, excluding
287-recognized federal holidays, following the end of each fiscal year
288-on the website of the city, town or county if such a website exists.
289-Copies of the report shall be made available to any requesting
290-member of the public. The disclosure report shall include the
291-following information for the prior fiscal year preceding the fiscal
292-year the report is due:
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294-1. The amount and source of revenue captured and apportioned
295-pursuant to the project plan;
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297-2. The amount and purpose of expenditures;
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299-3. The amount of principal and interest due on outstanding
300-bonded indebtedness;
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302-4. The tax increment base and current captured apprai sed value
303-or the other local tax or fee collections retained by the area;
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305-5. The captured appraised value or the other local tax or fee
306-collections shared by the city, town or county and other taxing
307-entities, the total amount of tax increments received and any
308-additional information necessary to demonstrate compliance with the
309-plan adopted by the city, town or county;
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313-6. The name of the person who is c urrently in charge of the
314-implementation of the plan; and
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316-7. The names of the persons who have discl osed an interest as
317-required pursuant to Section 857 of this title and the interest
318-disclosed.
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320-SECTION 3. This act shall become effective November 1, 2021.
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323-ENR. S. B. NO. 500 Page 9
324-Passed the Senate the 29th day of April, 2021.
938+Passed the Senate the 8th day of March, 2021.
325939
326940
327941
328942 Presiding Officer of the Senate
329943
330944
331-Passed the House of Representatives the 21st day of April, 2021.
945+Passed the House of Represe ntatives the ____ day of __________,
946+2021.
332947
333948
334949
335950 Presiding Officer of the House
336951 of Representatives
337952
338-OFFICE OF THE GOVERNOR
339-Received by the Office of the Governor this _______ _____________
340-day of _________________ __, 20_______, at _______ o'clock _______ M.
341-By: _______________________________ __
342-Approved by the Governor of the State of Oklahoma this _____ ____
343-day of _________________ __, 20_______, at _______ o'clock _______ M.
344953
345- _________________________________
346- Governor of the State of Oklahoma
347-
348-
349-OFFICE OF THE SECRETARY OF STATE
350-Received by the Office of the Secretary of State this _______ ___
351-day of __________________, 20 _______, at _______ o'clock _______ M.
352-By: _______________________________ __