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SENATE FLOOR VERSION
April 8, 2024
AS AMENDED
ENGROSSED HOUSE
BILL NO. 3426 By: Archer, Menz, Alonso-
Sandoval, and Staires of
the House
and
Haste of the Senate
[ revenue and taxation - income tax credits for
qualified space transportation vehic le providers -
taxable years – definitions - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.42, is
amended to read as follows:
Section 2357.42 A. For tax years beginning after December 31,
2000, and ending before January 1, 2000 through 2009 and 2024
through 2030, there shall be allowed to an investor making an
eligible investment a credit against the tax imposed by Section 2355
or 2370 of this title or Section 624 or 628 of Title 36 of the
Oklahoma Statutes. Th e credit may be used in the payment of
estimated tax payments for the tax imposed by Section 624 or 628 of
Title 36 of the Oklahoma Statutes. The credit shall be in the
amount as set forth in su bsection G of this section.
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B. The amount of the credit shall be transferable to subsequent
transferees.
C. As used in this section:
1. "Eligible investment" means an investment made during a
period not earlier than January 1, 2001, and not later than D ecember
31, 2003, and for the period not earlier than January 1, 2024, and
not later than December 31, 2029, in a qualified space
transportation vehicle provider that:
a. is headquartered in this state or is ultimately
controlled by an entity headquartered in this state,
or
b. has been certified by the Oklahoma Tax Commission as
meeting the following minimum qualifications:
(1) is included within the definition of "basic
industry" as set forth in division (1) of
subparagraph a of paragraph 1 of subsection A of
Section 3603 of this title and has been
preapproved by the Oklahoma Department of
Commerce to receive incentive payments pursuant
to the Oklahoma Quality Jobs Program Act or the
Former Military Facility Development Act. The
Department shall establish a process for
preapproval of applicants for the Oklahoma
Quality Jobs Program Act or the Former Military
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Facility Development Act for purposes of this
division. The qualified space transportation
vehicle provider shall agree to submit such
information as may be required under this section
and the Oklahoma Quality J obs Program Act or the
Former Military Facility Development Act to allow
the Tax Commission to determine the amount of the
tax credit allowed pursuant to the provisions of
this section and the am ount of incentive payments
allowed pursuant to the Oklahoma Quality Jobs
Program Act or the Former Military Facility
Development Act for purposes of subsection K of
this section,
(2) has equity capitalization of not less than Ten
Million Dollars ($10,000,0 00.00) Twenty Million
Dollars ($20,000,000.00) , and
(3) has received a commitment by a local governmental
entity, whether by contract, letter agreement,
terms sheet, resolution, ordinance or indenture,
to provide funds, personal property or real
property in the aggregate amount of Fifteen
Million Dollars ($15,000,000.00) One Million
Dollars ($1,000,000.00) or more which will be
utilized by one or more qualified space
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transportation vehicle providers. For purposes
of this division, such property may include
personal or real property owned by a local
governmental entity which has been leased to a
state authority pursuant to a long -term lease or
personal or real property which a local
governmental entity has transferred to a state
authority. If such property has been so
transferred, the commitment required by this
division may be satisfied if the state authority
agrees in writing to make the property so
transferred available for use by one or more
qualified space transportation vehicle providers;
2. "Qualified space transportation vehicle provider " means any
commercial provider organized under the laws of this state as a
corporation or a limited liability company and engaged in designing,
developing, producing, or operating commercial space transportation
vehicles in this state;
3. "Space transportation vehicle " includes all types of
vehicles or orbital or suborbital spacecraft, whether now in
existence, developed in the future, or currently under design,
development, construction, reconstruction, or reconditi oning,
constructed in this state and owned by a qualified spa ce
transportation vehicle provider, for the purpose of operating in, or
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transporting a payload to, from, or within, outer space, or in
suborbital trajectory, and includes any component of such ve hicle or
spacecraft not specifically designed or adapted for a payload; and
4. "Subsequently refunded or returned ", when used in reference
to an eligible investment, means an actual redemption by the
qualified space transportation vehicle provider of the securities or
other indicia of ownership in the qualified spa ce transportation
vehicle provider received by the investor from the investor 's
investment. The failure to allow the tax credits or the recapture
of the tax credits shall not affect the validity of the tax credits
in the hands of a transferee of the initial investor or subsequent
transferees. Provided, an investor to whom an eligible investment,
or portion thereof, is subsequently refunded or returned shall
reimburse the Tax Commission the amoun t of any credits claimed by a
transferee with respect to any such amount.
D. The tax credit provided for in this section shall not be
allowed or, if already claimed, shall be subject to recapture as to
the initial investor or investors with respect to any amount of an
eligible investment made which is subsequently refunded or returned
to such investor. Further, a tax credit shall not be allowed to an
investor making an eligible investment in a qualified space
transportation vehicle provider or shall be su bject to recapture as
to the initial investor or investors if previously allowed if the
qualified space transportation vehicle provider in which the
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investment was made fails to make use of such funds or property
within three (3) years of the date the tax credit was allowed. Any
recapture under this subsection shall only apply as to that part of
the tax credit as is associated with the amount of the investment
which is subsequently refunded or returned or which is not utilized.
E. The Tax Commission shall :
1. Certify, upon request of an authorized agent or
representative of a qualified space transportation vehicle provider,
that the qualified space transportation vehicle provider for which
the certification is sought meets the qualifications prescribed by
subparagraph b of paragraph 1 of subsection C of this section. The
certification shall be in writing and signed by an authorized
representative of the Tax Commission and, for purposes of
determining qualifications of a qualified space transportation
vehicle provider in which an investment may be eligible for the
credit authorized by this section, shall be binding upon the Tax
Commission; and
2. Issue a certificate to an investor that provides adequate
documentation of qualification for the credit authori zed by this
section even if the credit may not be claimed until after the date
upon which the certificate is requested. Upon issuance, the
certificate shall be evidence that an investor or a transferee of
the original tax credit claimant submitting the ce rtificate, or a
certified copy thereof, with the relevant tax return or other form,
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has the legal right to exercise the credit in order to reduce the
relevant tax liability for the period authorized by this section.
F. The maximum amount of all eligible i nvestments for which tax
credits may be claimed under this section shall be Thirty Million
Dollars ($30,000,000.00). If more than one qualified space
transportation vehicle provider has been certified by the Tax
Commission pursuant to the provisions of su bsection E of this
section, the investors in the first such a pproved qualified space
transportation vehicle provider shall be entitled to a credit based
on their investment of the lesser of their eligible investment or
Thirty Million Dollars ($30,000,000.0 0). The investors in the
second such approved qualified space transportation vehicle provider
shall then be entitled to a credit based on their investment of the
lesser of their eligible investment or the difference between the
total eligible investments in previously approved qualified space
transportation vehicle providers and Thirty Million Dollars
($30,000,000.00). This same procedure will apply for all
subsequently approved qualified space transportation vehicle
providers. If the amount of eligible investments exceeds the amount
upon which the tax credit may be claimed as provided herein,
investors shall be allowed a share of the amount of the available
tax credit in order of the dates of receipt of certification
therefor by the Tax Commission pursua nt to the provisions of
paragraph 1 of subsection E of this s ection.
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G. The amount of the tax credit allowed pursuant to the
provisions of subsection A of this section shall be deemed fully
earned as of the date of the investment and shall be fully
redeemable as follows:
Period for Which
Tax Liability Determined Credit Allowed
Tax year subsequent to year of
eligible investment 10.6% of eligible
investment
Second tax year subsequent to year
of eligible investment 11.236% of eligible
investment
Third tax year subsequent to year
of eligible investment 11.910% of eligible
investment
Fourth tax year subsequent to year
of eligible investment 12.624% of eligible
investment
Fifth tax year subsequent to year
of eligible investment 13.381% of eligible
investment
H. The amount of a tax credit allowed pursuant to the
provisions of this section not used in payment of taxes due in the
year in which such credit is allowed pursuant to subsection G of
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this section may be used as a credit against subsequent tax
liability of the investor or a subsequent transferee for a per iod
not to exceed three (3) years from the year in which such credit is
originally allowed.
I. The Tax Commission shall develop and issue appropriate forms
and instructions to enable investors t o claim the tax credit
provided for in this section.
J. A qualified space transportation vehicle provider in which
an eligible investment qualifies for a credit authorized by this
section shall maintain a record of investment made in the qualified
space transportation vehicle provider for the period beginning
January 1, 2001, and ending December 31, 2003 2029. The qualified
space transportation vehicle provider shall notify the Tax
Commission not later than January 31, 2004, one month after the end
of the year in which the investment is made of the total investment
amount for such period. Any such qualified space transportation
vehicle provider which refunds or returns any amount of an eligible
investment to the investor shall notify the Tax Commission in
writing of the amount and recipient of such refunds or retur ns. The
Tax Commission shall compute the maximum amount of credits available
pursuant to this section based upon notification of the investment
amount transmitted to the Tax Commission by the qu alified space
transportation vehicle provider.
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K. A qualified space transportation vehicle provider in which
eligible investments qualify for the tax credit authorized by this
section shall not receive incentive payments pursuant to the
Oklahoma Quality Jobs Program Act or the Former Military Facility
Development Act until the total of such incentive payments the
qualified space transportation vehicle provider would otherwise
receive exceeds the total amount of the credit authorized by this
section as computed by the Tax Commission pursuant to subsection J
of this section. The amount of incentive payments for any year
which would otherwise be paid to the qualified space transportation
vehicle provider shall be distributed as follows:
1. If the amount of such incentive payments equals or exceeds
the amount of the ta x credit for the year, the amount of such
payments which is equal to the amount of the tax credit shall be
apportioned as if collected from the tax imposed by Section 2355 or
2370 of this title o r Section 624 or 628 of Title 36 of the Oklahoma
Statutes according to the tax against which the credit was claimed.
The amount of such payments which is in excess of the amount of the
tax credit shall be retained by the Tax Commission to be paid as
provided for in this paragraph for subsequent years for which the
tax credit is allowed to the qualified space transportation vehicle
provider;
2. If the amount of such incentive payments and any amount
retained by the Tax Commission pursuant to the provisions of
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paragraph 1 of this subsection is less than the amount of the tax
credit for the year, notwithstanding the provisions of Section 1727
of Title 69 of the Oklahoma Statutes, the Tax Commission shall
withhold a portion of the taxes levied and collected pu rsuant to the
provisions of paragraph 1 of subsection A of Se ction 500.4 of this
title which would otherwise be paid to the Department of
Transportation by the Oklahoma Transportation Authority pursuant to
the provisions of paragraph (2) of subsection (d) of Section 1730 of
Title 69 of the Oklahoma Statutes equal to the amount of the
deficit.
The Tax Commission shall apportion all funds collected pursuant
to the provisions of this paragraph as if collected from the tax
imposed by Section 2355 or 2370 of thi s title or Section 624 or 628
of Title 36 of the Oklahoma Sta tutes according to the tax against
which the credit was claimed; and
3. If any amount is withheld by or paid to the Tax Commission
pursuant to the provisions of paragraph 2 of this subsection, t he
amount of incentive payments to be subsequently paid to the
qualified space transportation vehicle provider shall be apportioned
by the Tax Commission to the Department of Transportation until such
time as all amounts paid pursuant to the provisions of paragraph 2
of this subsection are repaid .
L. A qualified space transportation vehicle provider in which
investments qualify for the credit allowed by this section shall not
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be entitled to payment of any incentive payments accrued prior to
January 1, 2001, under the Oklahoma Quality Jobs Program Act or the
Former Military Facility Development Act.
M. Notwithstanding the provisions of this section, a qualified
space transportation vehicle provider may, prior to the issuance of
a tax credit with respect to the qualified space transportation
vehicle provider pursuant to the provisions of this section, elect
to receive incentive payments pursuant to the provisions of the
Oklahoma Quality Jobs Program Act or the Former Military Facility
Development Act in lieu of allowing the tax credit provided for
herein, in which case it shall so notify the Tax Commission in
writing and the provisions of this section shall not be applicable.
N. Except as provided by subsection M of this section, no
qualified space transporta tion vehicle provider which would
otherwise qualify for incen tive payments pursuant to the provisions
of the Oklahoma Quality Jobs Program Act or the Former Military
Facility Development Act may receive such incentive payments prior
to January 1, 2003.
O. No qualified space transportation vehicle provider which has
made application to the Oklahoma Department of Commerce or which has
executed any agreement with the Oklahoma Department of Commerce with
respect to the receipt of incentive payments pursuant to the
provisions of the Oklahoma Quality Jobs Program Act or t he Former
Military Facility Development Act or which has received any
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incentive payment pursuant to the Oklahoma Quality Jobs Program Act
or the Former Military Facility Development Act prior to May 24,
2001, may be certified for purposes of determining eligibility for
the credit authorized by this section.
SECTION 2. This act shall become effective November 1, 2024.
COMMITTEE REPORT BY: COMMITTEE ON FINANCE
April 8, 2024 - DO PASS AS AMENDED