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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
COMMITTEE SUBSTITUTE
FOR ENGROSSED
SENATE BILL NO. 484 By: Paxton of the Senate
and
McDugle and Boles of the
House
COMMITTEE SUBSTITUTE
[ revenue and taxation – Oklahoma Geothermal
Investment Affordability Act – tax credit –
effective date ]
BE IT ENACTED BY THE PEOP LE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2357.407 of Title 68, unless
there is created a duplication in numbering, read s as follows:
A. This act shall be known and may be cited as the "Oklahoma
Geothermal Investment Affordability Act".
B. As used in this section:
1. "Federal geothermal energy tax credit" means the federal tax
credit provided in Section 26 U.S. Code Section 48 E as applied to
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eligible geothermal projects as described in Section 26 U.S. Code
Section 48, as amended;
4. "Oklahoma Geothermal Investment Affordability Tax Credit"
means the tax credit created by this section;
5. "Qualified geothermal project" means a project related to
energy property which uses the ground or ground water as a thermal
energy source to heat a structure or as a thermal energy sink t o
cool a structure; and
6. "Taxpayer" means a person, firm or corporation subject to
the tax imposed by Section 2355 of Title 68 of the Oklahoma Statutes
or an insurance company subject to the t ax imposed by Sections 624
and 628 of Title 36 of the Oklahoma Statutes or other financial
institution subject to the tax imposed by Section 2370 of this
title.
C. 1. There is hereby created for state tax years beginning on
or after January 1, 2024 , and ending no later than December 31 ,
2033, a tax credit for qual ified projects placed in service in this
state. Such credit shall be equal to Five Hundred Dollars ( $500.00)
per ton of increased geothermal capacity resulting from a qualified
project.
2. For qualified projects placed in service after the effective
date of this act, the amount of total state tax credits utilized
under the provisions of this act shall not exceed Twenty Million
Dollars ($20,000,000.00).
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D. Any nontaxable entities, including agencies of the State of
Oklahoma or political subdivisions there of, shall be eligible to
establish a transferable tax credit in the amount provided in
subsection C of this section. Such tax credit shall be a property
right available to a state agency or political subdivision of this
state to transfer or sell to a taxable entity, whether individual or
corporate, who shall have an actual or anticipated income tax
liability under Section 2355 of Title 68 of the Oklahoma Statutes .
These tax credit pro visions are authorized as an incentive to the
State of Oklahoma, its age ncies and political subdivisions to
encourage the expenditure of funds i n the development, construction
and utilization of geothermal projects as described i n this act.
E. A taxpayer owning an interest in an investment in a
qualified project shall be allo wed Oklahoma Geothermal Investment
Affordability Tax Credits under this section for tax years beginning
on or after January 1, 20 24, which tax credits shall be allocated
among some or all of the partners, members, or shareholders of the
taxpayer owning such interest in any manner agreed to by such
partners, members or sharehol ders. Such taxpayer may as sign its
interest in the investment.
F. An insurance company claiming a credit again st state premium
tax or retaliatory tax or any other tax imposed by Sections 624 or
628 of Title 36 of the Oklahoma Statu tes shall not be requir ed to
pay any additional retaliatory tax under Section 628 of Title 36 of
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the Oklahoma Statutes as a result o f claiming the credit. The
credit may fully offset any retaliatory tax imp osed by Section 628
of Title 36 of the Oklahoma S tatutes.
G. Any credit claimed but not used in a taxable year may be
carried forward two (2) subsequent tax able years.
H. The owner of a qualified project eligible for the credit
authorized by this section shall submit, at the time of filing the
tax return with the Oklahoma Tax Commission, along with any
additional information requested by the Oklahoma Tax Com mission to
determine eligibility for credits offered under the provisions of
this act.
I. If under Section 42 of the Internal Revenue Code of 1986, as
amended, a portion of any related federal geothermal energy tax
credits taken on a qualified project is required to be recaptured
during the first ten (10) years after a project is placed in
service, the taxpayer claiming Oklahoma Geothermal Investment
Affordability Tax Credits with respect to such project shall also be
required to recapture a portion of suc h credits. The amount of
Oklahoma Geothermal Investment Affordability Tax Credits subject to
recapture shall be proportionally equal to the amount of federal
geothermal energy tax credits subject to recapture.
J. The Oklahoma Tax Commission may require t he filing of an
application for prequalification or request additional documentation
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necessary to determine the accuracy and eligibility for a tax credit
claimed under the provisions of this act.
K. The Oklahoma Tax Commission shall promulgate rules as
necessary to administer the provisions of this act; including but
not limited to, implementation of an advanced allocation
prequalification applicatio n process in order to a dminister the cap
on total credits as established in subsection C of this section.
SECTION 2. This act shall become effective January 1, 2024.
COMMITTEE REPORT BY: CO MMITTEE ON APPROPRIATIONS AND BUDGET , dated
04/20/2023 - DO PASS, As Amended and Coauthored.