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SENATE FLOOR VERSION
February 26, 2024
AS AMENDED
SENATE BILL NO. 1863 By: Stewart
[ incentives - Local Development Act - districts -
effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 856, is
amended to read as follows:
Section 856. A. The governing body shall designate and adopt
the proposed boundaries of any district and the proposed boundaries
of any project area. Except as otherwise provided in this
subsection, any district s created by a city or town shall be
confined to that territory within the corporate limits of such city
or town and any districts cr eated by a county shall be c onfined to
that territory within the unincorporated areas of the county. Any
city, town, or county may by agreement jointly create a dis trict
with another entity.
B. Upon the adoption and approval of the project plan, the
governing body shall adopt an or dinance or resolution, whichever is
applicable, which:
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1. Describes the boundaries of districts and project areas
sufficiently definite to i dentify with ordinary and reasonable
certainty the territory included in them;
2. Creates the district as of a d ate provided in it or defers
determination of such date, provided such dat e must be no more than
ten (10) years after the date of approval of the project plan;
3. Assigns a name to the district for identification purposes.
The first district created sha ll be known as either an Incentive
District or Increment District Number On e, City, Town, or County of
__________, whichever is applicable. Each subsequently created
district shall be appropriately named and shall be assigned the next
consecutive number; a nd
4. Contains findings that:
a. the project area or district meets at le ast one of the
following criteria:
(1) is a reinvestment area,
(2) is a historic preservation area,
(3) is an enterprise area, or
(4) is a combination of the areas specified in
divisions (1), (2), and (3) of this subparagraph,
b. the improvement of the are a is likely to enhance the
value of other real property in the area and to
promote the general public interest. It shall not be
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necessary to identify the s pecific parcels meeting the
criteria,
c. the guidelines specified in paragraphs 1 and 2 of
Section 852 of this title shall be followed,
d. the aggregate net assessed value of the taxable
property in all districts as determined pursuant to
Section 862 of this title within th e city or town
shall not exceed twenty-five percent (25%) of the
total net assessed value of taxable propert y within
the city or town for cities or towns having a
population of fifty thousand (50,000) or more or shall
not exceed thirty-five percent (35%) of the total net
assessed value of taxable property within the city or
town for cities or towns having a population of less
than fifty thousand (50, 000),
e. for projects approved by a county, the aggregate net
assessed value of the taxable property in all
districts as determined pursuant to Section 862 of
this title within the county sha ll not exceed fifteen
percent (15%) of the total net assessed value of the
taxable property within the county,
f. the aggregate net assessed value of the ta xable
property in all districts as determined pursuant to
Section 862 of this title within the city, the town,
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or the county shall not exceed twenty -five percent
(25%) of the total net assessed value of any affected
school district located within the city, town , or
county, and
g. the land area of this district and all other districts
within the city, the town, or the county shall no t
exceed twenty-five percent (25%) of the tot al land
area of the city, the town , or the county.
For districts that are wholly or partially comprised or become
comprised of industries operating under NAICS code 518210, the
provisions of subparagraphs d through g of this paragraph shall not
apply.
C. It is the intention of the Legisla ture in adopting the Local
Development Act that no long-term contractual obligation be created
by the mere adoption of an ordinance or resolution es tablishing an
increment district. Notwithstanding any provisio n contained in an
ordinance, resolution , or project plan, an ordinance or resolution
establishing an increment district shall constitute a legislative
act and may be repealed, modified , or amended at any time during the
term of the increment district, by sub sequent action of the
governing body except as otherwise authorized pursuant to Sect ions
854 and 863 of this t itle; provided, however, that no such ordinance
shall be repealed, modified , or amended during the time that any
bonds payable from incremental rev enues are outstanding without the
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consent of the bondholders, if such bonds are issu ed pursuant to the
provisions of Article X, Section 35 of the Oklahoma Constitution
following its amendmen t by State Question No. 693.
D. However, nothing in the Local De velopment Act shall restrict
the ability of:
1. Any city, town, or county to:
a. issue debt in accordance wi th the applicable
provisions of Article X of the Oklahoma Constitution,
and any statutes enacted in connection therewith, and
b. use incremental reve nues derived from an increment
district to pay principal, interest , or premium
associated with such indebtedness; or
2. Any public entity, other than a city, town , or county, to:
a. issue tax apportionment bonds or notes in accordance
with Section 863 of this title or to issue other types
of revenue bonds or notes in accordance with other
applicable provision s of Oklahoma law, and
b. use incremental revenues derived from an increment
district to pay principal, interest , or premium
associated with such indebte dness.
SECTION 2. This act shall become effective November 1, 2024.
COMMITTEE REPORT BY: COMMITTEE ON FINANCE
February 26, 2024 - DO PASS