Req. No. 796 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 239 By: Wingard
AS INTRODUCED
An Act relating to income tax; amending 68 O.S. 2021,
Section 2357.32A, which relates to credit on the sale
of electricity generated by zero-emission facilities;
limiting credit to certain tax years; limiting carry
forward provisions; updating statutory language; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.32A, is
amended to read as follo ws:
Section 2357.32A. A. Except as otherwise provided in
subsection H of this section, for tax years beginning on or after
January 1, 2003 2003 through 2025, but with respect t o tax credits
for eligible renewable resources described by subparagraphs b, c and
d of paragraph 2 of this subsection, for tax years ending not later
than December 31, 2021, there shall be allowed a credit against the
tax imposed by Section 2355 of this t itle to a taxpayer for the
taxpayer’s production and sale to an unrelated pers on of electricity
generated by zero-emission facilities located in this state. As
used in this section:
Req. No. 796 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. “Electricity generated by zero -emission facilities” means
electricity that is exclusively produced by any facility located in
this state with a rated production capacity of one megawatt (1 mw)
or greater, constructed for the generation of electricity and placed
in operation after June 4, 2001, and with respect to electricit y
generated by wind for any facility placed in operation not later
than July 1, 2017, which utilizes eligible renewable resources as
its fuel source. The construction and operation of such facilities
shall result in no pollution or emissions that are or m ay be harmful
to the environment, pursuant to a determination by the Department of
Environmental Quality; and
2. “Eligible renewable resources ” means resources derived from:
a. wind,
b. moving water,
c. sun, or
d. geothermal energy.
B. For facilities pla ced in operation on or after January 1,
2003, and before January 1, 2007, the amount of the credit for the
electricity generated on or after January 1, 2003, but prior to
January 1, 2004, shall be seventy -five one-hundredths of one cent
($0.0075) for each kilowatt-hour of electricity generated by zero -
emission facilities. For electricity generated on or after January
1, 2004, but prior to January 1, 2007, the amount of the credit
shall be fifty one-hundredths of one cent ($0.0050) per kilowatt -
Req. No. 796 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
hour for electricity generated by zero -emission facilities. For
electricity generated on or after January 1, 2007, but prior to
January 1, 2012, the amount of the credit shall be twenty -five one-
hundredths of one cent ($0.0025) per kilowatt -hour of electricity
generated by zero-emission facilities. For facilities placed in
operation on or after January 1, 2007, and before January 1, 2021,
or with respect to electricity generated by wind for any facility
placed in operation not later than July 1, 2017, the amount of t he
credit for the electricity generated on or after January 1, 2007,
shall be fifty one-hundredths of one cent ($0.0050) for each
kilowatt-hour of electricity generated by zero -emission facilities.
C. Credits may be claimed with respect to electricity gen erated
on or after January 1, 2003, during a ten -year period following the
date that the facility is placed in operation on or after June 4,
2001, or through tax year 2025, whichever occurs earlier .
D. 1. For credits generated prior to January 1, 2014, i f the
credit allowed pursuant to this section exceeds the amount of income
taxes due or if there are no state income taxes due on the income of
the taxpayer, the amount of the credit allowed but not used in any
tax year may be carried forward as a credit a gainst subsequent
income tax liability for a period not exceeding ten (10) years.
2. Except as provided by paragraph 3 of this subsection, for
credits generated, but not used, on or after January 1, 2014, the
Oklahoma Tax Commission shall refund, at the t axpayer’s election,
Req. No. 796 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
directly to the taxpayer eighty -five percent (85%) of the face
amount of such credits. The direct refund of the credits pursuant
to this paragraph shall be available to all taxpayers, including,
without limitation, pass -through entities and taxpayers subject to
Section 2355 of this title, but shall not be available to any
entities falling within the provisions of subsection E of this
section. The amount of any direct refund of credits actually
received at the eighty -five percent (85%) level by the taxpayer
pursuant to this paragraph shall not be subject to the t ax imposed
by Section 2355 of this title. If the pass -through entity does not
file a claim for a direct refund, the pass -through entity shall
allocate the credit to one or more of the shareholders, partners or
members of the pass-through entity; provided, the total of all
credits refunded or allocated shall not exceed the amount of the
credit or refund to which the pass -through entity is entitled. For
the purposes of this paragr aph, “pass-through entity” means a
corporation that for the applicable tax yea r is treated as an S
corporation under the Internal Revenue Code of 1986, as amended,
general partnership, limited partnership, limited liability
partnership, trust or limited li ability company that for the
applicable tax year is not taxed as a corporation for federal income
tax purposes.
3. With respect to credits claimed for the first time on or
after July 1, 2019, or the effective date of this act, whichever
Req. No. 796 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
date last occurs, a taxpayer may irrevocably elect to not receive a
direct refund for a given ta x year. Any credits not directly
refunded may be carried forward as a credit against subsequent
income tax liability for a period not exceeding ten (10) years , but
in no event shall credit be carried forward to tax year 2026 or
subsequent tax years . If a taxpayer makes the irrevocable election
to carry over credits for a given tax year pursuant to this
paragraph, any credits remaining in the tenth year of carry forward
or tax year 2025, whichever occurs first, shall be refunded at
eighty-five percent (85%).
E. Any nontaxable entities, including agencies of the State of
Oklahoma or political subdivisions thereof, shall be eligible to
establish a transferable tax credit in the amo unt provided in
subsection B 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 o r anticipated income tax
liability under Section 2355 of this title. These ta x credit
provisions are authorized as an incentive to the State of Oklahoma,
its agencies and political subdivisions to encourage the expenditure
of funds in the development, con struction and utilization of
electricity from zero -emission facilities as defined in subsection A
of this section.
Req. No. 796 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
F. For credits generated prior to January 1, 2014, the amount
of the credit allowed, but not used, shall be freely transferable at
any time during the ten (10) years following the year of
qualification. Any person to whom or to which a tax credit is
transferred shall have only such rights to claim and use the credit
under the terms that would have applied to the entity by whom or by
which the tax credit was transferred. The provisions of this
subsection shall not limit the ability of a tax credit transferee to
reduce the tax liability of the transferee, regardless of the actual
tax liability of the tax credit transferor, for the relevant taxa ble
period. The transferor initially allowed the credit and any
subsequent transferees shall jointly file a copy of any written
transfer agreement with the Oklahoma Tax Commission within thirty
(30) days of the transfer. The written agreement shall conta in the
name, address and taxpayer identification number or Social Security
number of the parties to the transfer, the amount of the credit
being transferred, the year the credit was originally allowed to the
transferor, and the tax year or years for which the credit may be
claimed. The Tax Commission may promulgate rules to permit
verification of the validity and timeliness of the tax credit
claimed upon a tax return pursuant to this subsection but shall not
promulgate any rules that unduly restrict or hin der the transfers of
such tax credit. The tax credit allowed by this section, upon the
election of the taxpayer, may be claimed as a payment of tax, a
Req. No. 796 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
prepayment of tax or a payment of estimated tax for purposes of
Section 1803 or Section 2355 of this tit le.
G. For electricity generation produced and sold in a calendar
year, the tax credit allowed by the provisions of this section, upon
election of the taxpayer, shall be treated and may be claimed as a
payment of tax, a prepayment of tax or a payment of e stimated tax
for purposes of Section 2355 of this title on or after July 1 of the
following calendar year.
H. No credit otherwise authorized by the provisions of this
section may be claimed for any event, transaction, investment,
expenditure or other act occurring on or after July 1, 2010, for
which the credit would otherwise be al lowable until the provisions
of this subsection shall cease to be operative on July 1, 2011.
Beginning July 1, 2011, the credit authorized by this section may be
claimed for any event, transaction, investment, expenditure or other
act occurring on or after July 1, 2010, according to the provisions
of this section. Any tax credits which accrue during the period of
July 1, 2010, through June 30, 2011, may not be claimed for any
period prior to the taxable year beginning January 1, 2012. No
credits which accrue during the period of July 1, 2010, through June
30, 2011, may be used to file an amended tax return for any taxable
year prior to the taxable year beginning January 1, 2012.
I. For tax years beginning on or after January 1, 2019, the
total amount of credits authorized by this section with respect to
Req. No. 796 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
eligible renewable resources described by subparagraphs b, c and d
of paragraph 2 of subsection A of this section used to offse t tax or
paid as a refund shall be adjusted annually to limit the annual
amount of credits to Five Hundred Thousand Dollars ($500,000.00).
The Tax Commission shall annually calculate and publish a percentage
by which the credits authorized by subparagraph s b, c and d of
paragraph 2 of subsection A of this section shall be reduced so the
total amount of credits used to offset tax or paid as a refund does
not exceed Five Hundred Thousand Dollars ($500,000.00) per year.
The formula to be used for the percent age adjustment shall be Five
Hundred Thousand Dollars ($500,000.00) divided by the credits
claimed in the second preceding year.
J. Pursuant to subsection I of this section, in the event the
total tax credits authorized by this section with respect to
eligible renewable resources described by subparagraphs b, c and d
of paragraph 2 of subsection A of this section exceed Five Hundred
Thousand Dollars ($500,000.00) in any calendar year, the Tax
Commission shall permit any excess over Five Hundred Thousand
Dollars ($500,000.00) but shall factor such excess into the
percentage adjustmen t formula for subsequent years.
K. Any credits authorized by this section with respect to
eligible renewable resources described by subparagraphs b, c and d
of paragraph 2 of su bsection A of this section not used or unable to
Req. No. 796 Page 9 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
be used because of the provisions of subsection I or J of this
section may be carried over until such credits are fully used.
L. The Tax Commission shall prepare an annual report and submit
it to the Office of the State Secretary of Energy and Environment,
the Governor, the Speaker o f the Oklahoma House of Representatives
and the President Pro Tempore of the Oklahoma State Senate
summarizing the amount of credits allowed pursuant to subparagraphs
b, c and d of paragraph 2 of subsection A of this section. The
Secretary of Energy and Environment shall submit recommendations for
changes to the tax credit to the Governor, the Speaker of the
Oklahoma House of Representatives and the President Pro Tempore of
the Oklahoma State Senate within sixty (60) days after receipt of
the report from the Oklahoma Tax Commission.
SECTION 2. This act shall become effective November 1, 2025.
60-1-796 QD 12/30/2024 5:20:05 PM