Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB739 Compare Versions

Version 1 (Old)

Version 2 (New)

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3	28
4		-	An Act
5		-	ENROLLED SENATE
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	1st Session of the 58th Legislature (2021)
	34	+
	35	+	ENGROSSED SENATE
6	36		BILL NO. 739 By: Leewright and Hall of the
7	37		Senate
8	38
9	39		and
10	40
11	41		Bashore of the House
12	42
13	43
14	44
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17	47		An Act relating to the sales tax credit; amending
18	48		Section 3, Chapter 196, O.S.L. 2017, as amended by
19	49		Section 1, Chapter 443, O.S.L. 2019, Section 4,
20	50		Chapter 196, O.S.L. 2017, as amended by Section 2,
21	51		Chapter 443, O.S.L. 2019, Section 5, Chapter 196,
22	52		O.S.L. 2017, as amended by Section 3, Chapter 443,
23	53		O.S.L. 2019, Section 6, Chapter 196, O.S.L. 2017, as
24	54		amended by Section 4, Chapter 443, O.S.L. 2019 and
25	55		Section 7, Chapter 196, O.S.L. 2017, as amended by
26	56		Section 5, Chapter 443, O.S.L. 2019 (68 O.S. Supp.
27	57		2020, Sections 2393, 2394, 2395, 2396 and 2397),
28	58		which relate to the Oklahoma Tourism Development Act ;
29	59		modifying definitions; transferring powers and duties
30	60		from the Executive Director of the Oklahoma Tourism
31	61		and Recreation Department to the Executive Director
32	62		of the Oklahoma Department of Commerce; requiri ng
33	63		certain company to hire consulting firm; providing
34	64		exception upon request of company; authorizing the
35	65		Executive Director of the Oklahoma Department of
36	66		Commerce to allow a company to hire the Department to
37	67		produce report; requiring certain costs to be
38	68		established by promulgation of rules; establishing
39	69		minimum fee; clarifying circumstances for payment of
40	70		fee; requiring deposit of fee revenue; eliminating
41	71		authorization to appeal certain decision; authorizing
42	72		the Oklahoma Department of Commerce to determine
43	73		revenue neutrality of certain projects; transferring
44	74		certain agreements executed by the Oklahoma Tourism
45	75		and Recreation Department to the Oklahoma Department
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46	103		of Commerce on certain date; requiring the transfer
47		-
48		-	ENR. S. B. NO. 739 Page 2
49	104		of certain administrative rules; requiring the
50	105		Secretary of State to provide certain notice and make
51	106		modification to the Administrative Code; providing
52	107		the Oklahoma Department of Commerce jurisdiction over
53	108		certain rules; authorizing the Oklahoma Department of
54	109		Commerce to promulgate certain rules; clar ifying
55	110		statutory language; providing statutory reference;
56	111		and providing an effective date .
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62		-	SUBJECT: Sales tax credit
63		-
64	117		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
65		-
66	118		SECTION 1. AMENDATORY Section 3, Chapter 196, O.S.L.
67	119		2017, as amended by Section 1, Chapter 443, O.S.L. 2019 (68 O.S.
68	120		Supp. 2020, Section 2393), is amended to read as follows:
69		-
70	121		Section 2393. As used in the Oklahoma Tourism Development Act:
71		-
72	122		1. “Agreement” means an agreement entered into pursuant to
73	123		Section 2396 of this title, by and b etween the Executive Director of
74	124		the Oklahoma Tourism and Recreation Department Oklahoma Department
75	125		of Commerce and an approved company, with respect to a tourism
76	126		attraction project;
77		-
78	127		2. “Approved company” means any eligible company or companies
79	128		seeking to undertake a tourism attraction project and is approved by
80	129		the Executive Director pursuant to Sections 2395 and 2396 of this
81	130		title;
82		-
83	131		3. “Approved costs” means:
84		-
85	132		a. obligations incurred for labor and to vendors,
86	133		contractors, subcontractors, builders and supp liers in
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87	161		connection with the acquisition, construction,
88	162		equipping and installation of a tourism attraction
89	163		project,
90		-
91		-
92		-	ENR. S. B. NO. 739 Page 3
93	164		b. the costs of acquiring real property or rights in real
94	165		property in connection with a tourism attraction
95	166		project, and any costs incidental thereto,
96		-
97	167		c. the costs of contract bonds and of insurance of all
98	168		kinds that may be required or necessary during the
99	169		course of the acquisition, construction, equipping and
100	170		installation of a tourism attraction project which are
101	171		not paid by the vendor, suppli er or contractor, or
102	172		otherwise provided,
103		-
104	173		d. all costs of architectural and engineering services
105	174		including, but not limited to, estimates, plans and
106	175		specifications, preliminary investigations, and
107	176		supervision of construction and installation, as well
108	177		as for the performance of all the duties required by
109	178		or consequent to the acquisition, construction,
110	179		equipping and installation of a tourism attraction
111	180		project,
112		-
113	181		e. all costs required to be paid under the terms of any
114	182		contract for the acquisition, construction, e quipping
115	183		and installation of a tourism attraction project,
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117	211		f. all costs required for the installation of utilities
118	212		in connection with a tourism attraction project
119	213		including, but not limited to, water, sewer, sewage
120	214		treatment, gas, electricity and communica tions, and
121	215		including off-site construction of utility extensions
122	216		paid for by the approved company, and
123		-
124	217		g. all other costs comparable with those described in
125	218		this paragraph;
126		-
127	219		4. “Director” means the Executive Director of the Oklahoma
128	220		Tourism and Recreation Department Oklahoma Department of Commerce or
129	221		the Executive Director ’s designated representative;
130		-
131	222		5. “Eligible company” means any corporation, limited liability
132	223		company, partnership, sole proprietorship, business trust or any
133	224		other entity, operating or in tending to operate a tourism attraction
134	225		project, whether owned or leased, within this state that meets the
135		-
136		-	ENR. S. B. NO. 739 Page 4
137	226		standards promulgated by the Executive Director pursuant to Section
138	227		2394 of this title and, with respect to an Entertainment District,
139	228		shall also include any such entity that will acquire, construct,
140	229		develop, equip, install, expand or operate all or any portion of the
141	230		Entertainment District, whether owned or leased;
142		-
143	231		6. “Entertainment District ” means a mixed-use planned
144	232		development project, with approv ed costs of One Million Dollars
145	233		($1,000,000.00) or more in the aggregate, encompassing more than one
146	234		hundred thousand (100,000) square feet and including an
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147	262		entertainment or recreational component and at least three of the
148	263		following categories: (a) retail; (b) housing; (c) office; (d)
149	264		restaurants; (e) hotel, regardless of whether the hotel is a
150	265		destination hotel; (f) grocery; (g) brewery facilities for a small
151	266		brewer (as defined in the Oklahoma Alcoholic Beverage Control Act,
152	267		Section 1-103 of Title 37A of t he Oklahoma Statutes); or (h)
153	268		structured parking. An Entertainment District may include a project
154	269		that is anticipated to be completed in multiple phases;
155		-
156	270		7. “Entertainment District Tenant Party ” means any corporation,
157	271		limited liability company, partnersh ip, sole proprietorship,
158	272		business trust or any other entity operating within a tourism
159	273		attraction project that is an Entertainment District pursuant to a
160	274		lease or similar agreement with an approved company or otherwise;
161		-
162	275		8. “Final approval” means the action taken by the Executive
163	276		Director authorizing the eligible company to receive inducements
164	277		under Section 2397 of this title;
165		-
166	278		9. “Increased state sales tax liability ” means that portion of
167	279		an entity’s reported state sales tax liability resulting from
168	280		taxable sales of goods and services to its customers at the tourism
169	281		attraction which exceeds the reported state sales tax liability for
170	282		sales to its customers at the tourism attraction for the same month
171	283		in the calendar year immediately preceding the certificati on as an
172	284		approved company or an Entertainment District Tenant Party, as
173	285		applicable;
174	286
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175	313		10. “Inducements” means the sales tax credit or incentive
176	314		payment as prescribed in Section 2397 of this title;
177		-
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179		-	ENR. S. B. NO. 739 Page 5
180	315		11. “Preliminary approval ” means the action taken by the
181	316		Executive Director conditioned upon final approval by the Executive
182	317		Director upon satisfaction by the eligible company of the
183	318		requirements of this act the Oklahoma Tourism Development Act ;
184		-
185	319		12. a. “Tourism attraction” means:
186		-
187	320		(1) a cultural or historical site,
188		-
189	321		(2) a recreational or entertainment facility,
190		-
191	322		(3) an area of natural phenomena or scenic beauty,
192		-
193	323		(4) a theme park,
194		-
195	324		(5) an amusement or entertainment park,
196		-
197	325		(6) an indoor or outdoor play or music show,
198		-
199	326		(7) a botanical garden,
200		-
201	327		(8) a cultural or educational c enter,
202		-
203	328		(9) a destination hotel whose location and amenities ,
204	329		including, but not limited to, upscale dining,
205	330		recreation and entertainment, make the hotel
206	331		itself a destination for tourists, or
207		-
208	332		(10) an Entertainment District.
209		-
210	333		b. A tourism attraction shall not include:
211		-
212	334		(1) lodging facilities, unless:
213		-
214	335		(a) the facilities constitute a portion of a
215	336		tourism attraction project and represent
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216	364		less than fifty percent (50%) of the total
217	365		approved costs of the tourism attraction
218	366		project, or
219		-
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221		-	ENR. S. B. NO. 739 Page 6
222	367		(b) the lodging facilities are a part of a
223	368		destination hotel or an Entertainment
224	369		District,
225		-
226	370		(2) facilities that are primarily devoted to the
227	371		retail sale of goods, unless:
228		-
229	372		(a) the goods are created at the site of the
230	373		tourism attraction project, or
231		-
232	374		(b) if the sale of goods is incidental to the
233	375		tourism attraction project, or
234		-
235	376		(c) such facilities are a part of an
236	377		Entertainment District,
237		-
238	378		(3) facilities that are not open to the general
239	379		public, unless such facilities are a part of an
240	380		Entertainment District wherein a substantial
241	381		portion of the Entertainment District is open to
242	382		the general public, as determined by the
243	383		Executive Director,
244		-
245	384		(4) facilities that do not serve as a likely
246	385		destination where individuals who are not
247	386		residents of this state would remain overnight in
248	387		commercial lodging at or nea r the tourism
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249	415		attraction project, unless such facilities are a
250	416		part of an Entertainment District,
251		-
252	417		(5) facilities owned by the State of Oklahoma or a
253	418		political subdivision of this state, or
254		-
255	419		(6) facilities established for the purpose of
256	420		conducting legalized gambling. However, a
257	421		facility regulated under the Oklahoma Horse
258	422		Racing Act, Sections 200 through 209 of Title 3A
259	423		of the Oklahoma Statutes, shall be a tourism
260	424		attraction for purposes of this act the Oklahoma
261	425		Tourism Development Act for any approved projec t
262	426		as outlined in subparagraph a of this paragraph
263	427		or for an approved project relating to pari -
264		-
265		-	ENR. S. B. NO. 739 Page 7
266	428		mutuel racing at the facility and not for
267	429		establishing a casino or for offering casino -
268	430		style gambling; and
269		-
270	431		13. “Tourism attraction project ” or “project” means:
271		-
272	432		a. the acquisition, including the acquisition of real
273	433		estate by leasehold interest with a minimum term of
274	434		ten (10) years, construction and equipping of a
275	435		tourism attraction, and
276		-
277	436		b. the construction and installation of improvements to
278	437		facilities necessary or desirable for the acquisition,
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279	465		construction and installation of a tourism attraction,
280	466		including, but not limited to:
281		-
282	467		(1) surveys, and
283		-
284	468		(2) installation of utilities, which may include:
285		-
286	469		(a) water, sewer, sewage treatment, gas,
287	470		electricity, communications an d similar
288	471		facilities, and
289		-
290	472		(b) off-site construction of utility extensions
291	473		to the boundaries of the real estate on
292	474		which the facilities are located, all of
293	475		which shall be used to improve the economic
294	476		situation of the approved company in a
295	477		manner that shall allow the approved company
296	478		to attract tourists.
297		-
298	479		SECTION 2. AMENDATORY Section 4, Chapter 196, O.S.L.
299	480		2017, as amended by Section 2, Chapter 443, O.S.L. 2019 (68 O.S.
300	481		Supp. 2020, Section 2394), is amended to read as follows:
301		-
302	482		Section 2394. A. The Executive Director of the Oklahoma
303	483		Tourism and Recreation Department, with approval of the Oklahoma
304	484		Tourism and Recreation Commission, Oklahoma Department of Commerce
305	485		shall establish standards for the making of applications for
306	486		inducements to eligible companies and their tourism attraction
307		-
308		-	ENR. S. B. NO. 739 Page 8
309	487		projects by the promulgation of rules in accordance with the
310	488		Administrative Procedures Act.
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311	515
312	516		B. With respect to each eligible company making an application
313	517		to the Executive Director for inducements, and w ith respect to the
314	518		tourism attraction described in the application, the Executive
315	519		Director shall make inquiries and request materials of the applicant
316	520		that shall include, but shall not be limited to:
317		-
318	521		1. Marketing plans for the project that target individu als who
319	522		are not residents of this state;
320		-
321	523		2. A description and location of the project , including a
322	524		description and boundary of the area encompassing the Entertainment
323	525		District, if applicable;
324		-
325	526		3. Capital and other anticipated expenditures for the project
326	527		that indicate that the total cost of the project shall exceed the
327	528		minimum amount set forth in subsection C of this section and the
328	529		anticipated sources of funding therefor, which for an Entertainment
329	530		District that is anticipated to be completed in multiple phases may
330	531		include capital and other anticipated expenditures for all phases of
331	532		the project;
332		-
333	533		4. The anticipated employment and wages to be paid at the
334	534		project, which may include employment and wages to be paid by the
335	535		eligible company and any tenants of th e tourism attraction project;
336		-
337	536		5. Business plans which indicate the average number of days in
338	537		a year in which the project or any component thereof will be in
339	538		operation and open to the public, if applicable; and
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340	565
341	566		6. The anticipated revenues and expenses gen erated by the
342	567		project, which for an Entertainment District may include the
343	568		anticipated revenues and expenses generated by each of the different
344	569		phases or components of the Entertainment District.
345		-
346	570		Based upon a review of these materials, if the Executive
347	571		Director determines that the eligible company and the tourism
348	572		attraction may reasonably be expected to satisfy the criteria for
349	573		final approval in subsection C of this section, then the Executive
350	574		Director may consider granting a preliminary approval of the
351		-
352		-	ENR. S. B. NO. 739 Page 9
353	575		eligible company and the tourism attraction project pursuant to
354	576		subsection B of Section 2395 of this title.
355		-
356	577		C. For Except as provided for in subsection D of this section,
357	578		for a tourism attraction project, after granting a preliminary
358	579		approval, the Executive Director shall engage the services of
359	580		require the eligible company to hire a competent consulting firm
360	581		which shall submit to the Executive Director a report analyzing the
361	582		data made available by the eligible company and which shall collect
362	583		and analyze additional information necessary to determine that, in
363	584		the independent judgment of the consultant, the tourism attraction
364	585		project will:
365		-
366	586		1. Attract at least twenty -five percent (25%) of its visitors
367	587		from among persons who are not residents of this state;
368		-
369	588		2. Have costs in excess of Five Hundred Thousand Dollars
370	589		($500,000.00);
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371	616
372	617		3. Have a significant and positive economic impact on this
373	618		state considering, among other factors, the extent to which the
374	619		tourism attraction project will compete directly with existing
375	620		tourism attractions in this state, and the extent to which the
376	621		tourism attraction project will be revenue -neutral to the State of
377	622		Oklahoma, meaning the amount by which increased tax revenues from
378	623		the tourism attraction project will exceed the inducements all owed
379	624		pursuant to Section 2397 of this title;
380		-
381	625		4. Produce sufficient revenues and public demand to be
382	626		operating and open to the public on a regular and persistent basis;
383	627		and
384		-
385	628		5. Not adversely affect existing employment in this state.
386		-
387	629		D. At the request of the eligible company, the Executive
388	630		Director may allow the eligible company to hire the Oklahoma
389	631		Department of Commerce to prepare the report required in subsection
390	632		C of this section.
391		-
392	633		E. For a tourism attraction project that is an Entertainment
393	634		District and is anticipated to be completed in multiple phases, the
394	635		consulting firm’s required report may include the data and
395		-
396		-	ENR. S. B. NO. 739 Page 10
397	636		information for the entire Entertainment District including any and
398	637		all components or phases of the Entertainment District and a
399	638		separate report for each component or phase of the Entertainment
400	639		District shall not be required.
	640	+
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	642	+	BOLD FACE denotes Committee Amendments. 1
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401	666
402	667		E. F. The eligible company shall pay for the cost of the
403	668		consultant’s required report and shall cooperate with the consultant
404	669		entity preparing the report and provide all of the data that the
405	670		consultant preparing entity deems necessary to make a determination
406	671		pursuant to this section. The cost for preparation of this report
407	672		by the Oklahoma Department of Commerce shall be set forth by
408	673		administrative rules promulgated by the Department, but in any event
409	674		shall be a nonrefundable fee of no less than Five Thousand Dollars
410	675		($5,000.00) per report. Payment for preparation of this report by
411	676		the Oklahoma Department of Commerce shall be made by the eligible
412	677		company to the Department upon approval of the request, and funds
413	678		received shall be deposited into the Oklahoma Department of Commerce
414	679		Revolving Fund created in Section 5012 of Title 74 of the Oklahoma
415	680		Statutes.
416		-
417	681		SECTION 3. AMENDATORY Section 5, Chapter 19 6, O.S.L.
418	682		2017, as amended by Section 3, Chapter 443, O.S.L. 2019 (68 O.S.
419	683		Supp. 2020, Section 2395), is amended to read as follows:
420		-
421	684		Section 2395. A. The Executive Director of the Oklahoma
422	685		Tourism and Recreation Department, with the approval of the Oklah oma
423	686		Tourism and Recreation Commission, Oklahoma Department of Commerce
424	687		shall establish standards for preliminary approval and final
425	688		approval of eligible companies and their projects by the
426	689		promulgation of rules in accordance with the Administrative
427	690		Procedures Act.
428	691
	692	+	SB739 HFLR Page 14
	693	+	BOLD FACE denotes Committee Amendments. 1
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429	718		B. The Executive Director may give preliminary approval by
430	719		designating an eligible company as a preliminarily approved company
431	720		and preliminarily authorizing the undertaking of the tourism
432	721		attraction project.
433		-
434	722		C. The Executive Director shall revie w the report of the
435	723		consultant prepared pursuant to subsection C of Section 2394 of this
436	724		title and other information that has been made available to the
437	725		Executive Director in order to assist the Executive Director in
438		-
439		-	ENR. S. B. NO. 739 Page 11
440	726		determining whether the tourism attract ion project will further the
441	727		purposes of this act the Oklahoma Tourism Development Act .
442		-
443	728		D. The criteria for final approval of eligible companies and
444	729		tourism attraction projects shall include, but shall not be limited
445	730		to, the criteria set forth in subsecti on C of Section 2394 of this
446	731		title.
447		-
448	732		E. After a review of the relevant materials, the consultant ’s
449	733		report, other information made available to the Executive Director,
450	734		and completion of other inquiries, the Executive Director may give
451	735		final approval to the eligible company’s application for a tourism
452	736		attraction project and may grant to the eligible company the status
453	737		of an approved company. The decision reached by the Executive
454	738		Director may be appealed by the eligible company to the Tourism and
455	739		Recreation Commission. The decision of the Tourism and Recreation
456	740		Commission shall constitute the final administrative decision of the
457	741		Oklahoma Tourism and Recreation Department.
458	742
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	744	+	BOLD FACE denotes Committee Amendments. 1
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459	769		SECTION 4. AMENDATORY Section 6, Chapter 196, O.S.L.
460	770		2017, as amended by Section 4, Chapter 443, O.S.L. 2019 (68 O.S.
461	771		Supp. 2020, Section 2396), is amended to read as follows:
462		-
463	772		Section 2396. A. Upon granting final approval, the Executive
464	773		Director of the Oklahoma Tourism and Recreation Department Oklahoma
465	774		Department of Commerce may enter into an agreement with an approved
466	775		company with respect to its tourism attraction project. The terms
467	776		and provisions of each agreement shall include, but shall not be
468	777		limited to:
469		-
470	778		1. The amount of approved costs, which shall be determ ined by
471	779		negotiations between the Executive Director and the approved
472	780		company;
473		-
474	781		2. A date certain by which the approved company shall have
475	782		completed the tourism attraction project or an individual component
476	783		or phase of the project if the tourism attraction project is an
477	784		Entertainment District. Within three (3) months of the completion
478	785		date of the whole or an individual component or phase of the
479	786		project, the approved company shall document its actual costs of the
480	787		project through a certification of the costs by an independent
481		-
482		-	ENR. S. B. NO. 739 Page 12
483	788		certified public accountant acceptable to the Executive Director;
484	789		and
485		-
486	790		3. The following provisions:
487		-
488	791		a. the term of the agreement shall be ten (10) years from
489	792		the later of:
490	793
	794	+	SB739 HFLR Page 16
	795	+	BOLD FACE denotes Committee Amendments. 1
	796	+	2
	797	+	3
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	800	+	6
	801	+	7
	802	+	8
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	807	+	13
	808	+	14
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	819	+
491	820		(1) the date of the final approval of the tourism
492	821		attraction project, or
493		-
494	822		(2) the completion date specified in the agreement,
495	823		if the completion date is within three (3) years
496	824		of the date of the final approval of the tourism
497	825		attraction project. However, the term of the
498	826		agreement may be extended for up to two (2)
499	827		additional years by the Executive Director, with
500	828		the advice and consent of the Oklahoma Tax
501	829		Commission, if the Executive Director determines
502	830		that the failure to complete the tourism
503	831		attraction project within three (3) years
504	832		resulted from:
505		-
506	833		(a) unanticipated and unav oidable delay in the
507	834		construction of the tourism attraction
508	835		project,
509		-
510	836		(b) an original completion date for the tourism
511	837		attraction project, as originally planned,
512	838		which will be more than three (3) years from
513	839		the date construction began, or
514		-
515	840		(c) a change in business structure resulting
516	841		from a merger or acquisition,
517		-
518	842		b. in any tax year during which an agreement is in
519	843		effect, if the amount of sales tax to be remitted by
	844	+
	845	+	SB739 HFLR Page 17
	846	+	BOLD FACE denotes Committee Amendments. 1
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	869	+	24
	870	+
520	871		the approved company or an Entertainment District
521	872		Tenant Party, if applicable, exceeds the sales tax
522	873		credit available to the approved company or
523	874		Entertainment District Tenant Party, if applicable,
524	875		then the approved company or Entertainment District
525		-
526		-	ENR. S. B. NO. 739 Page 13
527	876		Tenant Party, if applicable, shall pay the excess to
528	877		this state as sales tax,
529		-
530	878		c. within forty-five (45) days after the end of each
531	879		calendar year the approved company shall supply the
532	880		Executive Director with such reports and
533	881		certifications as the Executive Director may request
534	882		demonstrating to the satisfaction of the Executive
535	883		Director that the approved comp any is in compliance
536	884		with the provisions of the Oklahoma Tourism
537	885		Development Act, and
538		-
539	886		d. the approved company or an Entertainment District
540	887		Tenant Party, if applicable, shall not receive an
541	888		inducement with respect to any calendar year if:
542		-
543	889		(1) with respect to any tourism attraction project
544	890		that is not an Entertainment District in any
545	891		calendar year following the fourth year of the
546	892		agreement, the tourism attraction project fails
547	893		to attract at least fifteen percent (15%) of its
	894	+
	895	+	SB739 HFLR Page 18
	896	+	BOLD FACE denotes Committee Amendments. 1
	897	+	2
	898	+	3
	899	+	4
	900	+	5
	901	+	6
	902	+	7
	903	+	8
	904	+	9
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	909	+	14
	910	+	15
	911	+	16
	912	+	17
	913	+	18
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	915	+	20
	916	+	21
	917	+	22
	918	+	23
	919	+	24
	920	+
548	921		visitors from among persons who ar e not residents
549	922		of this state, or
550		-
551	923		(2) in any calendar year following the first year of
552	924		the project or the tourism attraction project is
553	925		not operating and open to the public on a regular
554	926		and consistent basis, which for a tourism
555	927		attraction project that is a n Entertainment
556	928		District shall mean that a substantial portion of
557	929		the Entertainment District is not operating and
558	930		open to the public on a regular and consistent
559	931		basis.
560		-
561	932		B. The agreement shall not be transferable or assignable by the
562	933		approved company withou t the written consent of the Executive
563	934		Director but, with respect to a tourism attraction project that is
564	935		an Entertainment District, the approved company can elect to pass -
565	936		through all or a portion of the sales tax credit to one or more
566	937		Entertainment Distri ct Tenant Parties in accordance with Section
567	938		2397 of this title.
568		-
569		-
570		-	ENR. S. B. NO. 739 Page 14
571	939		C. If the approved company utilizes or receives inducements
572	940		which are subsequently disallowed then the approved company will be
573	941		liable for the payment to the Tax Commission of an amount equa l to
574	942		(i) all taxes resulting from the disallowance of the inducements
575	943		plus applicable penalties and interest, whether owed by the approved
576	944		company or an Entertainment District Tenant Party to which the
	945	+
	946	+	SB739 HFLR Page 19
	947	+	BOLD FACE denotes Committee Amendments. 1
	948	+	2
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	971	+
577	972		credits have been passed -through in accordance with Se ction 2397 of
578	973		this title, and/or (ii) all incentive payments previously received
579	974		by the approved company, plus applicable penalties and interest.
580	975		Only the approved company originally allowed a sales tax credit
581	976		shall be held liable to make such payments an d not any Entertainment
582	977		District Tenant Party to whom the credit has been passed -through in
583	978		accordance with Section 2397 of this title.
584		-
585	979		D. The Executive Director shall provide a copy of each
586	980		agreement entered into with an approved company to the Tax
587	981		Commission.
588		-
589	982		E. For a tourism attraction project that is an Entertainment
590	983		District and anticipated to have multiple components or phases, the
591	984		Executive Director may enter into more than one agreement with
592	985		different approved companies for the different component s or phases
593	986		of the Entertainment District and such agreements may be entered
594	987		into at different times as though the different components or phases
595	988		of the Entertainment District are their own separate project. In
596	989		such case, the Executive Director shall not be required to obtain a
597	990		separate consultant’s report (referred to in subsection C of Section
598	991		2394 of this title) for each individual component or phase of the
599	992		Entertainment District, but only one consultant’s report for the
600	993		entire Entertainment District.
601	994
	995	+	SB739 HFLR Page 20
	996	+	BOLD FACE denotes Committee Amendments. 1
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	1020	+
602	1021		SECTION 5. AMENDATORY Section 7, Chapter 196, O.S.L.
603	1022		2017, as amended by Section 5, Chapter 443, O.S.L. 2019 (68 O.S.
604	1023		Supp. 2020, Section 2397), is amended to read as follows:
605		-
606	1024		Section 2397. A. Upon receiving notification from the
607	1025		Executive Director of the Oklahoma Tourism and Recreation Department
608	1026		Oklahoma Department of Commerce that an approved company has entered
609	1027		into a tourism project agreement and is entitled to the inducements
610	1028		provided by the Oklahoma Tourism Development Act, the Oklahoma Tax
611	1029		Commission shall provide the approved company with forms and
612		-
613		-	ENR. S. B. NO. 739 Page 15
614	1030		instructions as necessary to claim or receive or pass -through those
615	1031		inducements.
616		-
617	1032		B. An approved company whose agreement provides that it shall
618	1033		expend approved costs of more tha n Five Hundred Thousand Dollars
619	1034		($500,000.00) for a tourism attraction project but less than One
620	1035		Million Dollars ($1,000,000.00) shall be entitled to a sales tax
621	1036		credit if the company certifies to the Tax Commission that it has
622	1037		expended at least the minimu m amount in approved costs, and the
623	1038		Executive Director certifies that the approved company is in
624	1039		compliance with this act the Oklahoma Tourism Development Act . The
625	1040		Tax Commission shall then issue a tax credit memorandum to the
626	1041		approved company granting a sales tax credit in the amount of up to
627	1042		ten percent (10%) of the approved costs, but limited to the percent
628	1043		of the approved costs that will result in the project being revenue -
629	1044		neutral to the State of Oklahoma as determined by the Tax Commission
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	1047	+	BOLD FACE denotes Committee Amendments. 1
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	1068	+	22
	1069	+	23
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	1071	+
630	1072		Oklahoma Department of Commerce . Subsequent requests for credit for
631	1073		additional certified approved costs in excess of the minimum amount
632	1074		for each project as listed in this subsection but less than One
633	1075		Million Dollars ($1,000,000.00) shall result in a sales tax credi t
634	1076		in the amount of up to ten percent (10%) of the approved costs, but
635	1077		limited to the percent of the approved costs that will result in the
636	1078		project being revenue -neutral to the State of Oklahoma as determined
637	1079		by the Tax Commission Oklahoma Department of Com merce. Sales tax
638	1080		credits allowed pursuant to the provisions of this act the Oklahoma
639	1081		Tourism Development Act shall not be transferable or assignable;
640	1082		provided that, with respect to a tourism attraction project that is
641	1083		an Entertainment District, the approv ed company can elect to pass -
642	1084		through all or a portion of the sales tax credit to one or more
643	1085		Entertainment District Tenant Parties. The approved company and the
644	1086		Entertainment District Tenant Party shall jointly file a copy of the
645	1087		written credit pass-through agreement with the Oklahoma Tax
646	1088		Commission within thirty (30) days of the effective date of the
647	1089		agreement. Such filing of the agreement with the Oklahoma Tax
648	1090		Commission shall perfect such agreement. The written agreement
649	1091		shall contain the name, addres s and taxpayer identification number
650	1092		of the parties to the agreement, the amount of credit being passed -
651	1093		through, the month and year the credit was originally allowed to the
652	1094		approved company, the month and tax year or years for which the
653	1095		credit may be claimed, and a representation by the approved company
	1096	+
	1097	+	SB739 HFLR Page 22
	1098	+	BOLD FACE denotes Committee Amendments. 1
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	1122	+
654	1123		that the approved company has neither claimed for its own behalf nor
655	1124		conveyed such credits to any other Entertainment District Tenant
656		-
657		-	ENR. S. B. NO. 739 Page 16
658	1125		Party. The Tax Commission shall develop a standard form for use by
659	1126		an approved company and an Entertainment District Tenant Party
660	1127		demonstrating eligibility for the Entertainment District Tenant
661	1128		Party to utilize the sales tax credit. The Tax Commission shall
662	1129		develop a system to record and track the pass -through of the sales
663	1130		tax credit and certify the ownership of the sales tax credit and may
664	1131		promulgate rules to permit verification of the validity and
665	1132		timeliness of a sales tax credit claimed upon a sales tax return
666	1133		pursuant to this subsection but shall not promulgate any rules w hich
667	1134		unduly restrict or hinder the pass -through of such sales tax credit
668	1135		to an Entertainment District Tenant Party.
669		-
670	1136		An approved company whose agreement provides that it shall
671	1137		expend approved costs in excess of One Million Dollars
672	1138		($1,000,000.00) shall be e ntitled to a sales tax credit if the
673	1139		company certifies to the Tax Commission that it has expended at
674	1140		least One Million Dollars ($1,000,000.00) in approved costs and the
675	1141		Executive Director certifies that the approved company is in
676	1142		compliance with this act the Oklahoma Tourism Development Act . The
677	1143		Tax Commission shall then issue a tax credit memorandum to the
678	1144		approved company granting a sales tax credit in the amount of up to
679	1145		twenty-five percent (25%) of the approved costs, but limited to the
680	1146		percent of the approved costs that will result in the project being
	1147	+
	1148	+	SB739 HFLR Page 23
	1149	+	BOLD FACE denotes Committee Amendments. 1
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	1172	+	24
	1173	+
681	1174		revenue-neutral to the State of Oklahoma as determined by the Tax
682	1175		Commission Oklahoma Department of Commerce . The credit on all
683	1176		subsequent additional certified approved costs shall be in the
684	1177		amount of up to twenty-five percent (25%) of the costs, but limited
685	1178		to the percent of the approved costs that will result in the project
686	1179		being revenue-neutral to the State of Oklahoma as determined by the
687	1180		Tax Commission Oklahoma Department of Commerce . For a tourism
688	1181		attraction project that is an Entertainment District, an approved
689	1182		company may elect to receive an incentive payment based on sales tax
690	1183		collections of Entertainment District Tenant Parties rather than a
691	1184		sales tax credit. The incentive payment shall be in the amount of
692	1185		up to twenty-five percent (25%) of the approved costs but limited to
693	1186		the percent of the approved costs that will result in the project
694	1187		being revenue-neutral to the State of Oklahoma as determined by the
695	1188		Tax Commission Oklahoma Department of C ommerce; provided that, (A)
696	1189		in no event shall the incentive payments exceed the increased state
697	1190		sales tax liability of the approved company and the Entertainment
698	1191		District Tenant Parties that is actually received by the Tax
699	1192		Commission, and (B) the approved company shall be entitled to
700		-
701		-	ENR. S. B. NO. 739 Page 17
702	1193		receive only ten percent (10%) of the incentive payment amount
703	1194		during each calendar year. The Tax Commission shall issue an
704	1195		incentive payment memorandum to the approved company granting a
705	1196		right to receive an incentive payment from the Tax Commission in the
706	1197		amount of up to twenty -five percent (25%) of the approved costs but
	1198	+
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	1200	+	BOLD FACE denotes Committee Amendments. 1
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707	1225		limited to the percent of the approved costs that will result in the
708	1226		project being revenue -neutral to the State of Oklahoma as determined
709	1227		by the Tax Commission Oklahoma Department of Commerce . As soon as
710	1228		practicable after the end of each calendar year during the term of
711	1229		the agreement, the approved company shall file a claim for the
712	1230		incentive payment with the Tax Commission, and the Tax Commission
713	1231		shall be responsible for ensuring that the amount of the incentive
714	1232		payment claimed does not exceed the increased state sales tax
715	1233		liability of the approved company and the Entertainment District
716	1234		Tenant Parties that has been actually received by the Tax
717	1235		Commission, which may include accessing the Oklahoma sales tax
718	1236		returns of the Entertainment District Tenant Parties as permitted by
719	1237		this section.
720		-
721	1238		The cumulative inducements provided pursuant to this act the
722	1239		Oklahoma Tourism Development Act shall not exceed Fifteen Million
723	1240		Dollars ($15,000,000.00) per year.
724		-
725	1241		The Tax Commission shall require proof of expenditures prior to
726	1242		issuing a tax credit memorandum or incentive payment memorandum to
727	1243		the approved company which may be satisfied by a report from an
728	1244		independent certified pub lic accountant. Additional credit
729	1245		memoranda or incentive memoranda may be issued as the approved
730	1246		company certifies additional expenditures of approved costs.
731		-
732	1247		No tax credit memorandum or incentive payment memorandum shall
733	1248		be issued for any approved costs e xpended after the expiration of
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	1251	+	BOLD FACE denotes Committee Amendments. 1
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734	1276		three (3) years from the date the agreement was signed by the
735	1277		Executive Director and the approved company. However, the Executive
736	1278		Director, with the advice and consent of the Tax Commission, may
737	1279		authorize inducements for ap proved costs expended up to five (5)
738	1280		years from the date the agreement was signed if the Executive
739	1281		Director determines that the failure to complete the tourism
740	1282		attraction project within three (3) years resulted from:
741		-
742	1283		1. Unanticipated and unavoidable delay in the construction of
743	1284		the tourism attraction;
744		-
745		-	ENR. S. B. NO. 739 Page 18
746		-
747	1285		2. An original completion date for the tourism attraction, as
748	1286		originally planned, which will be more than three (3) years from the
749	1287		date construction began; or
750		-
751	1288		3. A change in business ownership or business s tructure
752	1289		resulting from a merger or acquisition.
753		-
754	1290		C. A sales tax credit allowed pursuant to the provisions of
755	1291		this section may be used to offset a portion of the reported state
756	1292		sales tax liability of the approved company or an Entertainment
757	1293		District Tenant Party, if applicable, for all sales tax reporting
758	1294		periods following the issuance of the credit memorandum subject to
759	1295		the following limitations:
760		-
761	1296		1. Only increased state sales tax liability may be offset by
762	1297		the issued credit;
763		-
764	1298		2. An approved company whose agreement provides that it shall
765	1299		expend approved costs in excess of One Million Dollars
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	1302	+	BOLD FACE denotes Committee Amendments. 1
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766	1327		($1,000,000.00) or an Entertainment District Party, if applicable,
767	1328		shall be entitled to use only ten percent (10%) of the amount of
768	1329		each issued credit to offset increas ed state sales tax liability
769	1330		during each calendar year, plus the amount of any unused credit
770	1331		carried forward from a prior calendar year, and an approved company
771	1332		whose agreement provides that it shall expend approved costs of more
772	1333		than the minimum amount fo r each project as listed in this
773	1334		subsection but less than One Million Dollars ($1,000,000.00) shall
774	1335		be entitled to use only twenty percent (20%) of the amount of each
775	1336		issued credit to offset increased state sales tax liability during
776	1337		each calendar year, pl us the amount of any unused credit carried
777	1338		forward from a prior calendar year; and
778		-
779	1339		3. All issued credit memoranda or incentive payment memorandum
780	1340		shall expire at the end of the month following the expiration of the
781	1341		agreement as provided in Section 2396 of this title.
782		-
783	1342		The approved company or an Entertainment District Tenant Party,
784	1343		if applicable, shall have no obligation to refund or otherwise
785	1344		return any amount of this inducement to the person from whom the
786	1345		sales tax was collected.
787		-
788		-
789		-	ENR. S. B. NO. 739 Page 19
790	1346		D. The Tax Commission sha ll promulgate rules as are necessary
791	1347		for the proper administration of the Oklahoma Tourism Development
792	1348		Act. The Tax Commission may also develop forms and instructions as
793	1349		necessary for an approved company or Entertainment District Tenant
794	1350		Party, if applicable, to claim or receive or pass -through the
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	1353	+	BOLD FACE denotes Committee Amendments. 1
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795	1378		inducements provided by this act the Oklahoma Tourism Development
796	1379		Act.
797		-
798	1380		E. The Tax Commission shall have the authority to obtain any
799	1381		information necessary from or regarding the approved company or an
800	1382		Entertainment District Tenant Party, if applicable, and the
801	1383		Executive Director to verify that approved companies or an
802	1384		Entertainment District Tenant Party, if applicable, have received
803	1385		the proper amounts of inducements as authorized by this act the
804	1386		Oklahoma Tourism Development Act. The Oklahoma Tax Commission shall
805	1387		demand the repayment of any inducements taken or received in excess
806	1388		of the inducements allowed by this act.
807		-
808	1389		F. No sales tax credit or incentive payment right authorized by
809	1390		this section shall be granted on or after January 1, 2026.
810	1391		Notwithstanding the foregoing, an approved company that has entered
811	1392		into a tourism attraction project agreement with the Oklahoma
812	1393		Tourism and Recreation Department Oklahoma Department of Commerce
813	1394		pursuant to Section 2396 of this title prior to January 1, 2026,
814	1395		shall continue to be entitled to claim or receive any inducements
815	1396		authorized by this section as contemplated by the tourism project
816	1397		agreement.
817		-
818	1398		G. All currently approved tourism project agreements executed
819	1399		by the Oklahoma Tourism and Recreation Department are hereby
820	1400		transferred to the Oklahoma Department of Commerce upon the
821	1401		effective date of this act.
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822	1428
823	1429		H. On the effective date of this act, all administrative rules
824	1430		promulgated by the Oklahoma Tourism and Recreation Department
825	1431		regarding the Oklahoma Tourism Development Act shall be transferred
826	1432		to and become a part of the administrative rules of the Oklahoma
827	1433		Department of Commerce. The Office of Administrative Rules in the
828	1434		Office of the Secretary of State shall provide adequate notice in
829	1435		the Oklahoma Register of the transferred rules and shall place the
830	1436		transferred rules under the Administrative Code section of the
831	1437		Oklahoma Department of Commerce. On the effective date of this act,
832		-
833		-	ENR. S. B. NO. 739 Page 20
834	1438		any amendment, repeal or addition to the trans ferred rules shall be
835	1439		under the jurisdiction of the Oklahoma Department of Commerce, who
836	1440		shall have the authority to enact rules in order to carry out the
837	1441		provisions of the Oklahoma Tourism Development Act.
838		-
839	1442		SECTION 6. This act shall become effective November 1, 2021.
840	1443
841		-
842		-	ENR. S. B. NO. 739 Page 21
843		-	Passed the Senate the 9th day of March, 2021.
844		-
845		-
846		-
847		-	Presiding Officer of the Senate
848		-
849		-
850		-	Passed the House of Representatives the 14th day of April, 2021.
851		-
852		-
853		-
854		-	Presiding Officer of the House
855		-	of Representatives
856		-
857		-	OFFICE OF THE GOVERNOR
858		-	Received by the Office of the Governor this _______ _____________
859		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
860		-	By: _______________________________ __
861		-	Approved by the Governor of the State of Oklahoma this _________
862		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
863		-
864		-	_________________________________
865		-	Governor of the State of Oklahoma
866		-
867		-
868		-	OFFICE OF THE SECRETARY OF STATE
869		-	Received by the Office of the Secretary of State this __________
870		-	day of __________________, 20 _______, at _______ o'clock _______ M.
871		-	By: _______________________________ __
	1444	+	COMMITTEE REPORT BY: COMMITTEE ON TOURISM, dated 04/01/2021 - DO
	1445	+	PASS.