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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
ENGROSSED SENATE
BILL NO. 739 By: Leewright and Hall of the
Senate
and
Bashore of the House
An Act relating to the sales tax credit; amending
Section 3, Chapter 196, O.S.L. 2017, as amended by
Section 1, Chapter 443, O.S.L. 2019, Section 4,
Chapter 196, O.S.L. 2017, as amended by Section 2,
Chapter 443, O.S.L. 2019, Section 5, Chapter 196,
O.S.L. 2017, as amended by Section 3, Chapter 443,
O.S.L. 2019, Section 6, Chapter 196, O.S.L. 2017, as
amended by Section 4, Chapter 443, O.S.L. 2019 and
Section 7, Chapter 196, O.S.L. 2017, as amended by
Section 5, Chapter 443, O.S.L. 2019 (68 O.S. Supp.
2020, Sections 2393, 2394, 2395, 2396 and 2397),
which relate to the Oklahoma Tourism Development Act ;
modifying definitions; transferring powers and duties
from the Executive Director of the Oklahoma Tourism
and Recreation Department to the Executive Director
of the Oklahoma Department of Commerce; requiri ng
certain company to hire consulting firm; providing
exception upon request of company; authorizing the
Executive Director of the Oklahoma Department of
Commerce to allow a company to hire the Department to
produce report; requiring certain costs to be
established by promulgation of rules; establishing
minimum fee; clarifying circumstances for payment of
fee; requiring deposit of fee revenue; eliminating
authorization to appeal certain decision; authorizing
the Oklahoma Department of Commerce to determine
revenue neutrality of certain projects; transferring
certain agreements executed by the Oklahoma Tourism
and Recreation Department to the Oklahoma Department
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of Commerce on certain date; requiring the transfer
of certain administrative rules; requiring the
Secretary of State to provide certain notice and make
modification to the Administrative Code; providing
the Oklahoma Department of Commerce jurisdiction over
certain rules; authorizing the Oklahoma Department of
Commerce to promulgate certain rules; clar ifying
statutory language; providing statutory reference;
and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 3, Chapter 196, O.S.L.
2017, as amended by Section 1, Chapter 443, O.S.L. 2019 (68 O.S.
Supp. 2020, Section 2393), is amended to read as follows:
Section 2393. As used in the Oklahoma Tourism Development Act:
1. “Agreement” means an agreement entered into pursuant to
Section 2396 of this title, by and b etween the Executive Director of
the Oklahoma Tourism and Recreation Department Oklahoma Department
of Commerce and an approved company, with respect to a tourism
attraction project;
2. “Approved company” means any eligible company or companies
seeking to undertake a tourism attraction project and is approved by
the Executive Director pursuant to Sections 2395 and 2396 of this
title;
3. “Approved costs” means:
a. obligations incurred for labor and to vendors,
contractors, subcontractors, builders and supp liers in
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connection with the acquisition, construction,
equipping and installation of a tourism attraction
project,
b. the costs of acquiring real property or rights in real
property in connection with a tourism attraction
project, and any costs incidental thereto,
c. the costs of contract bonds and of insurance of all
kinds that may be required or necessary during the
course of the acquisition, construction, equipping and
installation of a tourism attraction project which are
not paid by the vendor, suppli er or contractor, or
otherwise provided,
d. all costs of architectural and engineering services
including, but not limited to, estimates, plans and
specifications, preliminary investigations, and
supervision of construction and installation, as well
as for the performance of all the duties required by
or consequent to the acquisition, construction,
equipping and installation of a tourism attraction
project,
e. all costs required to be paid under the terms of any
contract for the acquisition, construction, e quipping
and installation of a tourism attraction project,
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f. all costs required for the installation of utilities
in connection with a tourism attraction project
including, but not limited to, water, sewer, sewage
treatment, gas, electricity and communica tions, and
including off-site construction of utility extensions
paid for by the approved company, and
g. all other costs comparable with those described in
this paragraph;
4. “Director” means the Executive Director of the Oklahoma
Tourism and Recreation Department Oklahoma Department of Commerce or
the Executive Director ’s designated representative;
5. “Eligible company” means any corporation, limited liability
company, partnership, sole proprietorship, business trust or any
other entity, operating or in tending to operate a tourism attraction
project, whether owned or leased, within this state that meets the
standards promulgated by the Executive Director pursuant to Section
2394 of this title and, with respect to an Entertainment District,
shall also include any such entity that will acquire, construct,
develop, equip, install, expand or operate all or any portion of the
Entertainment District, whether owned or leased;
6. “Entertainment District ” means a mixed-use planned
development project, with approv ed costs of One Million Dollars
($1,000,000.00) or more in the aggregate, encompassing more than one
hundred thousand (100,000) square feet and including an
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entertainment or recreational component and at least three of the
following categories: (a) retail; (b) housing; (c) office; (d)
restaurants; (e) hotel, regardless of whether the hotel is a
destination hotel; (f) grocery; (g) brewery facilities for a small
brewer (as defined in the Oklahoma Alcoholic Beverage Control Act,
Section 1-103 of Title 37A of t he Oklahoma Statutes); or (h)
structured parking. An Entertainment District may include a project
that is anticipated to be completed in multiple phases;
7. “Entertainment District Tenant Party ” means any corporation,
limited liability company, partnersh ip, sole proprietorship,
business trust or any other entity operating within a tourism
attraction project that is an Entertainment District pursuant to a
lease or similar agreement with an approved company or otherwise;
8. “Final approval” means the action taken by the Executive
Director authorizing the eligible company to receive inducements
under Section 2397 of this title;
9. “Increased state sales tax liability ” means that portion of
an entity’s reported state sales tax liability resulting from
taxable sales of goods and services to its customers at the tourism
attraction which exceeds the reported state sales tax liability for
sales to its customers at the tourism attraction for the same month
in the calendar year immediately preceding the certificati on as an
approved company or an Entertainment District Tenant Party, as
applicable;
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10. “Inducements” means the sales tax credit or incentive
payment as prescribed in Section 2397 of this title;
11. “Preliminary approval ” means the action taken by the
Executive Director conditioned upon final approval by the Executive
Director upon satisfaction by the eligible company of the
requirements of this act the Oklahoma Tourism Development Act ;
12. a. “Tourism attraction” means:
(1) a cultural or historical site,
(2) a recreational or entertainment facility,
(3) an area of natural phenomena or scenic beauty,
(4) a theme park,
(5) an amusement or entertainment park,
(6) an indoor or outdoor play or music show,
(7) a botanical garden,
(8) a cultural or educational c enter,
(9) a destination hotel whose location and amenities ,
including, but not limited to, upscale dining,
recreation and entertainment, make the hotel
itself a destination for tourists, or
(10) an Entertainment District.
b. A tourism attraction shall not include:
(1) lodging facilities, unless:
(a) the facilities constitute a portion of a
tourism attraction project and represent
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less than fifty percent (50%) of the total
approved costs of the tourism attraction
project, or
(b) the lodging facilities are a part of a
destination hotel or an Entertainment
District,
(2) facilities that are primarily devoted to the
retail sale of goods, unless:
(a) the goods are created at the site of the
tourism attraction project, or
(b) if the sale of goods is incidental to the
tourism attraction project, or
(c) such facilities are a part of an
Entertainment District,
(3) facilities that are not open to the general
public, unless such facilities are a part of an
Entertainment District wherein a substantial
portion of the Entertainment District is open to
the general public, as determined by the
Executive Director,
(4) facilities that do not serve as a likely
destination where individuals who are not
residents of this state would remain overnight in
commercial lodging at or nea r the tourism
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attraction project, unless such facilities are a
part of an Entertainment District,
(5) facilities owned by the State of Oklahoma or a
political subdivision of this state, or
(6) facilities established for the purpose of
conducting legalized gambling. However, a
facility regulated under the Oklahoma Horse
Racing Act, Sections 200 through 209 of Title 3A
of the Oklahoma Statutes, shall be a tourism
attraction for purposes of this act the Oklahoma
Tourism Development Act for any approved projec t
as outlined in subparagraph a of this paragraph
or for an approved project relating to pari -
mutuel racing at the facility and not for
establishing a casino or for offering casino -
style gambling; and
13. “Tourism attraction project ” or “project” means:
a. the acquisition, including the acquisition of real
estate by leasehold interest with a minimum term of
ten (10) years, construction and equipping of a
tourism attraction, and
b. the construction and installation of improvements to
facilities necessary or desirable for the acquisition,
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construction and installation of a tourism attraction,
including, but not limited to:
(1) surveys, and
(2) installation of utilities, which may include:
(a) water, sewer, sewage treatment, gas,
electricity, communications an d similar
facilities, and
(b) off-site construction of utility extensions
to the boundaries of the real estate on
which the facilities are located, all of
which shall be used to improve the economic
situation of the approved company in a
manner that shall allow the approved company
to attract tourists.
SECTION 2. AMENDATORY Section 4, Chapter 196, O.S.L.
2017, as amended by Section 2, Chapter 443, O.S.L. 2019 (68 O.S.
Supp. 2020, Section 2394), is amended to read as follows:
Section 2394. A. The Executive Director of the Oklahoma
Tourism and Recreation Department, with approval of the Oklahoma
Tourism and Recreation Commission, Oklahoma Department of Commerce
shall establish standards for the making of applications for
inducements to eligible companies and their tourism attraction
projects by the promulgation of rules in accordance with the
Administrative Procedures Act.
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B. With respect to each eligible company making an application
to the Executive Director for inducements, and w ith respect to the
tourism attraction described in the application, the Executive
Director shall make inquiries and request materials of the applicant
that shall include, but shall not be limited to:
1. Marketing plans for the project that target individu als who
are not residents of this state;
2. A description and location of the project , including a
description and boundary of the area encompassing the Entertainment
District, if applicable;
3. Capital and other anticipated expenditures for the project
that indicate that the total cost of the project shall exceed the
minimum amount set forth in subsection C of this section and the
anticipated sources of funding therefor, which for an Entertainment
District that is anticipated to be completed in multiple phases may
include capital and other anticipated expenditures for all phases of
the project;
4. The anticipated employment and wages to be paid at the
project, which may include employment and wages to be paid by the
eligible company and any tenants of th e tourism attraction project;
5. Business plans which indicate the average number of days in
a year in which the project or any component thereof will be in
operation and open to the public, if applicable; and
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6. The anticipated revenues and expenses gen erated by the
project, which for an Entertainment District may include the
anticipated revenues and expenses generated by each of the different
phases or components of the Entertainment District.
Based upon a review of these materials, if the Executive
Director determines that the eligible company and the tourism
attraction may reasonably be expected to satisfy the criteria for
final approval in subsection C of this section, then the Executive
Director may consider granting a preliminary approval of the
eligible company and the tourism attraction project pursuant to
subsection B of Section 2395 of this title.
C. For Except as provided for in subsection D of this section,
for a tourism attraction project, after granting a preliminary
approval, the Executive Director shall engage the services of
require the eligible company to hire a competent consulting firm
which shall submit to the Executive Director a report analyzing the
data made available by the eligible company and which shall collect
and analyze additional information necessary to determine that, in
the independent judgment of the consultant, the tourism attraction
project will:
1. Attract at least twenty -five percent (25%) of its visitors
from among persons who are not residents of this state;
2. Have costs in excess of Five Hundred Thousand Dollars
($500,000.00);
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3. Have a significant and positive economic impact on this
state considering, among other factors, the extent to which the
tourism attraction project will compete directly with existing
tourism attractions in this state, and the extent to which the
tourism attraction project will be revenue -neutral to the State of
Oklahoma, meaning the amount by which increased tax revenues from
the tourism attraction project will exceed the inducements all owed
pursuant to Section 2397 of this title;
4. Produce sufficient revenues and public demand to be
operating and open to the public on a regular and persistent basis;
and
5. Not adversely affect existing employment in this state.
D. At the request of the eligible company, the Executive
Director may allow the eligible company to hire the Oklahoma
Department of Commerce to prepare the report required in subsection
C of this section.
E. For a tourism attraction project that is an Entertainment
District and is anticipated to be completed in multiple phases, the
consulting firm’s required report may include the data and
information for the entire Entertainment District including any and
all components or phases of the Entertainment District and a
separate report for each component or phase of the Entertainment
District shall not be required.
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E. F. The eligible company shall pay for the cost of the
consultant’s required report and shall cooperate with the consultant
entity preparing the report and provide all of the data that the
consultant preparing entity deems necessary to make a determination
pursuant to this section. The cost for preparation of this report
by the Oklahoma Department of Commerce shall be set forth by
administrative rules promulgated by the Department, but in any event
shall be a nonrefundable fee of no less than Five Thousand Dollars
($5,000.00) per report. Payment for preparation of this report by
the Oklahoma Department of Commerce shall be made by the eligible
company to the Department upon approval of the request, and funds
received shall be deposited into the Oklahoma Department of Commerce
Revolving Fund created in Section 5012 of Title 74 of the Oklahoma
Statutes.
SECTION 3. AMENDATORY Section 5, Chapter 19 6, O.S.L.
2017, as amended by Section 3, Chapter 443, O.S.L. 2019 (68 O.S.
Supp. 2020, Section 2395), is amended to read as follows:
Section 2395. A. The Executive Director of the Oklahoma
Tourism and Recreation Department, with the approval of the Oklah oma
Tourism and Recreation Commission, Oklahoma Department of Commerce
shall establish standards for preliminary approval and final
approval of eligible companies and their projects by the
promulgation of rules in accordance with the Administrative
Procedures Act.
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B. The Executive Director may give preliminary approval by
designating an eligible company as a preliminarily approved company
and preliminarily authorizing the undertaking of the tourism
attraction project.
C. The Executive Director shall revie w the report of the
consultant prepared pursuant to subsection C of Section 2394 of this
title and other information that has been made available to the
Executive Director in order to assist the Executive Director in
determining whether the tourism attract ion project will further the
purposes of this act the Oklahoma Tourism Development Act .
D. The criteria for final approval of eligible companies and
tourism attraction projects shall include, but shall not be limited
to, the criteria set forth in subsecti on C of Section 2394 of this
title.
E. After a review of the relevant materials, the consultant ’s
report, other information made available to the Executive Director,
and completion of other inquiries, the Executive Director may give
final approval to the eligible company’s application for a tourism
attraction project and may grant to the eligible company the status
of an approved company. The decision reached by the Executive
Director may be appealed by the eligible company to the Tourism and
Recreation Commission. The decision of the Tourism and Recreation
Commission shall constitute the final administrative decision of the
Oklahoma Tourism and Recreation Department.
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SECTION 4. AMENDATORY Section 6, Chapter 196, O.S.L.
2017, as amended by Section 4, Chapter 443, O.S.L. 2019 (68 O.S.
Supp. 2020, Section 2396), is amended to read as follows:
Section 2396. A. Upon granting final approval, the Executive
Director of the Oklahoma Tourism and Recreation Department Oklahoma
Department of Commerce may enter into an agreement with an approved
company with respect to its tourism attraction project. The terms
and provisions of each agreement shall include, but shall not be
limited to:
1. The amount of approved costs, which shall be determ ined by
negotiations between the Executive Director and the approved
company;
2. A date certain by which the approved company shall have
completed the tourism attraction project or an individual component
or phase of the project if the tourism attraction project is an
Entertainment District. Within three (3) months of the completion
date of the whole or an individual component or phase of the
project, the approved company shall document its actual costs of the
project through a certification of the costs by an independent
certified public accountant acceptable to the Executive Director;
and
3. The following provisions:
a. the term of the agreement shall be ten (10) years from
the later of:
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(1) the date of the final approval of the tourism
attraction project, or
(2) the completion date specified in the agreement,
if the completion date is within three (3) years
of the date of the final approval of the tourism
attraction project. However, the term of the
agreement may be extended for up to two (2)
additional years by the Executive Director, with
the advice and consent of the Oklahoma Tax
Commission, if the Executive Director determines
that the failure to complete the tourism
attraction project within three (3) years
resulted from:
(a) unanticipated and unav oidable delay in the
construction of the tourism attraction
project,
(b) an original completion date for the tourism
attraction project, as originally planned,
which will be more than three (3) years from
the date construction began, or
(c) a change in business structure resulting
from a merger or acquisition,
b. in any tax year during which an agreement is in
effect, if the amount of sales tax to be remitted by
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the approved company or an Entertainment District
Tenant Party, if applicable, exceeds the sales tax
credit available to the approved company or
Entertainment District Tenant Party, if applicable,
then the approved company or Entertainment District
Tenant Party, if applicable, shall pay the excess to
this state as sales tax,
c. within forty-five (45) days after the end of each
calendar year the approved company shall supply the
Executive Director with such reports and
certifications as the Executive Director may request
demonstrating to the satisfaction of the Executive
Director that the approved comp any is in compliance
with the provisions of the Oklahoma Tourism
Development Act, and
d. the approved company or an Entertainment District
Tenant Party, if applicable, shall not receive an
inducement with respect to any calendar year if:
(1) with respect to any tourism attraction project
that is not an Entertainment District in any
calendar year following the fourth year of the
agreement, the tourism attraction project fails
to attract at least fifteen percent (15%) of its
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visitors from among persons who ar e not residents
of this state, or
(2) in any calendar year following the first year of
the project or the tourism attraction project is
not operating and open to the public on a regular
and consistent basis, which for a tourism
attraction project that is a n Entertainment
District shall mean that a substantial portion of
the Entertainment District is not operating and
open to the public on a regular and consistent
basis.
B. The agreement shall not be transferable or assignable by the
approved company withou t the written consent of the Executive
Director but, with respect to a tourism attraction project that is
an Entertainment District, the approved company can elect to pass -
through all or a portion of the sales tax credit to one or more
Entertainment Distri ct Tenant Parties in accordance with Section
2397 of this title.
C. If the approved company utilizes or receives inducements
which are subsequently disallowed then the approved company will be
liable for the payment to the Tax Commission of an amount equa l to
(i) all taxes resulting from the disallowance of the inducements
plus applicable penalties and interest, whether owed by the approved
company or an Entertainment District Tenant Party to which the
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credits have been passed -through in accordance with Se ction 2397 of
this title, and/or (ii) all incentive payments previously received
by the approved company, plus applicable penalties and interest.
Only the approved company originally allowed a sales tax credit
shall be held liable to make such payments an d not any Entertainment
District Tenant Party to whom the credit has been passed -through in
accordance with Section 2397 of this title.
D. The Executive Director shall provide a copy of each
agreement entered into with an approved company to the Tax
Commission.
E. For a tourism attraction project that is an Entertainment
District and anticipated to have multiple components or phases, the
Executive Director may enter into more than one agreement with
different approved companies for the different component s or phases
of the Entertainment District and such agreements may be entered
into at different times as though the different components or phases
of the Entertainment District are their own separate project. In
such case, the Executive Director shall not be required to obtain a
separate consultant’s report (referred to in subsection C of Section
2394 of this title) for each individual component or phase of the
Entertainment District, but only one consultant’s report for the
entire Entertainment District.
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SECTION 5. AMENDATORY Section 7, Chapter 196, O.S.L.
2017, as amended by Section 5, Chapter 443, O.S.L. 2019 (68 O.S.
Supp. 2020, Section 2397), is amended to read as follows:
Section 2397. A. Upon receiving notification from the
Executive Director of the Oklahoma Tourism and Recreation Department
Oklahoma Department of Commerce that an approved company has entered
into a tourism project agreement and is entitled to the inducements
provided by the Oklahoma Tourism Development Act, the Oklahoma Tax
Commission shall provide the approved company with forms and
instructions as necessary to claim or receive or pass -through those
inducements.
B. An approved company whose agreement provides that it shall
expend approved costs of more tha n Five Hundred Thousand Dollars
($500,000.00) for a tourism attraction project but less than One
Million Dollars ($1,000,000.00) shall be entitled to a sales tax
credit if the company certifies to the Tax Commission that it has
expended at least the minimu m amount in approved costs, and the
Executive Director certifies that the approved company is in
compliance with this act the Oklahoma Tourism Development Act . The
Tax Commission shall then issue a tax credit memorandum to the
approved company granting a sales tax credit in the amount of up to
ten percent (10%) of the approved costs, but limited to the percent
of the approved costs that will result in the project being revenue -
neutral to the State of Oklahoma as determined by the Tax Commission
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Oklahoma Department of Commerce . Subsequent requests for credit for
additional certified approved costs in excess of the minimum amount
for each project as listed in this subsection but less than One
Million Dollars ($1,000,000.00) shall result in a sales tax credi t
in the amount of up to ten percent (10%) of the approved costs, but
limited to the percent of the approved costs that will result in the
project being revenue -neutral to the State of Oklahoma as determined
by the Tax Commission Oklahoma Department of Com merce. Sales tax
credits allowed pursuant to the provisions of this act the Oklahoma
Tourism Development Act shall not be transferable or assignable;
provided that, with respect to a tourism attraction project that is
an Entertainment District, the approv ed company can elect to pass -
through all or a portion of the sales tax credit to one or more
Entertainment District Tenant Parties. The approved company and the
Entertainment District Tenant Party shall jointly file a copy of the
written credit pass-through agreement with the Oklahoma Tax
Commission within thirty (30) days of the effective date of the
agreement. Such filing of the agreement with the Oklahoma Tax
Commission shall perfect such agreement. The written agreement
shall contain the name, addres s and taxpayer identification number
of the parties to the agreement, the amount of credit being passed -
through, the month and year the credit was originally allowed to the
approved company, the month and tax year or years for which the
credit may be claimed, and a representation by the approved company
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that the approved company has neither claimed for its own behalf nor
conveyed such credits to any other Entertainment District Tenant
Party. The Tax Commission shall develop a standard form for use by
an approved company and an Entertainment District Tenant Party
demonstrating eligibility for the Entertainment District Tenant
Party to utilize the sales tax credit. The Tax Commission shall
develop a system to record and track the pass -through of the sales
tax credit and certify the ownership of the sales tax credit and may
promulgate rules to permit verification of the validity and
timeliness of a sales tax credit claimed upon a sales tax return
pursuant to this subsection but shall not promulgate any rules w hich
unduly restrict or hinder the pass -through of such sales tax credit
to an Entertainment District Tenant Party.
An approved company whose agreement provides that it shall
expend approved costs in excess of One Million Dollars
($1,000,000.00) shall be e ntitled to a sales tax credit if the
company certifies to the Tax Commission that it has expended at
least One Million Dollars ($1,000,000.00) in approved costs and the
Executive Director certifies that the approved company is in
compliance with this act the Oklahoma Tourism Development Act . The
Tax Commission shall then issue a tax credit memorandum to the
approved company granting a sales tax credit in the amount of up to
twenty-five percent (25%) of the approved costs, but limited to the
percent of the approved costs that will result in the project being
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revenue-neutral to the State of Oklahoma as determined by the Tax
Commission Oklahoma Department of Commerce . The credit on all
subsequent additional certified approved costs shall be in the
amount of up to twenty-five percent (25%) of the costs, but limited
to the percent of the approved costs that will result in the project
being revenue-neutral to the State of Oklahoma as determined by the
Tax Commission Oklahoma Department of Commerce . For a tourism
attraction project that is an Entertainment District, an approved
company may elect to receive an incentive payment based on sales tax
collections of Entertainment District Tenant Parties rather than a
sales tax credit. The incentive payment shall be in the amount of
up to twenty-five percent (25%) of the approved costs but limited to
the percent of the approved costs that will result in the project
being revenue-neutral to the State of Oklahoma as determined by the
Tax Commission Oklahoma Department of C ommerce; provided that, (A)
in no event shall the incentive payments exceed the increased state
sales tax liability of the approved company and the Entertainment
District Tenant Parties that is actually received by the Tax
Commission, and (B) the approved company shall be entitled to
receive only ten percent (10%) of the incentive payment amount
during each calendar year. The Tax Commission shall issue an
incentive payment memorandum to the approved company granting a
right to receive an incentive payment from the Tax Commission in the
amount of up to twenty -five percent (25%) of the approved costs but
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limited to the percent of the approved costs that will result in the
project being revenue -neutral to the State of Oklahoma as determined
by the Tax Commission Oklahoma Department of Commerce . As soon as
practicable after the end of each calendar year during the term of
the agreement, the approved company shall file a claim for the
incentive payment with the Tax Commission, and the Tax Commission
shall be responsible for ensuring that the amount of the incentive
payment claimed does not exceed the increased state sales tax
liability of the approved company and the Entertainment District
Tenant Parties that has been actually received by the Tax
Commission, which may include accessing the Oklahoma sales tax
returns of the Entertainment District Tenant Parties as permitted by
this section.
The cumulative inducements provided pursuant to this act the
Oklahoma Tourism Development Act shall not exceed Fifteen Million
Dollars ($15,000,000.00) per year.
The Tax Commission shall require proof of expenditures prior to
issuing a tax credit memorandum or incentive payment memorandum to
the approved company which may be satisfied by a report from an
independent certified pub lic accountant. Additional credit
memoranda or incentive memoranda may be issued as the approved
company certifies additional expenditures of approved costs.
No tax credit memorandum or incentive payment memorandum shall
be issued for any approved costs e xpended after the expiration of
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three (3) years from the date the agreement was signed by the
Executive Director and the approved company. However, the Executive
Director, with the advice and consent of the Tax Commission, may
authorize inducements for ap proved costs expended up to five (5)
years from the date the agreement was signed if the Executive
Director determines that the failure to complete the tourism
attraction project within three (3) years resulted from:
1. Unanticipated and unavoidable delay in the construction of
the tourism attraction;
2. An original completion date for the tourism attraction, as
originally planned, which will be more than three (3) years from the
date construction began; or
3. A change in business ownership or business s tructure
resulting from a merger or acquisition.
C. A sales tax credit allowed pursuant to the provisions of
this section may be used to offset a portion of the reported state
sales tax liability of the approved company or an Entertainment
District Tenant Party, if applicable, for all sales tax reporting
periods following the issuance of the credit memorandum subject to
the following limitations:
1. Only increased state sales tax liability may be offset by
the issued credit;
2. An approved company whose agreement provides that it shall
expend approved costs in excess of One Million Dollars
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($1,000,000.00) or an Entertainment District Party, if applicable,
shall be entitled to use only ten percent (10%) of the amount of
each issued credit to offset increas ed state sales tax liability
during each calendar year, plus the amount of any unused credit
carried forward from a prior calendar year, and an approved company
whose agreement provides that it shall expend approved costs of more
than the minimum amount fo r each project as listed in this
subsection but less than One Million Dollars ($1,000,000.00) shall
be entitled to use only twenty percent (20%) of the amount of each
issued credit to offset increased state sales tax liability during
each calendar year, pl us the amount of any unused credit carried
forward from a prior calendar year; and
3. All issued credit memoranda or incentive payment memorandum
shall expire at the end of the month following the expiration of the
agreement as provided in Section 2396 of this title.
The approved company or an Entertainment District Tenant Party,
if applicable, shall have no obligation to refund or otherwise
return any amount of this inducement to the person from whom the
sales tax was collected.
D. The Tax Commission sha ll promulgate rules as are necessary
for the proper administration of the Oklahoma Tourism Development
Act. The Tax Commission may also develop forms and instructions as
necessary for an approved company or Entertainment District Tenant
Party, if applicable, to claim or receive or pass -through the
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inducements provided by this act the Oklahoma Tourism Development
Act.
E. The Tax Commission shall have the authority to obtain any
information necessary from or regarding the approved company or an
Entertainment District Tenant Party, if applicable, and the
Executive Director to verify that approved companies or an
Entertainment District Tenant Party, if applicable, have received
the proper amounts of inducements as authorized by this act the
Oklahoma Tourism Development Act. The Oklahoma Tax Commission shall
demand the repayment of any inducements taken or received in excess
of the inducements allowed by this act.
F. No sales tax credit or incentive payment right authorized by
this section shall be granted on or after January 1, 2026.
Notwithstanding the foregoing, an approved company that has entered
into a tourism attraction project agreement with the Oklahoma
Tourism and Recreation Department Oklahoma Department of Commerce
pursuant to Section 2396 of this title prior to January 1, 2026,
shall continue to be entitled to claim or receive any inducements
authorized by this section as contemplated by the tourism project
agreement.
G. All currently approved tourism project agreements executed
by the Oklahoma Tourism and Recreation Department are hereby
transferred to the Oklahoma Department of Commerce upon the
effective date of this act.
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H. On the effective date of this act, all administrative rules
promulgated by the Oklahoma Tourism and Recreation Department
regarding the Oklahoma Tourism Development Act shall be transferred
to and become a part of the administrative rules of the Oklahoma
Department of Commerce. The Office of Administrative Rules in the
Office of the Secretary of State shall provide adequate notice in
the Oklahoma Register of the transferred rules and shall place the
transferred rules under the Administrative Code section of the
Oklahoma Department of Commerce. On the effective date of this act,
any amendment, repeal or addition to the trans ferred rules shall be
under the jurisdiction of the Oklahoma Department of Commerce, who
shall have the authority to enact rules in order to carry out the
provisions of the Oklahoma Tourism Development Act.
SECTION 6. This act shall become effective November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON TOURISM, dated 04/01/2021 - DO
PASS.