An Act
ENROLLED SENATE
BILL NO. 17x By: Thompson (Roger) and Hall
of the Senate
and
Wallace and Martinez of the
House
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 2357.104, which relates to certain
railroad rehabilitation tax credits; modifying
taxable year references; and providing an effective
date.
SUBJECT: Tax credit
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2 357.104, is
amended to read as follows:
Section 2357.104. A. Except as otherwise provided by this
section, for taxable years beginning after December 31, 2005, and
ending before January 1, 2025 2030, there shall be allowed a credit
against the tax imposed by Section 2355 of this t itle equal to fifty
percent (50%) of an eligible taxpayer ’s qualified railroad
reconstruction or replacement expenditures.
B. For tax years 2020 th rough 2024 2029, the amount of the
credit shall be limited to the product of Five Thousand Dollars
($5,000.00) and the number of miles of railroad track owned or
leased within this s tate by the eligible taxpayer as of the close of
the taxable year.
C. The credit allowed pursuant to subsection A of this sec tion
but not used shall be freely transferable, by wri tten agreement, to
subsequent transferees at any time during the five (5) ye ars
ENR. S. B. NO. 17x Page 2
following the year of qualification. An eligible transferee shall
be any taxpayer subject to the tax imposed by Section 2 355 of this
title. The person originally allowed the credit and the subsequent
transferee shall jointly file a copy of the writte n credit transfer
agreement with the Oklahoma Tax Commission within thirty (30) days
of the transfer. The written agreement s hall contain the name,
address and taxpayer identifica tion number of the parties to the
transfer, the amount of credit being trans ferred, the year the
credit was originally allowed to the transferring per son and the tax
year or years for which the credit m ay be claimed. The Tax
Commission shall promulgate ru les to permit verification of the
timeliness of a tax credit claimed upon a tax return pursuant to
this subsection but shall not promulgate any rules which unduly
restrict or hinder the transfers of suc h tax credit. The Department
of Transportation shall promulgate rules to permit verification of
the eligibility of an eligible ta xpayer’s expenditures for the
purpose of claiming the credit. The rules s hall provide for the
approval of qualified railroad reconstruction or replacement
expenditures prior to co mmencement of a project and provide a
certificate of verification upon compl etion of a project that uses
qualified railroad reconstruction or replacem ent expenditures. The
certificate of verification s hall satisfy all requirements of the
Tax Commission pertaining to the eligibility of the person claiming
the credit.
D. Any credits allowed pursuant to the provisions of subsection
A of this section but not used in any tax year may be carried over
in order to each of the five (5) years following the year of
qualification.
E. As used in this section:
1. “Class II and Class III rail road” means a railroad that is
classified by the United States Surface Tra nsportation Board as a
Class II or Class III railroa d;
2. “Eligible taxpayer” means any Class II or C lass III
railroad; and
3. “Qualified railroad reconstruction or replacement
expenditures” means expenditures for:
ENR. S. B. NO. 17x Page 3
a. track maintenance, natural disasters , and
reconstruction or replacement of railroad
infrastructure including track, roadbed, crossings,
bridges, industrial leads and track-related structures
owned or leased by a Class II or Class III railroad as
of January 1, 2006, or
b. new construction of industrial leads, switches, spurs
and sidings and extensions of existing sidings by a
Class II or Class III railroad.
F. The total amount of credits authorized by this section used
to offset tax shall be adjusted annually to limit the annual amount
of credits to Two Million Dollars ($2,000,000.00) for tax years 2018
and 2019 and Five Million Dollars ($5,000,000.00) for tax year 2020
and all subsequent tax years. The Tax Commission s hall annually
calculate and publish a percentage by which the credits auth orized
by this section shall be reduced so the total amount of credits used
to offset tax does not exceed the applicable annual limit. The
formula to be used for the percentage adju stment shall be the
applicable annual limit divided by the credits claimed in the second
preceding year.
G. Pursuant to subse ction F of this section, in the event the
total tax credits authorized by this section exceed the annual
applicable limit in any c alendar year, the Tax Commission shall
permit any excess over the annual a pplicable limit but shall factor
such excess into the percentage adjustment formula for subsequent
years.
SECTION 2. This act shall become effective N ovember 1, 2023.
ENR. S. B. NO. 17x Page 4
Passed the Senate the 24th day of May, 2023.
Presiding Officer of the Senate
Passed the House of Representatives the 26th day of May, 2023.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governor of the State of Oklahoma this _____ ____
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _______________________________ __