OK
Oklahoma Senate Bill SB936

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB936 Compare Versions

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28-ENGROSSED HOUSE AMENDME NTS
29- TO
30-ENGROSSED SENATE BILL NO . 936 By: Leewright and Hall of the
3+SB936 HFLR Page 1
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29+HOUSE OF REPRESENTATIVES - FLOOR VERSION
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31+STATE OF OKLAHOMA
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33+1st Session of the 58th Legislature (2021)
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35+ENGROSSED SENATE
36+BILL NO. 936 By: Leewright and Hall of the
3137 Senate
3238
3339 and
3440
3541 Wallace of the House
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3643
3744
3845
3946
4047 An Act relating to quality jobs; amending 68 O.S.
4148 2011, Sections 3602, 3603, as last amended by Section
4249 1, Chapter 156, O.S.L. 2018, 3604, as last amended by
4350 Section 2, Chapter 144, O.S.L. 2018, 3605, 3606, as
4451 last amended by Section 1, Chapter 138, O.S.L. 2020
4552 and 3607, as amended by Section 26, Chapt er 227,
4653 O.S.L. 2013 (68 O.S. Supp. 2020, Sections 3603, 3604,
4754 3606 and 3607), which relates to the Oklahoma Quality
4855 Jobs Program Act; modifying intent; modifying
4956 definitions; creating definitions; authorizing
5057 utilization of compound net benefit rate; requi ring
5158 minimum net benefit rate; removing member of
5259 Incentive Approval Committee for basic industry
5360 establishments; eliminating quarterly incentive
5461 payments for certain establishments; adding compound
5562 net benefit rate to payment formula; removing
5663 exception; modifying wage requirement; prohibiting
5764 certain payments from wage requirement; removing tax
5865 liability requirement; removing average working hours
5966 requirement; requiring establishment to meet certain
6067 payroll and jobs threshold before receiving payment;
6168 requiring prior payments paid upon meeting certain
6269 threshold; providing minimum payroll and job
6370 requirements for certain qualification; removing
6471 certain payroll requirements for qualification;
6572 removing certain wage requirements for qualification
6673 after certain date; removing exception for certain
6774 negative economic event; authorizing political
6875 subdivision to apply for and receive payments for
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69103 attracting and developing certain facility for
70104 certain term; limiting certain payments; providing
71105 minimum payroll require ments for qualified federal
72106 facility; removing determination requirement for
73107 certain net benefits; removing limit for certain
74108 incentive payment; requiring utilization of
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101109 cost/benefit analysis to determine certain benefit,
102110 rate and payment; removing repayme nt requirement for
103111 certain cessation of operations; requiring repayment
104112 of incentives for certain relocation within a
105113 provided timeframe; deleting certain fund deposit
106114 formula; requiring deposit according to estimate
107115 provided by Oklahoma Tax Commission; pr ohibiting
108116 payments in excess of certain state benefits for
109117 certain establishments; prohibiting application for
110118 additional payments until certain job creation or
111119 payroll thresholds are met; removing outdated and
112120 repealed statutory references; updating statu tory
113121 references; clarifying statutory language; repealing
114122 68 O.S. 2011, Sections 3501, 3502, 3503, 3504, 3505,
115123 3506, 3507 and 3508, which relate to the Oklahoma
116124 Federal Facilities Development Act; repealing 68 O.S.
117125 2011, Sections 3604.1, as amended by Sect ion 25,
118126 Chapter 227, O.S.L. 2013, 3611 and 3612 (68 O.S.
119127 Supp. 2020, Section 3604.1) , which relate to the
120128 Oklahoma Quality Jobs Program Act; repealing 68 O.S.
121129 2011, Sections 3801, 3802, 3803, 3804, 3805, 3806,
122130 3807 and 3808, which relate to the Former Mili tary
123131 Facility Development Act; repealing 68 O.S. 2011,
124132 Sections 3901, 3902, 3903, as last amended by Section
125133 1, Chapter 128, O.S.L. 2014, 3904, as last amended by
126134 Section 1, Chapter 197, O.S.L. 2019, 3905, 3906,
127135 3907, 3908, 3909 and 3910 (68 O.S. Supp. 2020,
128136 Sections 3903 and 3904) , which relate to Small
129137 Employer Quality Jobs Incentive Act; repealing 68
130138 O.S. 2011, Sections 3911, 3912, 3913, 3914, as last
131139 amended by Section 4, Chapter 144, O.S.L. 2018, 3915,
132140 3916, 3917, 3918, 3919 and 3920 (68 O.S. Supp. 2020,
133141 Section 3914), which relate to the 21st Century
134142 Quality Jobs Incentive Act; and providing an
135143 effective date.
136144
137145
138146
139147
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141-AMENDMENT NO. 1. Page 40, Lines 18-19, delete the words and figure
142-"three hundred thousand (300,000)" and insert the
143-words and figure "one hundred twenty thousand
144-(120,000)"
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173-AMENDMENT NO. 2. Page 40, Line 22, delete the words and figure
174-"three hundred thousand (300,000) " and insert the
175-words and figure "one hundred twenty thousand
176-(120,000)"
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179-AMENDMENT NO. 3. Page 45, Line 1, after the comma and words " county
180-wage," insert the following language:
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182- "with the exception of Tier 5 counties which shall
183-be governed by the requirement that the
184-establishment pay employees in new direct jobs the
185-average county wage as defined by paragraph 24 of
186-Section 3603 of this title, "
187-
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189-AMENDMENT NO. 4. Page 46, Line 13, delete the words and figure " Two
190-Million Five Hundred Thousand Dollars
191-($2,500,000.00)" and insert the words and figure
192-"Three Million Three Hundred Seventy -five Thousand
193-Dollars ($3,375,000.00 )"
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197-AMENDMENT NO. 5. Page 54, Line 14, delete the words and figure "Two
198-Million Five Hundred Thousand Dollars
199-($2,500,000.00)" and insert the words and figure
200-"Three Million Three Hundred Seventy -five Thousand
201-Dollars ($3,375,000. 00)"
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203-and amend title to conform
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231-Passed the House of Representatives the 22nd day of April, 2021.
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237-Presiding Officer of the House of
238- Representatives
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241-Passed the Senate the ____ day of __________, 2021.
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247-Presiding Officer of the Senate
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250-ENGR. S. B. NO. 936 Page 1 1
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275-ENGROSSED SENATE
276-BILL NO. 936 By: Leewright and Hall of the
277-Senate
278-
279- and
280-
281- Wallace of the House
282-
283-
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285-
286-
287-An Act relating to quality jobs; amending 68 O.S.
288-2011, Sections 3602, 3603, as last amended by Section
289-1, Chapter 156, O.S.L. 2018, 3604, as last amended by
290-Section 2, Chapter 144, O.S.L. 2018, 3605, 3606, as
291-last amended by Section 1, Chapter 138, O.S.L. 2020
292-and 3607, as amended by Section 26, Chapter 227,
293-O.S.L. 2013 (68 O.S. Supp. 2020, Sections 3603, 3604,
294-3606 and 3607), which relates to the Oklahoma Quality
295-Jobs Program Act; modifying intent; modifying
296-definitions; creating definitions; author izing
297-utilization of compound net benefit rate; requiring
298-minimum net benefit rate; removing member of
299-Incentive Approval Committee for basic industry
300-establishments; eliminating quarterly incentive
301-payments for certain establishments; adding compound
302-net benefit rate to payment formula; removing
303-exception; modifying wage requirement; prohibiting
304-certain payments from wage requirement; removing tax
305-liability requirement; removing average working hours
306-requirement; requiring establishment to meet certain
307-payroll and jobs threshold before receiving payment;
308-requiring prior payments paid upon meeting certain
309-threshold; providing minimum payroll and job
310-requirements for certain qualification; removing
311-certain payroll requirements for qualification;
312-removing certain wage requirements for qualification
313-after certain date; removing exception for certain
314-negative economic event; authorizing political
315-subdivision to apply for and receive payments for
316-attracting and developing certain facility for
317-certain term; limitin g certain payments; providing
318-minimum payroll requirements for qualified federal
319-facility; removing determination requirement for
320-certain net benefits; removing limit for certain
321-incentive payment; requiring utilization of
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348-cost/benefit analysis to determin e certain benefit,
349-rate and payment; removing repayment requirement for
350-certain cessation of operations; requiring repayment
351-of incentives for certain relocation within a
352-provided timeframe; deleting certain fund deposit
353-formula; requiring deposit accordin g to estimate
354-provided by Oklahoma Tax Commission; prohibiting
355-payments in excess of certain state benefits for
356-certain establishments; prohibiting application for
357-additional payments until certain job creation or
358-payroll thresholds are met; removing outda ted and
359-repealed statutory references; updating statutory
360-references; clarifying statutory language; repealing
361-68 O.S. 2011, Sections 3501, 3502, 3503, 3504, 3505,
362-3506, 3507 and 3508, which relate to the Oklahoma
363-Federal Facilities Development Act; repeal ing 68 O.S.
364-2011, Sections 3604.1, as amended by Section 25,
365-Chapter 227, O.S.L. 2013, 3611 and 3612 (68 O.S.
366-Supp. 2020, Section 3604.1), which relate to the
367-Oklahoma Quality Jobs Program Act; repealing 68 O.S.
368-2011, Sections 3801, 3802, 3803, 3804, 3805, 3806,
369-3807 and 3808, which relate to the Former Military
370-Facility Development Act; repealing 68 O.S. 2011,
371-Sections 3901, 3902, 3903, as last amended by Section
372-1, Chapter 128, O.S.L. 2014, 3904, as last amended by
373-Section 1, Chapter 197, O.S.L. 2019, 390 5, 3906,
374-3907, 3908, 3909 and 3910 (68 O.S. Supp. 2020,
375-Sections 3903 and 3904), which relate to Small
376-Employer Quality Jobs Incentive Act; repealing 68
377-O.S. 2011, Sections 3911, 3912, 3913, 3914, as last
378-amended by Section 4, Chapter 144, O.S.L. 2018, 391 5,
379-3916, 3917, 3918, 3919 and 3920 (68 O.S. Supp. 2020,
380-Section 3914), which relate to the 21st Century
381-Quality Jobs Incentive Act; and providing an
382-effective date.
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388149 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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389177 SECTION 1. AMENDATORY 68 O.S. 2011, Section 3602, is
390178 amended to read as follows:
391179 Section 3602. It is the intent of the Legislature that:
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418180 1. a. The State of Oklahoma provide appropriate incentives
419181 to support establishments of basic industries that
420182 hold the promise of significant development of the
421183 economy of the State of Oklahoma, and
422184 b. to assist political subdivisions in attracting federal
423185 facility development and consequent job creation and
424186 ancillary economic growth within this state. In order
425187 to achieve these essential public purposes, it is
426188 necessary to assist and encourage political
427189 subdivisions to develop facilities for use by the
428190 federal government;
429191 2. The amount of incentives provided pursuant to this act in
430192 connection with a particular establishment:
431193 a. be directly related to the jobs created as a resul t of
432194 the establishment locating in the State of Oklahoma,
433195 and
434196 b. not exceed the estimated net direct state benefits
435197 that will accrue to the state as a result of the
436198 establishment locating or expanding in the State of
437199 Oklahoma;
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438227 3. The Oklahoma Department o f Commerce and the Oklahoma Tax
439228 Commission implement the provisions of this act and exercise all
440229 powers as authorized in this act. The exercise of powers conferred
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467230 by this act shall be deemed and held to be the performance of
468231 essential public purposes; an d
469232 4. Nothing herein shall be construed to constitute a guarantee
470233 or assumption by the State of Oklahoma of any debt of any
471234 individual, company, corporation or association nor to authorize the
472235 credit of the State of Oklahoma to be given, pledged or loaned to
473236 any individual, company, corporation or association.
474237 SECTION 2. AMENDATORY 68 O.S. 2011, Section 3603, as
475238 last amended by Section 1, Chapter 156, O.S.L. 2018 (68 O.S. Supp.
476239 2020, Section 3603), is amended to read as follows:
477240 Section 3603. A. As used in the Oklahoma Quality Jobs Program
478241 Act:
479242 1. a. “Basic industry” means:
480243 (1) those manufacturing activities defined or
481244 classified in the NAICS Manual under Industry
482245 Sector Nos. 31, 32 and 33, Industry Group No.
483246 5111 or Industry No. 11331,
484247 (2) those electric power generation, transmission and
485248 distribution activities defined or classified in
486249 the NAICS Manual under U.S. Industry Nos. 221111
487250 through 221122, if:
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488278 (a) an establishment engaged therein qualifies
489279 as an exempt wholesale genera tor as defined
490280 by 15 U.S.C., Section 79z -5a,
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517281 (b) the exempt wholesale generator facility
518282 consumes from sources located within the
519283 state at least ninety percent (90%) of the
520284 total energy used to produce the electrical
521285 output which qualifies for the speciali zed
522286 treatment provided by the Energy Policy Act
523287 of 1992, P.L. 102-486, 106 Stat. 2776, as
524288 amended, and federal regulations adopted
525289 pursuant thereto,
526290 (c) the exempt wholesale generator facility
527291 sells to purchasers located outside the
528292 state for consumption i n activities located
529293 outside the state at least ninety percent
530294 (90%) of the total electrical energy output
531295 which qualifies for the specialized
532296 treatment provided by the Energy Policy Act
533297 of 1992, P.L. 102-486, 106 Stat. 2776, as
534298 amended, and federal regula tions adopted
535299 pursuant thereto, and
536300 (d) the facility is constructed on or after July
537301 1, 1996 those health care activities
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538329 including medical and diagnostic laboratory
539330 activities defined or classified in the
540331 NAICS Manual under Industry Group No. 6215,
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567332 miscellaneous ambulatory health care
568333 services defined as Industry Group No.
569334 621999, and specialty hospitals, except
570335 psychiatric and substance abuse hospitals,
571336 in the NAICS Manual under U.S. Industry
572337 Group No. 62231,
573338 (3) those administrative and facilities suppor t
574339 service activities defined or classified in the
575340 NAICS Manual under Industry Group Nos. 5611 and
576341 5612, Industry Nos. 51821, 519130, 52232 and
577342 56142 or U.S. Industry Nos. 524291 and 551114,
578343 those other support activities for air
579344 transportation defined or c lassified in the NAICS
580345 Manual under Industry Group No. 488190, and those
581346 support, repair, and maintenance service
582347 activities for the wind industry defined or
583348 classified in the NAICS Manual under Industry
584349 Group No. 811310 and those management of
585350 companies and enterprises defined of classified
586351 under Industry Group No. 5511 ,
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587379 (4) those professional, scientific and technical
588380 service activities defined or classified in the
589381 NAICS Manual under U.S. Industry Nos. 541710 and
590382 541380 5413, 5415, 5416 and 5417,
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617383 (5) distribution centers for retail or wholesale
618384 businesses defined or classified in the NAICS
619385 Manual under Sector No. 42 and warehousing and
620386 storage businesses defined or classified in the
621387 NAICS Manual under Sector No. 493 , if forty
622388 percent (40%) or more of the i nventory processed
623389 through such distribution center or warehouse is
624390 shipped out-of-state,
625391 (6) those adjustment and collection service
626392 activities defined or classified in the NAICS
627393 Manual under U.S. Industry No. 561440, if
628394 seventy-five percent (75%) of the loans to be
629395 serviced were made by out -of-state debtors those
630396 information technology and other computer related
631397 service activities defined or classified in the
632398 NAICS Manual under Industry Group Nos. 5112, 518
633399 and 519,
634400 (7) (a) those air transportation activi ties defined
635401 or classified in the NAICS Manual under
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636429 Industry Group No. 4811, if the following
637430 facilities are located in this state:
638431 (i) the corporate headquarters of an
639432 establishment classified therein, and
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666433 (ii) a facility or facilities at which
667434 reservations for transportation
668435 provided by such an establishment are
669436 processed, whether such services are
670437 performed by employees of the
671438 establishment, by employees of a
672439 subsidiary of or other entity
673440 affiliated with the establishment or by
674441 employees of an entity wi th whom the
675442 establishment has contracted for the
676443 performance of such services; provided,
677444 this provision shall not disqualify an
678445 establishment which uses an out -of-
679446 state entity or employees for some
680447 reservations services, or
681448 (b) those air transportation act ivities defined
682449 or classified in the NAICS Manual under
683450 Industry Group No. 4811, if an establishment
684451 classified therein has or will have within
685452 one (1) year sales of at least seventy -five
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686480 percent (75%) of its total sales, as
687481 determined by the Incentive App roval
688482 Committee pursuant to the provisions of
689483 subsection B of this section, to out -of-
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715-
716484 state customers or buyers, to in -state
717485 customers or buyers if the product or
718486 service is resold by the purchaser to an
719487 out-of-state customer or buyer for ultimate
720488 use, or to the federal government those
721489 credit bureaus defined or classified in the
722490 NAICS Manual under U.S. Industry No. 56145 ,
723491 (8) flight training services and apprenticeship
724492 program activities defined or classified in the
725493 NAICS Manual under U.S. Industry Group No. Nos.
726494 611512 and 611513, which for purposes of the
727495 Oklahoma Quality Jobs Program Act shall include
728496 new direct jobs for which gross payroll existed
729497 on or after January 1, 2003, as identified in the
730498 NAICS Manual,
731499 (9) the following, if an establishment located in a
732500 Tier 4 County or a Tier 5 County and classified
733501 therein has or will have within one (1) year
734502 sales of at least seventy -five percent (75%) of
735503 its total sales twenty-four (24) months of the
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736531 date of application, as determined by the
737532 Oklahoma Department of Commerce, sales of at
738533 least forty percent (40%) for the first two (2)
739534 years and subsequently sixty percent (60%) of its
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766535 total sales, or if an establishment located in a
767536 Tier 3 County and classified therein has or will
768537 have within twenty-four (24) months of the date
769538 of application, as determined by the Department,
770539 sales of at least thirty -five percent (35%) for
771540 the first two (2) years and subsequently fifty -
772541 five percent (55%) of its total sales, or if an
773542 establishment located in a Tier 1 County or Tier
774543 2 County and classified therein has or will have
775544 within twenty-four (24) months of the date of
776545 application, as determined by the Department,
777546 sales of at least twenty -five percent (25%) for
778547 the first two (2) years and subsequently fifty
779548 percent (50%) of its total sales, as determined
780549 by the Incentive Approval Committee pursuant to
781550 the provisions of subsection B of this section,
782551 to out-of-state customers or buyers, to in -state
783552 customers or buyers if the product or service is
784553 resold by the purchaser to an out -of-state
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785581 customer or buyer for ultimate use, or to the
786582 federal government:
787583 (a) those transportation and warehousing
788584 activities defined or classified in the
789585 NAICS Manual under Industry Subsector No.
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816586 493, if not otherwise listed in this
817587 paragraph, Industry Subsector Nos. 482 and
818588 484 and Industry Group Nos. 4884 through
819589 4889 481, 482, 483, 484 and 488 ,
820590 (b) those passenger transportation activities
821591 travel arrangement services defined or
822592 classified in the NAICS Manual under
823593 Industry Nos. 561510 and 561599 5615 and
824594 56192,
825595 (c) those freight or cargo transportation
826596 activities defined or classified in the
827597 NAICS Manual under Industry No. 541614,
828598 (d) those insurance activities defined or
829599 classified in the NAICS Manual under
830600 Industry Group No. 5241,
831601 (e) those services to dwellings and other
832602 buildings, as defined or classified in the
833603 NAICS Manual under Industry Group No. 5617,
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834631 excluding U.S. Industry Nos. 561730, 56171,
835632 56172, 56174 and 56179 ,
836633 (f) those equipment rental and leasing
837634 activities defined or classified in the
838635 NAICS Manual under Industry Group No. 5324,
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865636 (g) those information technology and other
866637 computer-related service activities defined
867638 or classified in the NAICS Manual under
868639 Industry Group Nos. 5112, 5182, 5191 and
869640 5415 those securities, commodity contracts
870641 and other financial investment activities
871642 defined or classified in the NAICS Manual
872643 under U.S. Industry Group No. 523 ,
873644 (d) those insurance carriers and related
874645 activities defined or classified in the
875646 NAICS Manual under U.S. Industry Group No.
876647 524,
877648 (e) those funds, trusts and other financial
878649 vehicles defined or classified in the NAICS
879650 Manual under U.S. Industry Group No. 525 ,
880651 (f) those financial and credit intermediation
881652 activities defined or classified in the
882653 NAICS Manual under Industry Group Nos.
883654 522210, 522293, 522294, and 522320,
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884682 (g) those heavy and civil engineering
885683 construction activities defined or
886684 classified in the NAICS Manual under U.S.
887685 Industry Group No. 237 ,
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914686 (h) those business support service activities
915687 defined or classified in the NAICS Manual
916688 under U.S. Industry Nos. 561410 through
917689 561430, excluding 56143, 561422 and Industry
918690 No. 51911,
919691 (i) those medical and diagnostic laboratory
920692 activities defined or classified in the
921693 NAICS Manual under Industry Group No. 6215,
922694 (j) those professional, scientific and technical
923695 service activities defined or classified in
924696 the NAICS Manual under Industry Group Nos.
925697 5412, 5414, 5415, 5416 and 5417, Industry
926698 Nos. 54131, 54133, 54136 and 54137, and U.S.
927699 Industry No. 541990, if not otherwise listed
928700 in this paragraph those electric utility
929701 activities defined or classified in the
930702 NAICS Manual under U.S. Industry Group No.
931703 2211,
932704 (j) those professional, scientific and technical
933705 services defined or classified in the NAICS
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934733 Manual under U.S. Industry Group Nos. 5411,
935734 5412, 5414, 5418 and 5419,
936735 (k) those communication telecommunication
937736 service activities defined or classified in
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964737 the NAICS Manual under Industry Nos. 51741
965738 and 51791 No. 517,
966739 (l) those refuse systems activities defined or
967740 classified in the NAICS Manual under
968741 Industry Group No. 5622, provided that the
969742 establishment is primarily engaged in the
970743 capture and distribution of methane gas
971744 produced within a landfill,
972745 (m) general wholesale distribution of groceries,
973746 defined or classified in the NAICS Manual
974747 under Industry Group Nos. 4244 and 4245,
975748 (n) those activities relating to processing of
976749 insurance claims, defined or classified in
977750 the NAICS Manual under U.S. Industry Nos.
978751 524210 and 524292; provided, activities
979752 described in U.S. Industry Nos. 524210 and
980753 524292 in the NAICS Manual other than
981754 processing of insurance claims shall not be
982755 included for purposes of this subdivision,
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983783 (o) those agricultural activities classified in
984784 the NAICS Manual under U.S. Industry Nos.
985785 112120 and 112310 those real estate or
986786 brokerage activities c lassified in the NAICS
987787 Manual under U.S. Industry No. 53120 for
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1014788 which at least seventy -five percent (75%) of
1015789 the establishment’s revenues are attributed
1016790 to out-of-state sales and at least seventy -
1017791 five percent (75%) of the real estate
1018792 transactions generatin g those revenues are
1019793 attributed to real property located outside
1020794 this state,
1021795 (n) those adjustment and collection service
1022796 activities defined or classified in the
1023797 NAICS Manual under U.S. Industry No. 561440,
1024798 if seventy-five percent (75%) of the loans
1025799 to be serviced were made by out -of-state
1026800 debtors,
1027801 (p)
1028802 (o) those business associations and professional
1029803 organization activities classified in the
1030804 NAICS Manual under U.S. Industry No. Nos.
1031805 813910 and 813920,
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1032833 (q) alternative energy structure construction
1033834 classified in the NAICS Manual under U.S.
1034835 Industry No. 237130,
1035836 (r)
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1062837 (p) solar reflective coating application
1063838 classified in the NAICS Manual under U.S.
1064839 Industry No. 238160, and
1065840 (s)
1066841 (q) solar heating equipment installation
1067842 classified in the NAICS Manual under U.S.
1068843 Industry No. 238220,
1069844 (t) those wired telecommunications carriers
1070845 classified in the NAICS Manual under U.S.
1071846 Industry No. 517110, and
1072847 (u) those securities, commodity contracts and
1073848 investment activities classified in the
1074849 NAICS Manual under Industry Subsector No.
1075850 523,
1076851 (10) those activities related to extraction or
1077852 pipeline transportation of petroleum, natural gas
1078853 or refined petroleum products, defined or
1079854 classified in the NAICS Manual under Industry
1080855 Group No. 2111, 213111, 213112 or 486, subject to
1081856 the limitations provided in paragraph 3 of this
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1082884 subsection and paragraph 3 of subsection B of
1083885 this section,
1084886 (11) those activities performed by the federal
1085887 civilian workforce at a facility of the Federal
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1112888 Aviation Administration located in this state if
1113889 the Director of the Oklahoma Department of
1114890 Commerce determines or is notified that the
1115891 federal government is soliciting proposals or
1116892 otherwise inviting states to compete for
1117893 additional federal civilian employment or
1118894 expansion of federal civilian employment at such
1119895 facilities,
1120896 (12) those activities defined or classified in the
1121897 NAICS Manual under U.S. Industry No. 711211 ( 2007
1122898 2017 version),
1123899 (13) those real estate or brokerage activities
1124900 classified in the NAICS Manual under U.S.
1125901 Industry No. 53120 for which at least seventy -
1126902 five percent (75%) of the establishment ’s
1127903 revenues are attributed to out -of-state sales and
1128904 at least seventy-five percent (75%) of the real
1129905 estate transactions generating those revenues are
1130906 attributed to real property located outside the
1131907 State of Oklahoma, or those performing arts
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1132935 companies defined or classified in the NAICS
1133936 Manual under U.S. Industry Group No. 7111,
1134937 (14) those support activities for rail transportation
1135938 and those support activities for water
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1162939 transportation defined or classified in the NAICS
1163940 Manual under U.S. Industry Nos. 4882 and 4883 ,
1164941 (15) those motion picture and video industries defined
1165942 or classified in the NAICS Manual under U.S.
1166943 Industry Group No. 5121, and those sound
1167944 recording industries defined or classified in the
1168945 NAICS Manual under U .S. Industry Group No. 5122,
1169946 and those employees of film support industries
1170947 classified in the NAICS Manual under U.S.
1171948 Industry Group Nos. 7114, 7115 and 236220 when
1172949 contracting with a film studio or film production
1173950 located in this state,
1174951 (16) those agricultural activities classified in the
1175952 NAICS Manual under U.S. Industry Nos. 1114,
1176953 112120, 112310, 112340, 1125, 112910 and 115 , and
1177954 (17) equipment rental and leasing activities defined
1178955 or classified in the NAICS Manual under Industry
1179956 Group No. 5324.
1180957 b. An establishment described in subparagraph a of this
1181958 paragraph shall not be considered to be engaged in a
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1182986 basic industry unless it offers, or will offer within
1183987 one hundred eighty (180) days of employment, a basic
1184988 health benefits plan to the individuals it employ s in
1185989 new direct jobs in this state which is determined by
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1212990 the Oklahoma Department of Commerce to consist of the
1213991 following elements or elements substantially
1214992 equivalent thereto:
1215993 (1) not more than fifty percent (50%) of the premium
1216994 shall be paid by the emplo yee,
1217995 (2) coverage for basic hospital care,
1218996 (3) coverage for physician care,
1219997 (4) coverage for mental health care,
1220998 (5) coverage for substance abuse treatment,
1221999 (6) coverage for prescription drugs, and
12221000 (7) coverage for prenatal care;
12231001 2. “Change-in-control event” means the transfer to one or more
12241002 unrelated establishments or unrelated persons, of either:
12251003 a. beneficial ownership of more than fifty percent (50%)
12261004 in value and more than fifty percent (50%) in voting
12271005 power of the outstanding equity securities of the
12281006 transferred establishment, or
12291007 b. more than fifty percent (50%) in value of the assets
12301008 of an establishment.
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12311036 A transferor shall be treated as related to a transferee if more
12321037 than fifty percent (50%) of the voting interests of the transferor
12331038 and transferee are owned, directly or indirectly, by the other or
12341039 are owned, directly or indirectly, by the same person or persons,
12351040 unless such transferred establishment has an outstanding class of
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12621041 equity securities registered under Sections 12(b) or 15(d) of the
12631042 Securities Exchange Act of 1934, as amended, in which event the
12641043 transferor and transferee will be treated as unrelated; provided, an
12651044 establishment applying for the Oklahoma Quality Jobs Program Act as
12661045 a result of a change -in-control event is required to apply withi n
12671046 one hundred eighty (180) days of the change -in-control event to
12681047 qualify for consideration. An establishment entering the Oklahoma
12691048 Quality Jobs Program Act as the result of a change -in-control event
12701049 shall be required to maintain a level of new direct job s as agreed
12711050 to in its contract with the Oklahoma Department of Commerce and to
12721051 pay new direct jobs an average annualized wage which equals or
12731052 exceeds one hundred twenty -five percent (125%) of the average county
12741053 wage as that percentage is determined by the Oklahoma Department of
12751054 Commerce based upon the most recent U.S. Department of Commerce data
12761055 for the county in which the new jobs are located. For purposes of
12771056 this paragraph, healthcare premiums paid by the applicant for
12781057 individuals in new direct jobs shal l not be included in the
12791058 annualized wage. Such establishment entering the Oklahoma Quality
12801059 Jobs Program Act as the result of a change -in-control event shall be
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12811087 required to retain the contracted average annualized wage and
12821088 maintain the contracted maintenan ce level of new direct jobs numbers
12831089 as certified by the Tax Commission. If the required average
12841090 annualized wage or the required new direct jobs numbers do not equal
12851091 or exceed such contracted level during any quarter, the quarterly
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13121092 incentive payments shall not be made and shall not be resumed until
13131093 such time as such requirements are met. An establishment described
13141094 in this paragraph shall be required to repay all incentive payments
13151095 received under the Oklahoma Quality Jobs Program Act if the
13161096 establishment is determined by the Tax Commission to no longer have
13171097 business operations in the state within three (3) years from the
13181098 beginning of the calendar quarter for which the first incentive
13191099 payment claim is filed;
13201100 3. “New direct job”:
13211101 a. means full-time-equivalent employment in this state in
13221102 an establishment which has qualified to receive an
13231103 incentive payment pursuant to the provisions of the
13241104 Oklahoma Quality Jobs Program Act which employment did
13251105 not exist in this state prior to the date of approval
13261106 by the Department of the application of the
13271107 establishment pursuant to the provisions of Section
13281108 3604 of this title and with respect to an
13291109 establishment qualifying for incentive payments
13301110 pursuant to division (12) of subparagraph a of
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13311138 paragraph 1 of this subsection shall n ot include
13321139 compensation paid to an employee or independent
13331140 contractor for an athletic contest conducted in the
13341141 state if the compensation is paid by an entity that
13351142 does not have its principal place of business in the
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13621143 state or that does not own real or perso nal property
13631144 having a market value of at least One Million Dollars
13641145 ($1,000,000.00) located in the state, and the
13651146 employees or independent contractors of such entity
13661147 are compensated to compete against the employees or
13671148 independent contractors of an establish ment that
13681149 qualifies for incentive payments pursuant to division
13691150 (12) of subparagraph a of paragraph 1 of this
13701151 subsection and which is organized under Oklahoma law
13711152 or that is lawfully registered to do business in the
13721153 state and which does have its principal place of
13731154 business located in the state and owns real or
13741155 personal property having a market value of at least
13751156 One Million Dollars ($1,000,000.00) located in the
13761157 state; provided, that, if an application of an
13771158 establishment is approved by the Oklahoma Departme nt
13781159 of Commerce after a change -in-control event and the
13791160 Director of the Oklahoma Department of Commerce
13801161 determines that the jobs located at such establishment
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13811189 are likely to leave the state, “new direct job” shall
13821190 include employment that existed in this stat e prior to
13831191 the date of application which is retained in this
13841192 state by the new establishment following a change in
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14111193 control event, if such job otherwise qualifies as a
14121194 new direct job, and
14131195 b. shall include full-time-equivalent employment in this
14141196 state of employees who are employed by an employment
14151197 agency or similar entity other than the establishment
14161198 which has qualified to receive an incentive payment
14171199 and who are leased or otherwise provided under
14181200 contract to the qualified establishment, if such job
14191201 did not exist in this state prior to the date of
14201202 approval by the Department of the application of the
14211203 establishment or the job otherwise qualifies as a new
14221204 direct job following a change -in-control event. A job
14231205 shall be deemed to exist in this state prior to
14241206 approval of an application if the activities and
14251207 functions for which the particular job exists have
14261208 been ongoing at any time within six (6) months prior
14271209 to such approval. With respect to establishments
14281210 defined in division (10) of subparagraph a of
14291211 paragraph 1 of this subsection, new direct jobs shall
14301212 be limited to those jobs directly comprising the
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14311240 corporate headquarters of or directly relating to
14321241 manufacturing, maintenance, administrative, financial,
14331242 engineering, surveying, geological or geophysical
14341243 services performed by the establishment. Under no
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14611244 circumstances shall employment relating to field
14621245 services be considered new direct jobs , and
14631246 c. shall include full-time-equivalent employment at a
14641247 qualified federal facility which did not exist in this
14651248 state prior to the date of approval by the Department
14661249 of Commerce of the application of the political
14671250 subdivision for a qualified federal facility ;
14681251 4. “Estimated direct state benefits ” means the tax revenues
14691252 projected by the Department to accrue to the state as a result of
14701253 new direct jobs;
14711254 5. “Estimated direct state costs ” means the costs projected by
14721255 the Department to accrue to the state as a result of new direct
14731256 jobs. Such costs shall include, but not be limited to:
14741257 a. the costs of education of new state resident chi ldren,
14751258 b. the costs of public health, public safety and
14761259 transportation services to be provided to new state
14771260 residents,
14781261 c. the costs of other state services to be provided to
14791262 new state residents, and
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14801290 d. the costs of other state services direct state costs
14811291 as deemed relevant by the Oklahoma Department of
14821292 Commerce;
14831293 6. “Estimated net direct state benefits ” means the estimated
14841294 direct state benefits less the estimated direct state costs;
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15111295 7. “Estimated indirect state benefits ” means the indirect new
15121296 tax revenues projected by the Oklahoma Department of Commerce to
15131297 accrue to the state including, but not limited to, revenue generated
15141298 from ancillary support jobs directly related to the establishment;
15151299 8. “Estimated indirect state costs ” means the costs projected
15161300 by the Department to accrue to the state as a result of new indirect
15171301 jobs. Such costs shall include, but not be limited to, costs
15181302 enumerated in subparagraphs a, b, c and d of paragraph 5 of this
15191303 subsection;
15201304 9. “Estimated net direct and indirect state benefit s” means the
15211305 estimated direct and indirect state benefits less the estimated
15221306 direct and indirect state costs;
15231307 10. “Net benefit rate” means the estimated net direct state
15241308 benefits computed as a percentage of gross payroll; provided:
15251309 a. except as otherwise provided in this paragraph, the
15261310 net benefit rate may be variable and shall not exceed
15271311 five percent (5%), and
15281312 b. the net benefit rate shall not exceed six percent (6%)
15291313 in connection with an establishment which is owned and
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15301341 operated by an entity which has be en awarded a United
15311342 States Department of Defense contract for which:
15321343 (1) bids were solicited and accepted by the United
15331344 States Department of Defense from facilities
15341345 located outside this state,
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15611346 (2) the term is or is renewable for not less than
15621347 twenty (20) years, and
15631348 (3) the average annual salary, excluding benefits
15641349 which are not subject to Oklahoma income taxes,
15651350 for new direct jobs created as a direct result of
15661351 the awarding of the contract is projected by the
15671352 Oklahoma Department of Commerce to equal or
15681353 exceed Forty Thousand Dollars ($40,000.00) within
15691354 three (3) years of the date of the first
15701355 incentive payment,
15711356 c. except as otherwise provided in subparagraph d of this
15721357 paragraph, in no event shall incentive payments,
15731358 cumulatively, exceed the estimated net direc t state
15741359 benefits,
15751360 d. the net benefit rate shall be five percent (5%) for an
15761361 establishment locating:
15771362 (1) in an opportunity zone located in a high -
15781363 employment county, as such terms are defined in
15791364 subsection G of Section 3604 of this title, or
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15801392 (2) in a county in which:
15811393 (a) the per capita personal income, as
15821394 determined by the Department, is eighty -five
15831395 percent (85%) or less of the statewide
15841396 average per capita personal income,
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16111397 (b) the population has decreased over the
16121398 previous ten (10) years, as determined by
16131399 the Oklahoma Department of Commerce based on
16141400 the most recent U.S. Department of Commerce
16151401 data, or
16161402 (c) the unemployment rate exceeds the lesser of
16171403 five percent (5%) or two percentage points
16181404 above the state average unemployment rate as
16191405 certified by the Oklahoma Employment
16201406 Security Commission,
16211407 e. the net benefit rate shall not exceed six percent (6%)
16221408 in connection with an establishment which:
16231409 (1) is, as of the date of application, receiving
16241410 incentive payments pursuant to the Oklahoma
16251411 Quality Jobs Program Act and has been receiving
16261412 such payments for at least one (1) year prior to
16271413 the date of application, and
16281414 (2) expands its operations in this state by creating
16291415 additional new direct jobs which pay average
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16301443 annualized wages which equal or exceed one hundred
16311444 fifty percent (150%) of the average annualized
16321445 wages of new direct jobs on which incentive
16331446 payments were received during the preceding
16341447 calendar year, except as otherwise provided in
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16611448 this section, in no event shall incentive payments
16621449 based on the net benefit rate, cu mulatively,
16631450 exceed the estimated net direct state benefits ;
16641451 f. with
16651452 11. “Compound net benefit rate ” means the estimated net direct
16661453 benefits and indirect state benefits computed as a percentage of
16671454 gross payroll, provided:
16681455 a. the compound net benefit rate m ay be variable, may be
16691456 less than five percent (5%), and shall not exceed ten
16701457 percent (10%), and
16711458 b. in no event shall incentive payments, cumulatively,
16721459 exceed the estimated net direct benefit and indirect
16731460 state benefits;
16741461 12. With respect to an establishmen t defined or classified in
16751462 the NAICS Manual under U.S. Industry No. 711211 (2007 version) or
16761463 any establishment defined or classified in the NAICS Manual as a
16771464 U.S. Industry Number which is not included within the definition of
16781465 “basic industry” as such term is defined in this section on April
16791466 17, 2008, the net benefit rate shall not exceed the highest rate of
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16801494 income tax imposed upon the Oklahoma taxable income of individuals
16811495 pursuant to subparagraph (g) or subparagraph (h), as applicable, of
16821496 paragraph 1 and paragraph 2 of subsection B of Section 2355 of this
16831497 title. Any change in such highest rate of individual income tax
16841498 imposed pursuant to the provisions of Section 2355 of this title
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17111499 shall be applicable to the computation of incentive payments to an
17121500 establishment as described by this subparagraph and shall be
17131501 effective for purposes of incentive payments based on payroll paid
17141502 by such establishment on or after January 1 of any applicable year
17151503 for which the net benefit rate is modified as required by this
17161504 subparagraph,; and
17171505 g. the net benefit rate shall not exceed six percent (6%)
17181506 in connection with an establishment which employs
17191507 United States military veterans in at least ten
17201508 percent (10%) of its gross payroll. The net benefit
17211509 rate for an establishment which em ploys United States
17221510 military veterans in at least ten percent (10%) of its
17231511 payroll shall not be lower than five percent (5%).
17241512 13. An establishment that employs United States military
17251513 veterans whose wages make up at least ten percent (10%) of its gross
17261514 payroll may utilize the compound net benefit rate. The net benefit
17271515 rate for an establishment that employs United States military
17281516 veterans whose wages make up at least ten percent (10%) of its
17291517 payroll shall not be lower than five percent (5%).
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17301545 Incentive payments made pursuant to the provisions of this
17311546 subparagraph paragraph shall be based upon payroll associated with
17321547 such new direct jobs. For purposes of this subparagraph paragraph,
17331548 the amount of health insurance premiums or other benefits paid by
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17601549 the establishment shall not be included for purposes of computation
17611550 of the average annualized wage;
17621551 8. 14. “Gross payroll” means wages, as defined in Section
17631552 2385.1 of this title for new direct jobs;
17641553 9.
17651554 15. a. “Establishment” means any business, nonprofit or
17661555 governmental entity, no matter what legal form ,
17671556 including, but not limited to, a nonreligious 501(c)3,
17681557 501(c)6, qualified federal facility , a sole
17691558 proprietorship; , partnership;, limited liability
17701559 company; , corporation or combination of corporations
17711560 which have a central parent corporation which makes
17721561 corporate management decisions such as those involving
17731562 consolidation, acquisition, merger or expansion;
17741563 federal agency; political subdivision of the State of
17751564 Oklahoma; or trust authority; provided, distinct,
17761565 identifiable subunits of such entities may be
17771566 determined to be an establishment, for all purposes of
17781567 the Oklahoma Quality Jobs Program Act, by the
17791568 Department subject to the following conditions:
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17801596 (1) within three (3) years of the first complete
17811597 calendar quarter following the start date, the
17821598 entity must have a minimum payroll of Two Million
17831599 Five Hundred Thousand Dollars ($2,500,000.00) at
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18101600 least the payroll threshold required in the
18111601 county where it is located and the subunit must
18121602 also have or will have a minimum pay roll of Two
18131603 Million Five Hundred Thousand Dollars
18141604 ($2,500,000.00) at least the payroll threshold
18151605 required in the county where it is located,
18161606 (2) the subunit is engaged in an activity or service
18171607 or produces a product which is demonstratively
18181608 independent and separate from the entity ’s other
18191609 activities, services or products and could be
18201610 conducted or produced in the absence of any other
18211611 activity, service or production of the entity,
18221612 (3) has an accounting system capable of tracking or
18231613 facilitating an audit of th e subunit’s payroll,
18241614 expenses, revenue and production. Limited
18251615 interunit overlap of administrative and
18261616 purchasing functions shall not disqualify a
18271617 subunit from consideration as an establishment by
18281618 the Department,
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18291646 (4) the entity has not previously had a su bunit
18301647 determined to be an establishment pursuant to
18311648 this section; provided, the restriction set forth
18321649 in this division shall not apply to subunits
18331650 which qualify pursuant to the provisions of
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18601651 subparagraph b of paragraph 7 of this subsection ,
18611652 and
18621653 (5) it is determined by the Department that the
18631654 entity will have a probable net gain in total
18641655 employment within the incentive period.
18651656 b. The Department may promulgate rules to further limit
18661657 the circumstances under which a subunit may be
18671658 considered an establishment. The Department shall
18681659 promulgate rules to determine whether a subunit of an
18691660 entity achieves a net gain in total employment. The
18701661 Department shall establish criteria for determining
18711662 the period of time within which such gain must be
18721663 demonstrated and a method for determining net gain in
18731664 total employment;
18741665 10. 16. “NAICS Manual” means any manual, book or other
18751666 publication containing the North American Industry Classification
18761667 System, United States, 1997, promulgated by the Office of Management
18771668 and Budget of the United States of America, or the latest revised
18781669 edition;
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18791697 11. “Qualified federal contract ” means a contract between an
18801698 agency or instrumentality of the United States government, including
18811699 but not limited to the Department of Defense or any branch of the
18821700 United States Armed Forces, but exclusive of any contract performed
18831701 for the Federal Emergency Management Agency as a direct result of a
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19101702 natural disaster declared by the Governor or the President of the
19111703 United States with respect to damage to property located in Oklahoma
19121704 or loss of life or personal injury to persons in Oklahoma, and a
19131705 lawfully recognized business entity, whether or not the business
19141706 entity is organized under the laws of the State of Oklahoma or
19151707 whether or not the principal place of business of t he business
19161708 entity is located within the State of Oklahoma, for the performance
19171709 of services, including but not limited to testing, research,
19181710 development, consulting or other services in a basic industry, if
19191711 the contract involves the performance of such ser vices performed on
19201712 or after July 1, 2009, by the employees of the business entity
19211713 within the State of Oklahoma or if the contract involves the
19221714 performance of such services performed on or after July 1, 2009, by
19231715 employees of a lawfully recognized business e ntity that is a
19241716 subcontractor of the business entity with which the prime contract
19251717 has been formed. A qualified federal contract described in this
19261718 paragraph shall not qualify unless both the qualified federal
19271719 contractor and any subcontractors originally i nvolved in the work or
19281720 added subsequently during the period of performance verify to the
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19291748 qualified federal contractor verifier that it offers, or will offer
19301749 within one hundred eighty (180) days of employment of its respective
19311750 employees, a basic health bene fits plan as described in subparagraph
19321751 b of paragraph 1 of this subsection to individuals who perform
19331752 qualified labor hours in this state;
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19601753 12. “Qualified federal contractor verifier ” means a nonprofit
19611754 entity organized under the laws of the State of Oklaho ma, having an
19621755 affiliation with a comprehensive university which is part of The
19631756 Oklahoma State System of Higher Education, and having the following
19641757 characteristics:
19651758 a. established multiyear classified and unclassified
19661759 indefinite-delivery/indefinite-quantity federal
19671760 contract vehicles in excess of Fifty Million Dollars
19681761 ($50,000,000.00),
19691762 b. current capability to sponsor and maintain personnel
19701763 security clearances and authorized by the federal
19711764 government to handle and perform classified work up to
19721765 the Top Secret Sensitive Compartmented Information
19731766 levels,
19741767 c. at least one on-site federally certified Sensitive
19751768 Compartmented Information Facility,
19761769 d. on-site secure mass data storage complex with the
19771770 capability of isolating, segregating and protecting
19781771 corporate proprietary and classified information,
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19791799 e. trusted agent status by maintaining no ownership of,
19801800 vested interest in, nor royalty production from any
19811801 intellectual property,
19821802 f. at least one hundred thousand (100,000) square feet of
19831803 configurable laboratory and suppor t space,
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20101804 g. the direct access to restricted air space through a
20111805 formalized memorandum of agreement with the Department
20121806 of Defense,
20131807 h. at least five thousand (5,000) acres available for
20141808 outdoor testing and training facilities, and
20151809 i. the ability to house st ate-of-the-art surety
20161810 facilities, including chemical, biological,
20171811 radiological, explosives, electronics, and unmanned
20181812 systems laboratories and ranges;
20191813 13. “SIC Manual” means the 1987 revision to the Standard
20201814 Industrial Classification Manual, promulgated b y the Office of
20211815 Management and Budget of the United States of America;
20221816 14. 17. “Start date” means the date on which an establishment
20231817 may begin accruing benefits for the creation of new direct jobs,
20241818 which date shall be determined by the Department;
20251819 15. 18. “Effective date” means the date of approval of a
20261820 contract under which incentive payments will be made pursuant to the
20271821 Oklahoma Quality Jobs Program Act, which shall be the date the
20281822 signed and accepted incentive contract is received by the
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20291850 Department; provided, an approved project may have a start date
20301851 which is different from the effective date;
20311852 16. “Total qualified labor hours ” means the reimbursed payment
20321853 amount for hours of work performed by the State of Oklahoma
20331854 workforce of a qualified federal contra ctor or the State of Oklahoma
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20601855 workforce of a subcontractor of a qualified federal contractor and
20611856 which are required for the full performance of a qualified federal
20621857 contract;
20631858 17. “Qualified labor rate ” means the fully reimbursed labor
20641859 rate paid through a q ualified federal contract for qualified labor
20651860 hours to the qualified federal contractor or subcontractor;
20661861 18. “Qualified federal contractor ” means a business entity:
20671862 a. maintaining a prime contract with the federal
20681863 government as defined in paragraph 11 of this
20691864 subsection,
20701865 b. providing notice of intent to apply to the Department
20711866 within one hundred eighty (180) days of July 1, 2010,
20721867 or one hundred eighty (180) days of the date of the
20731868 award of a qualified federal contract or award of a
20741869 new qualified subcontra ct under an existing qualified
20751870 federal contract, and
20761871 c. adding substantively to the contract by performing at
20771872 least eight percent (8%) of the total labor whether
20781873 qualified and nonqualified labor as determined by the
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20791901 federal contractor verifier on a direct contract or
20801902 individual task order or delivery order on an
20811903 indefinite-delivery/indefinite-quantity or other
20821904 blanket contract vehicle.
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21091905 Should a prime contractor provide notice to the Department of
21101906 its intent not to apply for incentive for a qualified federal
21111907 contract or fails to qualify under the criteria above,
21121908 subcontractors in order of tier ranking as determined by the federal
21131909 contract verifier may assume the role of the prime and apply to
21141910 become a qualified federal contractor provided the entity meets the
21151911 same criteria above with the exception that notice of intent to
21161912 apply with the Department must be provided within sixty (60) days of
21171913 the prime’s disqualification or one hundred eighty (180) days of the
21181914 award of its subcontract, whichever is later; and
21191915 19. “Proxy establishment” means a public trust which:
21201916 a. is organized and existing under Section 176 of Title
21211917 60 of the Oklahoma Statutes for the benefit of a
21221918 geographic area which includes a city or county or
21231919 some combination thereof, and
21241920 b. benefits a geographic area where new direct jobs which
21251921 meet the requirements of the Oklahoma Quality Jobs
21261922 Program Act are created by an establishment, other
21271923 than the proxy establishment, which is a branch of the
21281924 Armed Forces of the United States.
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21291952 A proxy establishment ma y be determined to be an establishment
21301953 for all purposes of the Oklahoma Quality Jobs Program Act by the
21311954 Department and incentive payments may be made to such proxy
21321955 establishment for new direct jobs otherwise qualified pursuant to
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21591956 the Oklahoma Quality Jobs Program Act. The Department may
21601957 promulgate rules to further specify the circumstances under which a
21611958 proxy establishment may be considered an establishment for the
21621959 purposes of making application for incentive payments pursuant to
21631960 the Oklahoma Quality Jobs Program Act. Provided however, that with
21641961 respect to any data on qualifying direct new jobs from a branch of
21651962 the Armed Forces of the United States, such rules shall only require
21661963 a proxy establishment to provide such data as would otherwise be
21671964 publicly releasable by the branch of the Armed Forces of the United
21681965 States.
21691966 19. “Full-time employment” means employment of persons residing
21701967 in this state, and subject to the tax imposed by Section 2355 of
21711968 this title, and working an annual average of thirty (30) or mor e
21721969 hours per week in new direct jobs located in this state;
21731970 20. “Qualified federal facility ” means a facility developed by
21741971 or at the expense of a political subdivision of this state and
21751972 leased or conveyed to the government of the United States which
21761973 primarily houses federal employees;
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21772001 21. “Political subdivision ” means a municipality, a county or a
21782002 public trust, the beneficiary or beneficiaries of which are a
21792003 municipality, a county , this state or a combination thereof;
21802004 22. “Project term” means the length of time a political
21812005 subdivision may receive incentive payments associated with a
21822006 qualified federal facility pursuant to the provisions of this act;
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22092007 provided, the project term shall not exceed twenty (20) years from
22102008 the date of the first incentive payment;
22112009 23. “Develops” means acquires, maintains, constructs, improves,
22122010 enlarges, renews, renovates, replaces, leases, equips, furnishes or
22132011 operates;
22142012 24. “Average county wage” means the annualized average county
22152013 wage as determined by the Department of Commerce ba sed on the most
22162014 recent United States Department of Commerce data for the county in
22172015 which the new direct jobs are located. For purposes of this
22182016 paragraph, health care premiums paid by the applicant for
22192017 individuals in new direct jobs shall not be included i n the
22202018 annualized wage;
22212019 25. “State threshold wage ” means an annualized average wage of
22222020 Forty Thousand Dollars ($40,000.00). This maximum wage threshold
22232021 shall be indexed and modified from time to time based on the latest
22242022 Consumer Price Index year -to-date percent change release as of the
22252023 date of the annual average county wage data release from the Bureau
22262024 of Economic Analysis of the United States Department of Commerce.
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22272052 For purposes of this paragraph, health care premiums paid by the
22282053 applicant for individual s in new direct jobs shall not be included
22292054 in the annualized wage;
22302055 26. “Small employer wage” means the average county wage of
22312056 employers with less than five hundred employees located in that
22322057 county as that percentage is determined by the Department of
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22592058 Commerce based upon the most recent wage and employment data from
22602059 the Oklahoma Employment Security Commission for the county where the
22612060 new direct jobs are located. For purposes of this paragraph, health
22622061 care premiums paid by the applicant for individuals in n ew direct
22632062 jobs shall not be included in the annualized wage ;
22642063 27. “Tier 1 County” means a county that has a population of
22652064 less than ten thousand (10,000) as identified by the most recent
22662065 federal decennial Census from the U nited States Census Bureau;
22672066 28. “Tier 2 County” means a county that has a population of
22682067 greater than or equal to ten thousand (10,000) and less than thirty
22692068 thousand (30,000) as identified by the most recent federal decennial
22702069 Census from the United States Census Bureau;
22712070 29. “Tier 3 County” means a county that has a population of
22722071 greater than or equal to thirty thousand (30,000) and less than
22732072 sixty thousand (60,000) as identified by the most recent federal
22742073 decennial Census from the U nited States Census Bureau;
22752074 30. “Tier 4 County” means a county that has a population of
22762075 greater than or equal to sixty thousand (60,000) and less than three
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22772103 hundred thousand (300,000) as identified by the most recent federal
22782104 decennial Census from the U nited States Census Bureau;
22792105 31. “Tier 5 County” means a county that has a population of
22802106 greater than or equal to three hundred thousand (300,000) as
22812107 identified by the most recent federal decennial Census from the
22822108 United States Census Bureau;
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23092109 32. “Former military facility ” means any tract or parcel of
23102110 real property used primarily for a military purpose during a state
23112111 of war, armed conflict or during peace time, title to has been
23122112 vested in the United States Government, any branch of the Armed
23132113 Forces of the United States of America or was subsequently conveyed
23142114 by such entities to this state, any political subdivision of this
23152115 state, or any public trust having this state or any political
23162116 subdivision of this state as its beneficiary, whether singly or in
23172117 combination with other government entities prior to the date the
23182118 establishment acquired its interest ;
23192119 33. “Tier 3 County basic industry ” means all industries defined
23202120 as basic industries in subsection A of this section and includes:
23212121 a. forest nurseries and gathering of forest products
23222122 activities defined or classified in th e NAICS Manual
23232123 under Industry Group No. 1132,
23242124 b. arts, entertainment and recreation activities defined
23252125 or classified in the NAICS Manual under Industry Group
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23262153 Nos. 711219, 711310, 7121, 713110, 713940 and 713990 ,
23272154 and
23282155 c. electronic and precision equipment re pair and
23292156 maintenance activities defined or classified in the
23302157 NAICS Manual under Industry Group No. 8112, and
23312158 support, repair, and maintenance service activities
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23582159 for the wind industry defined or classified in the
23592160 NAICS Manual under Industry Group No. 811310 ;
23602161 34. “Tier 2 County basic industry ” means all industries
23612162 included in Tier 3 County basic industry and includes:
23622163 a. mining activities, except oil and gas, defined or
23632164 classified in the NAICS Manual under Industry Group
23642165 No. 212,
23652166 b. support activities for no nmetallic minerals mining
23662167 activities defined or classified in the NAICS Manual
23672168 under Industry Group No. 213115, and
23682169 c. materials recovery and remediation services activities
23692170 defined or classified in the NAICS Manual under
23702171 Industry Group Nos. 562910 and 562 920; and
23712172 35. “Tier 1 County basic industry ” means all industries
23722173 included in Tier 2 County basic industry and Tier 3 County basic
23732174 industry and includes:
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23742202 a. depository credit intermediation activities defined or
23752203 classified in the NAICS Manual under Industr y Group
23762204 No. 5221, and
23772205 b. hospitals and health care activities defined or
23782206 classified in the NAICS Manual under Industry Group
23792207 No. 622.
23802208 B. The Incentive Approval Committee is hereby created and shall
23812209 consist of the Director of the Office of Management and E nterprise
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24082210 Services, the Director of the Department and one member of the
24092211 Oklahoma Tax Commission appointed by the Tax Commission, or a
24102212 designee from each agency approved by such member. It shall be the
24112213 duty of the Committee to determine the eligibility of all applicants
24122214 for the Oklahoma Quality Jobs Program Act, subject to the applicable
24132215 requirements.
24142216 C. For an establishment defined as a “basic industry” pursuant
24152217 to division (4) of subparagraph a of paragraph 1 of subsection A of
24162218 this section, the Incenti ve Approval Committee shall consist of the
24172219 members provided by subsection B of this section and the Executive
24182220 Director of the Oklahoma Center for the Advancement of Science and
24192221 Technology, or a designee from the Center appointed by the Executive
24202222 Director.
24212223 SECTION 3. AMENDATORY 68 O.S. 2011, Section 3604, as
24222224 last amended by Section 2, Chapter 144, O.S.L. 2018 (68 O.S. Supp.
24232225 2020, Section 3604), is amended to read as follows:
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24242253 Section 3604. A. Except as otherwise provided in subsect ion I
24252254 or subsection L of this section, an establishment which meets the
24262255 qualifications specified in the Oklahoma Quality Jobs Program Act
24272256 may receive quarterly incentive payments for a ten -year period from
24282257 the Oklahoma Tax Commission pursuant to the provis ions of the
24292258 Oklahoma Quality Jobs Program Act ; provided, such an establishment
24302259 defined or classified in the NAICS Manual under U.S. Industry No.
24312260 711211 (2007 version) may receive quarterly incentive payments for a
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24582261 fifteen-year period. The amount of such p ayments shall be equal to
24592262 the net benefit rate or the compound net benefit rate multiplied by
24602263 the actual gross payroll of new direct jobs for a calendar quarter
24612264 as verified by the Oklahoma Employment Security Commission.
24622265 B. In order to receive incentive p ayments, an establishment
24632266 shall apply to the Oklahoma Department of Commerce. The application
24642267 shall be on a form prescribed by the Department and shall contain
24652268 such information as may be required by the Department to determine
24662269 if the applicant is qualifie d. An establishment may apply for an
24672270 effective date for a project, which shall not be more than twenty -
24682271 four (24) months from the date the application is submitted to the
24692272 Department.
24702273 C. Except as otherwise provided by subsection D or E of this
24712274 section, in In order to qualify to receive such incentive payments,
24722275 the establishment applying shall be required to:
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24732303 1. Be engaged in a basic industry , a Tier 3 County basic
24742304 industry in a Tier 1, Tier 2 or Tier 3 County, a Tier 2 County basic
24752305 industry in a Tier 1 or Tier 2 County or Tier 1 County basic
24762306 industry in a Tier 1 County ;
24772307 2. Have an annual gross payroll for new direct jobs projected
24782308 by the Department to equal or exceed Two Million Five Hundred
24792309 Thousand Dollars ($2,500,000.00) within three (3) years of the f irst
24802310 complete calendar quarter following the start date Pay new direct
24812311 jobs an average annualized wage which equals or exceeds the average
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25082312 county wage, the state threshold wage, or when the establishment has
25092313 less than five hundred (500) employees, pay new direct jobs an
25102314 average annualized wage which equals or exceeds the small employer
25112315 wage. For purposes of this paragraph, health care premiums paid by
25122316 the applicant for individuals in new direct jobs shall not be
25132317 included in the annualized wage ; and
25142318 3. Have a number of full-time-equivalent employees subject to
25152319 the tax imposed by Section 2355 of this title and working an annual
25162320 average of thirty (30) or more hours per week in new direct jobs
25172321 located in this state equal to or in excess of eighty percent (80%)
25182322 of the total number of new direct jobs.
25192323 D. In Before receiving its first quarterly payment, an
25202324 establishment shall meet the payroll and/or the new jobs
25212325 requirements set forth in this section and stipulated in the
25222326 agreement with the state. When these req uirements are met, the
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25232354 establishment shall be paid the prior quarter incentive payments and
25242355 the current quarter incentive payments for those quarters when the
25252356 average wage threshold was also met. Except as otherwise provided
25262357 in this section, in order to qualify to receive incentive payments
25272358 as authorized by the Oklahoma Quality Jobs Program Act, an
25282359 establishment engaged in an activity described under shall be
25292360 required to have an annual gross payroll for new direct jobs
25302361 projected by the Department to equal or exceed:
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25572362 1. Five Hundred Thousand Dollars ($500,000 .00) within three (3)
25582363 years of the first complete calendar quarter following the start
25592364 date in a Tier 1 County;
25602365 2. One Million Dollars ($1,000,000 .00) within three (3) years
25612366 of the first complete calen dar quarter following the start date in a
25622367 Tier 2 County;
25632368 3. One Million Five Hundred Thousand Dollars ($1,500,000.00)
25642369 within three (3) years of the first complete calendar quarter
25652370 following the start date in a Tier 3 County;
25662371 4. Two Million Dollars ($2,00 0,000.00) within three (3) years
25672372 of the first complete calendar quarter following the start date in a
25682373 Tier 4 County; and
25692374 5. Two Million Five Hundred Thousand Dollars ($2,500,000.00)
25702375 within three (3) years of the first complete calendar quarter
25712376 following the start date in a Tier 5 County .
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25722404 1. Industry Group Nos. 3111 through 3119 of the NAICS Manual
25732405 shall be required to:
25742406 a. have an annual gross payroll for new direct jobs
25752407 projected by the Department to equal or exceed One
25762408 Million Five Hundred Thousand Dolla rs ($1,500,000.00)
25772409 within three (3) years of the first complete calendar
25782410 quarter following the start date and make, or which
25792411 will make within one (1) year, at least seventy -five
25802412 percent (75%) of its total sales, as determined by the
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26072413 Incentive Approval Comm ittee pursuant to the
26082414 provisions of subsection B of Section 3603 of this
26092415 title, to out-of-state customers or buyers, to in -
26102416 state customers or buyers if the product or service is
26112417 resold by the purchaser to an out -of-state customer or
26122418 buyer for ultimate use, or to the federal government,
26132419 unless the annual gross payroll equals or exceeds Two
26142420 Million Five Hundred Thousand Dollars ($2,500,000.00)
26152421 in which case the requirements for purchase of output
26162422 provided by this subparagraph shall not apply, and
26172423 b. have a number of full-time-equivalent employees
26182424 working an average of thirty (30) or more hours per
26192425 week in new direct jobs equal to or in excess of
26202426 eighty percent (80%) of the total number of new direct
26212427 jobs; and
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26222455 2. Division (4) of subparagraph a of paragraph 1 o f subsection
26232456 A of Section 3603 of this title, shall be required to:
26242457 a. have an annual gross payroll for new direct jobs
26252458 projected by the Department to equal or exceed One
26262459 Million Five Hundred Thousand Dollars ($1,500,000.00)
26272460 within three (3) years of the f irst complete calendar
26282461 quarter following the start date, and
26292462 b. have a number of full -time-equivalent employees
26302463 working an average of thirty (30) or more hours per
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26572464 week in new direct jobs equal to or in excess of
26582465 eighty percent (80%) of the total number of new direct
26592466 jobs.
26602467 E. An establishment with less than five hundred (500) total
26612468 jobs may also qualify to receive incentive payments as authorized by
26622469 the Oklahoma Quality Jobs Program Act if the establishment:
26632470 1. Creates at least five (5) new qualifying job s with at least
26642471 Two Hundred Thousand Dollars ($200,000.00) in gross payroll within
26652472 two (2) years of the first complete calendar quarter following the
26662473 start date in a Tier 1 County;
26672474 2. Creates at least five (5) new qualifying jobs with at least
26682475 Two Hundred Fifty Thousand Dollars ($250,000.00) in gross payroll
26692476 within two (2) years of the first complete calendar quarter
26702477 following the start date in a Tier 2 County;
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26712505 3. Creates at least ten (10) new jobs with at least Four
26722506 Hundred Thousand Dollars ($400,000.00) in gross payroll within two
26732507 (2) years of the first complete calendar quarter following the start
26742508 date in a Tier 3 County;
26752509 4. Creates at least fifteen (15) new jobs with at least Five
26762510 Hundred Thousand Dollars ($500,000.00) in gross payroll within two
26772511 (2) years of the first complete calendar quarter following the start
26782512 date in a Tier 4 county; and
26792513 5. Creates at least fifteen (15) new jobs with at least Seven
26802514 Hundred Thousand Dollars ($700,000.00) in gross payroll within two
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27072515 (2) years of the first complete calendar quarter following the start
27082516 date in a Tier 5 county.
27092517 F. 1. An establishment which locates its principal business
27102518 activity within a site consisting of at least ten (10) acres which:
27112519 a. is a federal Superfund removal site,
27122520 b. is listed on the Nati onal Priorities List established
27132521 under Section 9605 of Title 42 of the United States
27142522 Code,
27152523 c. has been formally deferred to the state in lieu of
27162524 listing on the National Priorities List, or
27172525 d. has been determined by the Department of Environmental
27182526 Quality to be contaminated by any substance regulated
27192527 by a federal or state statute governing environmental
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27202555 conditions for real property pursuant to an order of
27212556 the Department of Environmental Quality,
27222557 shall qualify for incentive payments irrespective of its actual
27232558 gross payroll or the number of full -time-equivalent employees
27242559 engaged in new direct jobs.
27252560 2. In order to qualify for the incentive payments pursuant to
27262561 this subsection, the establishment shall conduct the activity
27272562 resulting in at least fifty percent (50% ) of its Oklahoma taxable
27282563 income or adjusted gross income, as determined under Section 2358 of
27292564 this title, whether from the sale of products or services or both
27302565 products and services, at the physical location which has been
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27572566 determined not to comply with th e federal or state statutes
27582567 described in this subsection with respect to environmental
27592568 conditions for real property. The establishment shall be subject to
27602569 all other requirements of the Oklahoma Quality Jobs Program Act
27612570 other than the exemptions provided b y this subsection.
27622571 3. In order to qualify for the incentive payments pursuant to
27632572 this subsection, the entity shall obtain from the Department of
27642573 Environmental Quality a letter of concurrence that:
27652574 a. the site designated by the entity does meet one or
27662575 more of the requirements listed in paragraph 1 of this
27672576 subsection, and
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27682604 b. the site is being or has been remediated to a level
27692605 which is consistent with the intended use of the
27702606 property.
27712607 In making its determination, the Department of Environmental
27722608 Quality may rely on existing data and information available to it,
27732609 but may also require the applying entity to provide additional data
27742610 and information as necessary.
27752611 4. If authorized by the Department of Environmental Quality
27762612 pursuant to paragraph 3 of this subsection, the entity may utilize a
27772613 remediated portion of the property for its intended purpose prior to
27782614 remediation of the remainder of the site, and shall qualify for
27792615 incentive payments based on employment associated with the portion
27802616 of the site.
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28072617 F. Except as otherwise provided by subsection G of this
28082618 section, for applications submitted on and after June 4, 2003, in
28092619 order to qualify to receive incentive payments as authorized by the
28102620 Oklahoma Quality Jobs Program Act, in addition to other
28112621 qualifications specified he rein, an establishment shall be required
28122622 to pay new direct jobs an average annualized wage which equals or
28132623 exceeds:
28142624 1. One hundred ten percent (110%) of the average county wage as
28152625 determined by the Department of Commerce based on the most recent
28162626 U.S. Department of Commerce data for the county in which the new
28172627 direct jobs are located. For purposes of this paragraph, health
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28182655 care premiums paid by the applicant for individuals in new direct
28192656 jobs shall be included in the annualized wage; or
28202657 2. One hundred percent (100%) of the average county wage as
28212658 that percentage is determined by the Department of Commerce based
28222659 upon the most recent U.S. Department of Commerce data for the county
28232660 in which the new jobs are located. For purposes of this paragraph,
28242661 health care premiums paid by the applicant for individuals in new
28252662 direct jobs shall not be included in the annualized wage.
28262663 Provided, no average wage requirement shall exceed Twenty -five
28272664 Thousand Dollars ($25,000.00), in any county. This maximum wage
28282665 threshold shall be indexed and modified from time to time based on
28292666 the latest Consumer Price Index year -to-date percent change release
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28562667 as of the date of the annual average county wage data release from
28572668 the Bureau of Economic Analysis of the U.S. Department of Commerce.
28582669 G. 1. As used in this subsection, “opportunity zone” means one
28592670 or more census tracts in which, according to the most recent Federal
28602671 Decennial Census, at least thirty percent (30%) of the residents
28612672 have annual gross household incomes from all sources below the
28622673 poverty guidelines established by the U.S. Department of Health and
28632674 Human Services. An establishment which is otherwise qualified to
28642675 receive incentive payments and which locates its principal business
28652676 activity in an opportunity zone shall not be subj ect to the
28662677 requirements of subsection F of this section.
28672678 2. As used in this subsection:
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28682706 a. “negative economic event ” means:
28692707 (1) a man-made disaster or natural disaster as
28702708 defined in Section 683.3 of Title 63 of the
28712709 Oklahoma Statutes, resulting in the loss of a
28722710 significant number of jobs within a particular
28732711 county of this state, or
28742712 (2) an economic circumstance in which a significant
28752713 number of jobs within a particular county of this
28762714 state have been lost due to an establishment
28772715 changing its structure, consoli dating with
28782716 another establishment, closing or moving all or
28792717 part of its operations out of this state, and
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29062718 b. “significant number of jobs ” means Local Area
29072719 Unemployment Statistics (LAUS) data, as determined by
29082720 the Bureau of Labor Statistics, for a county wh ich are
29092721 equal to or in excess of five percent (5%) of the
29102722 total amount of Local Area Unemployment Statistics
29112723 (LAUS) data for that county for the calendar year, or
29122724 most recent twelve-month period in which employment is
29132725 measured, preceding the event.
29142726 An establishment which is otherwise qualified to receive
29152727 incentive payments and which locates in a county in which a negative
29162728 economic event has occurred within the eighteen -month period
29172729 preceding the start date shall not be subject to the requirements of
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29182757 subsection F of this section; provided, an establishment shall not
29192758 be eligible to receive incentive payments based upon a negative
29202759 economic event with respect to jobs that are transferred from one
29212760 county of this state to another. In order to qualify to receive
29222761 incentive payments as authorized by the Oklahoma Quality Jobs
29232762 Program Act, a political subdivision that attracts a federal
29242763 facility and develops, or causes to be developed, a qualified
29252764 federal facility may apply to the Oklahoma Department of Commerce
29262765 and receive quarterly incentive payments from the Oklahoma Tax
29272766 Commission for the project term pursuant to the provisions of this
29282767 act in an amount which shall be equal to the net benefit rate
29292768 multiplied by the actual gross payroll of new direct jobs at the new
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29562769 qualified federal facility for a calendar quarter; provided, the
29572770 total amount of such payments shall not exceed the total net
29582771 benefit. The qualified federal facility must have gross payroll
29592772 that are projected by the Department to equal or exceed:
29602773 1. One Million Dollars ($1,000,000.00) within three (3) years
29612774 of the first complete calendar quarter following the start date in a
29622775 Tier 1 or Tier 2 County;
29632776 2. One Million Five Hundred Thousand Dollars ($1,500,000.00)
29642777 within three (3) years of the first complete c alendar quarter
29652778 following the start date in a Tier 3 County;
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29662806 3. Two Million Dollars ($2,000,000.00) within three (3) years
29672807 of the first complete calendar quarter following the start date in a
29682808 Tier 4 County; or
29692809 4. Two Million Five Hundred Thousand Dollars ($2,500,000.00)
29702810 within three (3) years of the first complete calendar quarter
29712811 following the start date in a Tier 5 County.
29722812 H. The Department shall determine if the applicant is qualified
29732813 to receive incentive payments.
29742814 I. If the applicant is determined t o be qualified by the
29752815 Department and is not subject to the provisions of subparagraph d of
29762816 paragraph 7 of subsection A of Section 3603 of this title , the
29772817 Department shall conduct a cost/benefit analysis to determine the
29782818 estimated net direct state benefits and the net benefit rate
29792819 applicable for a ten-year period beginning with the first complete
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30062820 calendar quarter following the start date and to estimate the amount
30072821 of gross payroll for a ten -year period beginning with the first
30082822 complete calendar quarter follo wing the start date or for a fifteen -
30092823 year period for an establishment defined or classified in the NAICS
30102824 Manual under U.S. Industry No. 711211 (2007 version) or for the
30112825 project term for a political subdivision applying in conjunction
30122826 with a qualified feder al facility. In conducting such cost/benefit
30132827 analysis, the Department shall consider quantitative factors, such
30142828 as the anticipated level of new tax revenues to the state along with
30152829 the added cost to the state of providing services, and such other
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30162857 criteria as deemed appropriate by the Department . In no event shall
30172858 incentive payments, cumulatively, exceed the estimated net direct
30182859 state benefits, except for applicants subject to the provisions of
30192860 subparagraph d of paragraph 7 of subsection A of Section 3603 of
30202861 this title. The cost/benefit analysis shall determine the estimated
30212862 net direct state benefit, the net benefit rate and the incentive
30222863 payment for an applicant, except:
30232864 1. In Tier 1 Counties, the cost/benefit analysis shall
30242865 determine the estimated net d irect and indirect state benefits, the
30252866 compound net benefit rate and the incentive payment for an applicant
30262867 if the establishment pays average county wages equal to or in excess
30272868 of one hundred twenty -five percent (125%) of the average county
30282869 wage;
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30552870 2. In Tier 2 and Tier 3 Counties, the cost/benefit analysis
30562871 shall determine the estimated net direct and indirect state
30572872 benefits, the compound net benefit rate and the incentive payment
30582873 for an applicant if the establishment pays average county wages
30592874 equal to or in excess of one hundred fifty percent (150%) of the
30602875 average county wage;
30612876 3. In Tier 4 and Tier 5 Counties, the cost/benefit analysis
30622877 shall determine the estimated net direct and indirect state
30632878 benefits, the compound net benefit rate and the incentive payme nt
30642879 for an applicant if the establishment pays average county wages
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30652907 equal to or in excess of two hundred percent (200%) of the average
30662908 county wage.
30672909 J. Upon approval of such an application, the Department shall
30682910 notify the Tax Commission and shall provide it with a copy of the
30692911 contract and the results of the cost/benefit analysis. The Tax
30702912 Commission may require the qualified establishment to submit such
30712913 additional information as may be necessary to administer the
30722914 provisions of the Oklahoma Quality Jobs Progr am Act. The approved
30732915 establishment shall file quarterly claims with the Tax Commission
30742916 and shall continue to file such quarterly claims during the ten -year
30752917 incentive period to show its continued eligibility for incentive
30762918 payments, as provided in Section 3 606 of this title, or until it is
30772919 no longer qualified to receive incentive payments. The
30782920 establishment may be audited by the Tax Commission to verify such
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31052921 eligibility. Once the establishment is approved, an agreement shall
31062922 be deemed to exist between the establishment and the State of
31072923 Oklahoma, requiring the continued incentive payment to be made as
31082924 long as the establishment retains its eligibility as defined in and
31092925 established pursuant to this section and Sections 3603 and 3606 of
31102926 this title and within th e limitations contained in the Oklahoma
31112927 Quality Jobs Program Act, which existed at the time of such
31122928 approval. An establishment described in this subsection shall be
31132929 required to repay all incentive payments received under the Oklahoma
31142930 Quality Jobs Program Act if the establishment is determined by the
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31152958 Oklahoma Tax Commission to no longer have business operations in the
31162959 state have moved the business operations that received incentive
31172960 payments to another state within three (3) years from the beginning
31182961 of the calendar quarter for which the first incentive payment claim
31192962 is filed.
31202963 K. A municipality with a population of less than one hundred
31212964 thousand (100,000) persons in which an establishment eligible to
31222965 receive quarterly incentive payments pursuant to the provis ions of
31232966 this section is located may file a claim with the Tax Commission for
31242967 up to twenty-five percent (25%) of the amount of such payment. The
31252968 amount of such claim shall not exceed amounts paid by the
31262969 municipality for direct costs of municipal infrastruc ture
31272970 improvements to provide water and sewer service to the
31282971 establishment. Such claim shall not be approved by the Tax
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31552972 Commission unless the municipality and the establishment have
31562973 entered into a written agreement for such claims to be filed by the
31572974 municipality prior to submission of the application of the
31582975 establishment pursuant to the provisions of this section. If such
31592976 claim is approved, the amount of the payment to the establishment
31602977 made pursuant to the provisions of Section 3606 of this title shall
31612978 be reduced by the amount of the approved claim by the municipality
31622979 and the Tax Commission shall issue a warrant to the municipality in
31632980 the amount of the approved claim in the same manner as warrants are
31642981 issued to qualifying establishments.
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31653009 L. For any contract executed by an establishment on or after
31663010 the effective date of this act August 1, 2018, five percent (5%) of
31673011 the quarterly incentive payment amount shall be transferred by the
31683012 Oklahoma Tax Commission to the Oklahoma Quick Action Closing Fund.
31693013 SECTION 4. AMENDATORY 68 O.S. 2011, Section 3605, is
31703014 amended to read as follows:
31713015 Section 3605. There is hereby created within the State Treasury
31723016 a special fund for the Oklahoma Tax Commission to be designated the
31733017 “Quality Jobs Program Ince ntive Payment Fund”. The Oklahoma Tax
31743018 Commission is hereby authorized and directed to withhold a portion
31753019 of the taxes levied and collected pursuant to Section 2355 of Title
31763020 68 of the Oklahoma Statutes for deposit into the fund. The amount
31773021 deposited shall equal the sum of an amount determined by multiplying
31783022 the net benefit rate provided by the Department of Commerce by the
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32053023 gross payroll as determined pursuant to the provisions estimated by
32063024 the Tax Commission to be sufficient to pay incentive payments
32073025 claimed pursuant to the provisions of subsection A of Section 6 of
32083026 this act Section 3606 of this title . All of the amounts deposited
32093027 in such fund shall be used and expended by the Tax Commission solely
32103028 for the purposes and in the amounts authorized by the Okla homa
32113029 Quality Jobs Program Act. The liability of the State of Oklahoma to
32123030 make the incentive payments under this act shall be limited to the
32133031 balance contained in the fund created by this section.
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32143059 SECTION 5. AMENDATORY 68 O.S. 2011 , Section 3606, as
32153060 last amended by Section 1, Chapter 138, O.S.L. 2020 (68 O.S. Supp.
32163061 2020, Section 3606), is amended to read as follows:
32173062 Section 3606. A. As soon as practicable after the end of the
32183063 first complete calendar quarter following the start dat e, the
32193064 establishment shall file a claim for the payment with the Oklahoma
32203065 Tax Commission and shall specify the actual number and gross payroll
32213066 of new direct jobs for the establishment for the calendar quarter.
32223067 The Tax Commission shall verify the actual gr oss payroll for new
32233068 direct jobs for the establishment for such calendar quarter. If the
32243069 Tax Commission is not able to provide such verification utilizing
32253070 all available resources, the Tax Commission may request such
32263071 additional information from the establis hment as may be necessary or
32273072 may request the establishment to revise its claim. An establishment
32283073 may file for an extension of the initial filing date with the
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32553074 Oklahoma Department of Commerce. Any such extension shall be based
32563075 solely upon an extraordinary adverse business circumstance which
32573076 prevented the establishment from hiring the new direct jobs as
32583077 projected. If an establishment fails to file claims as required by
32593078 this section, it shall forfeit the right to receive any incentive
32603079 payments after three ( 3) years from the start date. If an
32613080 establishment has filed at least one claim pursuant to this section
32623081 but fails to file another claim within two (2) years of the most
32633082 recent claim, the Tax Commission, after consulting with the
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32643110 Department of Commerce, ma y dismiss the establishment from the
32653111 program, forfeiting the establishment ’s right to receive incentive
32663112 payments based on that contract.
32673113 B. 1. Except as otherwise provided in paragraph 2 of this
32683114 subsection, if the actual verified gross payroll for four ( 4)
32693115 consecutive calendar quarters does not equal or exceed the
32703116 applicable total required by Section 3604 of this title within three
32713117 (3) years of the start date, or does not equal or exceed the
32723118 applicable total required by Section 3604 of this title at any o ther
32733119 time during the ten-year period after the start date or during the
32743120 fifteen-year period after the start date for establishments defined
32753121 or classified in the NAICS Manual under U.S. Industry No. 711211
32763122 (2007 version), the incentive payments shall not be made and shall
32773123 not be resumed until such time as the actual verified gross payroll
32783124 equals or exceeds the amounts specified in Section 3604 of this
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33053125 title. If an establishment fails to achieve the required gross
33063126 payroll within three (3) years of the start date, the establishment
33073127 shall not make a new or renewal application for incentive payments
33083128 authorized pursuant to the Oklahoma Quality Jobs Program Act for a
33093129 period of twelve (12) months from the last day of the last month of
33103130 the three-year period during w hich the required gross payroll amount
33113131 was not achieved.
33123132 2. Any establishment which does not meet the quarterly payroll
33133133 requirements provided pursuant to paragraph 1 of this subsection
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33143161 during the time period which begins on April 1, 2020, and ends on
33153162 June 30, 2021, shall continue to receive incentive payments and
33163163 shall be exempt from the prescribed limitations.
33173164 C. If the average annualized wage required for an establishment
33183165 does not equal or exceed the amount specified in paragraph 1 or 2 of
33193166 subsection F paragraph 2 of subsection C of Section 3604 of this
33203167 title during any calendar quarter, the incentive payments shall not
33213168 be made and shall not be resumed until such time as such
33223169 requirements are met.
33233170 D. In no event shall incentive payments, cumulatively, e xceed
33243171 the estimated net direct state benefits, except for establishments
33253172 subject to the provisions of subparagraph d of paragraph 7 of
33263173 subsection A of Section 3603 of this title :
33273174 1. The estimated net direct state benefits for establishments
33283175 utilizing the net benefit rate; or
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33553176 2. The estimated net direct and indirect state benefits for
33563177 establishments utilizing the compound net benefit rate .
33573178 E. An establishment that has qualified pursuant to Section 3604
33583179 of this title may receive payments only in accordance with the
33593180 provisions of the law under which it initially applied and was
33603181 approved. If an establishment that is receiving incentive payments
33613182 expands, it may apply for additional incentive payments based on the
33623183 gross payroll anticipated from the expansion o nly, pursuant to
33633184 Section 3604 of this title. Provided, an establishment which has
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33643212 suffered an extraordinary adverse business circumstance, as
33653213 certified by the Incentive Approval Committee, may be allowed to
33663214 voluntarily withdraw from the Oklahoma Quality J obs Program, repay
33673215 to the Tax Commission the total amount of incentive payments
33683216 received pursuant to the provisions of this section, plus interest
33693217 at the rate specified in Section 727.1 of Title 12 of the Oklahoma
33703218 Statutes, and reapply to the Department fo r a new incentive contract
33713219 if the establishment qualifies pursuant to the provisions of the
33723220 Oklahoma Quality Jobs Program Act. Any funds received by the Tax
33733221 Commission pursuant to the provisions of this subsection shall be
33743222 apportioned in the manner that i ncome tax revenues are apportioned.
33753223 F. An establishment that is receiving incentive payments may
33763224 not apply for additional incentive payments for any new projects
33773225 until twelve (12) quarters after receipt of the first incentive
33783226 payment, or until the establi shment’s actual verified gross payroll
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34053227 for new direct jobs or new job creation equals or exceeds Two
34063228 Million Five Hundred Thousand Dollars ($2,500,000.00) the payroll or
34073229 job threshold requirements specified in subsection D or subsection G
34083230 of Section 3604 of this title during any four consecutive -calendar-
34093231 quarter period, whichever comes first. After meeting the
34103232 requirements of this subsection, an establishment may apply for
34113233 additional incentive payments based upon the gross payroll
34123234 anticipated from an expan sion only.
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34133262 G. As soon as practicable after verification of the actual
34143263 gross payroll as required by this section and except as otherwise
34153264 provided by subsection K of Section 3604 of this title, the Tax
34163265 Commission shall issue a warrant to the establishment i n the amount
34173266 of the net benefit rate multiplied by the actual gross payroll as
34183267 determined pursuant to subsection A of this section for the calendar
34193268 quarter.
34203269 SECTION 6. AMENDATORY 68 O.S. 2011, Section 3607, as
34213270 amended by Section 2 6, Chapter 227, O.S.L. 2013 (68 O.S. Supp. 2020,
34223271 Section 3607), is amended to read as follows:
34233272 Section 3607. A. Notwithstanding any other provision of law,
34243273 if a qualified establishment receives an incentive payment pursuant
34253274 to the provisions of Section 3 601 et seq. of this title, neither the
34263275 qualified establishment nor its contractors or subcontractors shall
34273276 be eligible to receive the credits or exemptions provided for in the
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34543277 following provisions of law in connection with the activity for
34553278 which the incentive payment was received:
34563279 1. Paragraphs 16 and 17 of Section 1357 of this title;
34573280 2. Paragraph 7 of Section 1359 of this title;
34583281 3. Section 2357.4 of this title; except as provided in
34593282 subsection B of this section;
34603283 4. Section 2357.7 of this title;
34613284 5. Section 2-11-303 of Title 27A of the Oklahoma Statutes;
34623285 6. Section 2357.22 of this title;
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34633313 7. 5. Section 2357.31 of this title;
34643314 8. 6. Section 54003 of this title; or
34653315 9. Section 54006 of this title;
34663316 10. 7. Section 625.1 of Title 36 of the Oklahoma Statutes ;
34673317 11. Subsections C and D of Section 2357.59 of this title;
34683318 12. Section 2357.13 of this title; or
34693319 13. Section 4201 of this title .
34703320 B. Any establishment which has qualified to receive quarterly
34713321 incentive payments pursuant to subsection B of Section 3604 of this
34723322 title for a ten-year period with a project start date after January
34733323 1, 2010, shall be eligible to receive the credit provided for in
34743324 Section 2357.4 of this title if such establishment:
34753325 1. Qualifies for the credit allowed pursuant to paragraph 1 of
34763326 subsection B of Section 2357.4 of this title based on an investment
34773327 made after January 1, 2010;
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35043328 2. Pays an average annualized wage which equals or exceeds the
35053329 average state wage as determined by the Department of Commerce based
35063330 on the most recent U.S. De partment of Commerce data; and
35073331 3. Obtains a determination letter from the Oklahoma Department
35083332 of Commerce that the business activity of the entity will result in
35093333 a positive net benefit rate.
35103334 C. For purposes of the exception provided for in this section:
35113335 1. “Estimated direct state benefits ” has the meaning set out in
35123336 paragraph 4 of subsection A of Section 3603 of this title;
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35133364 2. “Estimated indirect state benefits ” means the indirect new
35143365 tax revenues projected by the Oklahoma Department of Commerce to
35153366 accrue to the state, including, but not limited to, revenue
35163367 generated from ancillary support jobs directly related to the
35173368 primary business;
35183369 3. “Estimated direct state costs ” has the meaning set out in
35193370 paragraph 5 of subsection A of Section 3603 of this title; and
35203371 4. “Estimated indirect state costs ” means the costs projected
35213372 by the Oklahoma Department of Commerce to accrue to the state as a
35223373 result of new indirect jobs. Such costs shall include, but not be
35233374 limited to, costs enumerated in paragraph 3 of this su bsection.
35243375 D. Any establishment which has qualified to receive quarterly
35253376 incentive payments pursuant to subsection B of Section 3604 of this
35263377 title for a ten-year period with a project start date after January
35273378 1, 2010, shall be eligible to receive the credi t provided for in
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35543379 Section 2357.4 of this title pursuant to the provisions of this
35553380 section if such establishment obtains a determination letter from
35563381 the Oklahoma Department of Commerce that the business activity of
35573382 the entity will result in a positive net b enefit rate, to be
35583383 computed by the Oklahoma Department of Commerce using a methodology
35593384 which provides for the analysis of estimated direct state benefits,
35603385 estimated indirect state benefits, estimated direct state costs and
35613386 estimated indirect state costs. The Oklahoma Department of Commerce
35623387 shall use such information as it determines to be relevant for the
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35633415 analysis required by this subsection including, but not limited to,
35643416 the type of business activity in which the entity is engaged or will
35653417 be engaged, amount of capital investment, type of assets acquired or
35663418 utilized by the business entity, economic impact of the business
35673419 activity within the relevant geographic region and such other
35683420 factors as the Department determines to be relevant. The Oklahoma
35693421 Department of Commerce may use information regarding the business
35703422 entity alone or in conjunction with relevant information regarding
35713423 other business activity in a geographically relevant area
35723424 surrounding the principal business location of the primary business
35733425 entity in order to perform the computation of the net benefit rate.
35743426 If the result of the analysis is a positive net benefit rate, the
35753427 establishment shall be allowed to qualify to receive quarterly
35763428 incentive payments pursuant to subsection B of Section 3604 of t his
35773429 title for a ten-year period and shall be eligible to receive the
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36043430 credit provided for in Section 2357.4 of this title. The Oklahoma
36053431 Department of Commerce shall transmit a determination letter to the
36063432 authorized representative of the establishment and s hall also
36073433 transmit a copy of the determination letter to the Oklahoma Tax
36083434 Commission, regardless of whether the result is a positive or
36093435 negative net benefit rate.
36103436 SECTION 7. REPEALER 68 O.S. 2011, Sections 3501, 3502,
36113437 3503, 3504, 3505, 3506, 3507 and 3508, are hereby repealed.
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36123465 SECTION 8. REPEALER 68 O.S. 2011, Sections 3604.1, as
36133466 amended by Section 25, Chapter 227, O.S.L. 2013, 3611 and 3612 (68
36143467 O.S. Supp. 2020, Section 3604.1) , are hereby repealed.
36153468 SECTION 9. REPEALER 68 O.S. 2011, Sections 3801, 3802,
36163469 3803, 3804, 3805, 3806, 3807 and 3808, are hereby repealed.
36173470 SECTION 10. REPEALER 68 O.S. 2011, Sections 3901, 3902,
36183471 3903, as last amended by Section 1, Chapter 128, O.S.L. 2014, 3904,
36193472 as last amended by Section 1, Chapter 197, O.S.L. 2019, 3905, 3906,
36203473 3907, 3908, 3909 and 3910 (68 O.S. Supp. 2020, Sections 3903 and
36213474 3904), are hereby repealed.
36223475 SECTION 11. REPEALER 68 O.S. 2011, Sections 3911, 39 12,
36233476 3913, 3914, as last amended by Section 4, Chapter 144, O.S.L. 2018,
36243477 3915, 3916, 3917, 3918, 3919 and 3920 (68 O.S. Supp. 2020, Section
36253478 3914), are hereby repealed.
36263479 SECTION 12. This act shall become effective November 1, 2021.
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3653-Passed the Senate the 9th day of March, 2021.
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3657- Presiding Officer of the Senate
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3660-Passed the House of Representatives the ____ day of __________,
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3665- Presiding Officer of the House
3666- of Representatives
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3481+COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
3482+04/01/2021 - DO PASS.