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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
ENGROSSED SENATE
BILL NO. 71 By: Bergstrom of the Senate
and
McDugle of the House
An Act relating to the Oklahoma Local Development and
Enterprise Zone Incentive Leverage Act; amending 62
O.S. 2011, Sections 842, as last amended by Section
1, Chapter 69, O.S.L. 2020 and 847 (62 O.S. Supp.
2020, Section 842), which relate to program
administration; modifying required content of
specified rules promulgated by Oklahoma Department of
Commerce; deleting obsolete reference; requiring
certain information be included in specified Oklahoma
Tax Commission report; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2011, Section 842, as last
amended by Section 1, Chapter 69, O.S.L. 2020 (62 O.S. Supp. 2020,
Section 842), is amended to read as follows:
Section 842. A. An enterprise which locates its facility
within an enterprise zone or which expands its existing facility
after the designation of an enterprise zone as authorized by law and
which is located in an incentive district as authorized pursuant to
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the provisions of the Local Development Act shall be eli gible for
the state local enterprise matching payment authorized pursuant to
subsection A of Section 844 of this title.
B. 1. A local governmental entity which approves a project
plan pursuant to the provisions of the Local Development Act within
an enterprise zone or in support of a major tourism destination
project which the local governmental entity determines is likely to
significantly benefit contiguous or nearby enterprise zone census
tracts shall be eligible for the state local government matching
payment authorized pursuant to subsection D of Section 844 of this
title; provided, no state local government matching payment shall be
made for project costs in relation to:
a. any gambling establishment, or
b. any development within a project plan that p rovides
for more than fifty percent (50%) of the net leasable
space of such development to be used for retail
purposes except for such portions of a development
which includes grocery or specialty food store
enterprises defined under NAICS Manual Industry Group
No. 4451 or 4452 that provide healthy nutrition
options including fresh fruits, vegetables, whole
grains, seeds, nuts and healthy protein and that
improve access within one -half (1/2) mile of any low
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income and low access geographies identified by th e
United States Department of Agriculture.
State local government matching payments shall not be used to
supplant local revenue currently being expended within the increment
district boundaries.
2. In order to be eligible for state local government matchi ng
payments for approving a project within an enterprise zone, a local
governmental entity shall provide to the Oklahoma Department of
Commerce as part of the application provided for in subsection J of
this section:
a. an estimate of incremental revenues likely to be
derived from the project, and
b. certification that all projects described within the
related project plan will generate, in the aggregate,
a minimum of either One Million Dollars
($1,000,000.00) in payroll, exclusive of payroll for
construction, or Five Million Dollars ($5,000,000.00)
in investment.
3. In order to be eligible for state local government matching
payments in support of a major tourism destination project, a local
governmental entity shall provide to the Oklahoma Department of
Commerce as part of the application provided for in subsection J of
this section:
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a. an estimate of incremental revenues new to the state
likely to be derived from the project,
b. certification that the major tourism destination meets
the applicable criteri a described in paragraph 12 of
Section 841 of this title, and
c. an agreement to provide payment to the Oklahoma
Department of Commerce to defray the costs of the
study required by paragraph 4 of this subsection.
4. To determine if a project qualifies as a major tourism
destination project pursuant to subparagraph b of paragraph 12 of
Section 841 of this title and to assist in other required
determinations, the Oklahoma Department of Commerce shall cause a
market and feasibility study to be conducted by an independent
consultant with experience in the conduct of such studies. Upon
review of the feasibility report, the Oklahoma Department of
Commerce shall make its finding as to the reasonable probability
that the proposed project is a major tourism destina tion project as
provided in subparagraph b of paragraph 12 of Section 841 of this
title.
C. For purposes of the Oklahoma Local Development and
Enterprise Zone Incentive Leverage Act, an enterprise engaged in a
retail activity, where otherwise prohibited b y the Oklahoma
Enterprise Zone Act for purposes of the benefits and incentives
extended pursuant to the Oklahoma Enterprise Zone Act, shall be
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considered an eligible enterprise for purposes of the state local
enterprise matching payment authorized by the O klahoma Local
Development and Enterprise Zone Incentive Leverage Act.
D. The maximum amount of state local enterprise matching
payments for an enterprise per fiscal year shall not exceed Two
Hundred Thousand Dollars ($200,000.00).
E. Except as provided i n subsection H of this section, for
purposes of the Oklahoma Local Development and Enterprise Zone
Incentive Leverage Act, the maximum amount of aggregate investment
in all qualifying facilities located in any single county which can
qualify for a state lo cal enterprise matching payment pursuant to
subsection A of Section 844 of this title shall be computed for each
county of the state by multiplying Two Hundred Dollars ($200.00)
times the population of the county according to the most recent
estimate provided by the United States Bureau of the Census prior to
the date an application is made.
F. The computation required by subsection E of this section
shall be the maximum amount of aggregated investment qualifying for
the purposes of all enterprises for the duration of the Oklahoma
Local Development and Enterprise Zone Incentive Leverage Act.
G. The aggregate investment limit for all facilities located
within a county which may qualify for the state local enterprise
matching payments pursuant to subsection A of Section 844 of this
title shall:
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1. Not be less than Twenty Million Dollars ($20,000,000.00) for
counties with a population of less than one hundred thousand
(100,000) persons; and
2. Not be greater than Forty Million Dollars ($40,000,000.00)
for all other counties of the state.
H. The aggregate limit for all state local government matching
payments made to any public entity on behalf of any local
governmental entity within a single county pursuant to subsection D
of Section 844 of this title for th e duration of the Oklahoma Local
Development and Enterprise Zone Incentive Leverage Act shall be an
amount equal to the net benefit rate multiplied by the taxable gross
sales derived from the project over the period of apportionment of
local sales taxes, a s certified by the Secretary of Commerce.
I. The payments authorized by Section 844 of this title shall
be available for business and governmental entities qualifying
pursuant to the Local Development Act for investments made within an
incentive district or for improvements made within an increment
district prior to December 31, 2007, or for which an incentive
district or an increment district has been created prior to December
31, 2028, if the investments or improvements are begun not later
than December 31, 2029.
J. The Oklahoma Department of Commerce shall promulgate rules
to establish for administration of the Oklahoma Local Development
and Enterprise Zone Incentive Leverage Act. Such rules shall:
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1. Include a procedure for an enterprise or local gov ernmental
entity to make application for state local enterprise and state
local government matching payments pursuant to this section . Such
rules shall reflect;
2. Reflect the intent that the Oklahoma Local Development and
Enterprise Zone Incentive Lever age Act be fiscally neutral to the
state; and
3. Establish reporting requirements for successful applicants
which allow data collection and analysis by the Department on
employment, capital investment, changes in assessed value of a
project and other impa cts resulting from payments and reporting of
such data by the Department to the Oklahoma Tax Commission for the
purposes of subsection B of Section 847 of this title .
SECTION 2. AMENDATORY 62 O.S. 2011, Section 847, is
amended to read as follows:
Section 847. A. The Oklahoma Tax Commission shall maintain a
record of state local enterprise matching payments and state local
government matching payments made pursuant to Section 844 of this
title and a record of income tax credits cl aimed pursuant to Section
2357.81 of Title 68 of the Oklahoma Statutes . Local sales taxes
apportioned under the applicable project plan shall be reported,
collected, remitted, and disbursed in the same manner as other local
sales taxes under Title 68 of t he Oklahoma Statutes.
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B. The Tax Commission shall prepare a report separately
identifying the amounts described in subsection A of this section
and data collection and analysis prepared by the Oklahoma Department
of Commerce pursuant to subsection J of Se ction 842 of this title .
The Commission shall submit the report prior to April 1 each year to
the Governor, the Speaker of the House of Representatives and the
President Pro Tempore of the Senate.
SECTION 3. This act shall become effectiv e November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE, dated
04/07/2021 - DO PASS.