OK
Oklahoma Senate Bill SB470

Oklahoma 2025 Regular Session

Oklahoma Senate Bill SB470 Compare Versions

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5353 STATE OF OKLAHOMA
5454
5555 1st Session of the 60th Legislature (2025)
5656
5757 SENATE BILL 470 By: Kirt
5858
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6363 AS INTRODUCED
6464
6565 An Act relating to incentive payments; amending 68
6666 O.S. 2021, Section 3604, as last amended by Section
6767 157, Chapter 452, O.S.L. 2024 (68 O.S. Supp. 2024,
6868 Section 3604), which relates to the Oklahoma Quality
6969 Jobs Program Act; requiring establishment to provide
7070 certain leave to qualify to receive incentive
7171 payments; updating statutory reference s; updating
7272 statutory language; and providing an ef fective date.
7373
7474
7575
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7777 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA :
7878 SECTION 1. AMENDATORY 68 O.S. 2021, Section 3604, as
7979 last amended by Section 157, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
8080 2024, Section 3604), is amen ded to read as follows:
8181 Section 3604. A. Except as otherwise provided in subsection I
8282 or subsection L of this section, an establishment which meets the
8383 qualifications specified in the Oklahoma Quality Jobs Program Act
8484 may receive quarterly incentive paym ents for a ten-year period from
8585 the Oklahoma Tax Commission pursuant to the pr ovisions of the
8686 Oklahoma Quality Jobs Program Act; provided, such an establishment
8787 defined or classified in the NAICS Manual under U.S. Industry No.
8888 711211 (2007 version) may rec eive quarterly incentive payments for a
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140140 thirty-year period. The amount of such payments shall be equal to
141141 the net benefit rate multiplied by the actual gross payroll of new
142142 direct jobs for a calendar quarter as verified by the Oklahoma
143143 Employment Security Commission. For an establishment defined or
144144 classified in the NAICS Manual u nder U.S. Industry No. 711211 (2007
145145 version) that entered into a contract pursuant to the Oklahoma
146146 Quality Jobs Program Act with the Oklahoma Department of Commerce
147147 before the effective date of this act November 1, 2023:
148148 1. The contract shall be extended from fifteen (15) years to
149149 thirty (30) years; and
150150 2. The extension shall not include additional money awarded but
151151 shall allow for payments to continue for the thirty -year period, or
152152 until the net benefit for the new direct jobs for the original
153153 contract has been fully paid out as calculated based upon the
154154 original application.
155155 B. In order to receive incentive payments, an establishment
156156 shall apply to the Oklahoma Department of C ommerce. The application
157157 shall be on a form prescribed by the Department and shall contain
158158 such information as may be required by the Department to determine
159159 if the applicant is qualified. An establishment may apply for an
160160 effective date for a project, w hich shall not be more than twenty -
161161 four (24) months from the date the applicat ion is submitted to the
162162 Department.
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214214 C. Except as otherwise provided by subsection D or E of this
215215 section, in order to qualify to receive such payments, the
216216 establishment applyin g shall be required to:
217217 1. Be engaged in a basic industry;
218218 2. Have an annual gross payroll for new direct jobs projected
219219 by the Oklahoma Department of Commerce to equal or exceed Two
220220 Million Five Hundred Thousand Dollars ($2,500,000.00) within three
221221 (3) years of the first complete calendar quarter following the start
222222 date; and
223223 3. Have a number of full -time-equivalent employees subject to
224224 the tax imposed by Section 2355 of this title and working an annual
225225 average of thirty (30) or more hours per week in n ew direct jobs
226226 located in this state equal to or in excess of eighty percent (80%)
227227 of the total number of new direct jobs ; and
228228 4. For applications submitted after the effective date of this
229229 act, provide at least twelve (12) weeks of paid family leave and at
230230 least two (2) weeks of additional paid leave for new direct jobs.
231231 For the purposes of this paragraph, “paid family leave” shall
232232 include:
233233 a. all leave entitled to eligible employees as otherwise
234234 provided in the Family and Medical Leave Act of 1993,
235235 29 U.S.C., Section 2601 et seq., and
236236 b. payment for leave equal to at least one hundred
237237 percent (100%) of the employee ’s wage.
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289289 D. In order to qualify to receive incentive payments as
290290 authorized by the Oklahoma Quality Jobs Program Act, an
291291 establishment engage d in an activity described under:
292292 1. Industry Group Nos. 3111 through 3119 of the NAICS Manual
293293 shall be required to:
294294 a. have an annual gross payroll for new direct jobs
295295 projected by the Oklahoma Department of Commerce to
296296 equal or exceed One Million Five H undred Thousand
297297 Dollars ($1,500,000.00) within three (3) years of the
298298 first complete calendar quarter following the start
299299 date and make, or which will make within one (1) year,
300300 at least seventy-five percent (75%) of its total
301301 sales, as determined by the In centive Approval
302302 Committee pursuant to the provisions of subsection B
303303 of Section 3603 of this title, to out -of-state
304304 customers or buyers, to in -state customers or buyers
305305 if the product or service is resold by the purchaser
306306 to an out-of-state customer or bu yer for ultimate use,
307307 or to the federal government, unless the annual gross
308308 payroll equals or exceeds Two Million Five Hundred
309309 Thousand Dollars ($2,500,000.00) in which case the
310310 requirements for purchase of output provided by this
311311 subparagraph shall not ap ply, and
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363363 b. have a number of full -time-equivalent employees
364364 working an average of thirty (30) or more hours per
365365 week in new direct jobs equal to or in excess of
366366 eighty percent (80%) of the total number of new direct
367367 jobs; and
368368 2. Division (4) of subparagra ph a of paragraph 1 of subsection
369369 A of Section 3603 of this title , shall be required to:
370370 a. have an annual gross payroll for new direct jobs
371371 projected by the Oklahoma Department of Commerce to
372372 equal or exceed One Million Five Hundred Thousand
373373 Dollars ($1,500,000.00) within three (3) years of the
374374 first complete calendar quarter follo wing the start
375375 date, and
376376 b. have a number of full -time-equivalent employees
377377 working an average of thirty (30) or more hours per
378378 week in new direct jobs equal to or in excess of
379379 eighty percent (80%) of the total number of new direct
380380 jobs.
381381 E. 1. An establishment which locates its principal business
382382 activity within a site consisting of at least ten (10) acres which:
383383 a. is a federal Superfund removal site,
384384 b. is listed on the Nation al Priorities List established
385385 under 42 U.S.C., Section 9605 of Title 42 of the
386386 United States Code,
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438438 c. has been formally deferred to the state in lieu of
439439 listing on the National Priorities List, or
440440 d. has been determined by the Department of Environmental
441441 Quality to be contaminated by any substance regulated
442442 by a federal or state statute governing environmental
443443 conditions for real property pursuant to an order of
444444 the Department of Environmental Quality,
445445 shall qualify for incentive payments irrespective of i ts actual
446446 gross payroll or the number of full -time-equivalent employees
447447 engaged in new direct jobs.
448448 2. In order to qualify for the incentive payments pursuant to
449449 this subsection, the establishment shall conduct the activity
450450 resulting in at least fifty per cent (50%) of its Oklahoma taxable
451451 income or adjusted gross income, as determined under Section 2358 of
452452 this title, whether from the sale of products or services or both
453453 products and services, at the physical location which has been
454454 determined not to compl y with the federal or state statutes
455455 described in this subsection with respect to environmental
456456 conditions for real property. The establishment shall be subject to
457457 all other requirements of the Oklahoma Quality Jobs Program Act
458458 other than the exemptions p rovided by this subsection.
459459 3. In order to qualify for the incentive payments pursuant to
460460 this subsection, the entity shall obtain from the Department of
461461 Environmental Quality a letter of concurrence that:
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513513 a. the site designated by the entity does meet on e or
514514 more of the requirements listed in paragraph 1 of this
515515 subsection, and
516516 b. the site is being or has been remediated to a level
517517 which is consistent with the intended use of the
518518 property.
519519 In making its determination, the Department of Environmental
520520 Quality may rely on existing data and information available to it,
521521 but may also require the applying entity to provide additional data
522522 and information, as necessary.
523523 4. If authorized by the Department of Environmental Quality
524524 pursuant to paragraph 3 of this su bsection, the entity may utilize a
525525 remediated portion of the property for its intended purpose prior to
526526 remediation of the remainder of the site, and shall qualify for
527527 incentive payments based on employment associated with the portion
528528 of the site.
529529 F. Except as otherwise provided by subsection G of this
530530 section, for applications submitted on and after June 4, 2003, in
531531 order to qualify to receive incentive payments as authorized by the
532532 Oklahoma Quality Jobs Program Act, in addition to other
533533 qualifications specified herein, an establishment shall be required
534534 to pay new direct jobs an a verage annualized wage which equals or
535535 exceeds:
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587587 1. One hundred ten percent (110%) of the average county wage as
588588 determined by the Oklahoma Department of Commerce based on the mo st
589589 recent U.S. Department of Commerce data for the county in which the
590590 new direct jobs are located. For purposes of this paragraph, health
591591 care premiums paid by the applicant for individuals in new direct
592592 jobs shall be included in the annualized wage; or
593593 2. One hundred percent (100%) of the average county wage as
594594 that percentage is determined by the Oklahoma Department of Commerce
595595 based upon the most recent U.S. Department of Commerce data for the
596596 county in which the new jobs are located. For purposes of this
597597 paragraph, health care premiums paid by the applicant for
598598 individuals in new direct jobs shall not be included in the
599599 annualized wage.
600600 Provided, no average wage requirement shall exceed Twenty -five
601601 Thousand Dollars ($25,000.00) , in any county. This maximum wage
602602 threshold shall be indexed and modified from time to time based o n
603603 the latest Consumer Price Index year -to-date percent change release
604604 as of the date of the annual average county wage data release from
605605 the Bureau of Economic Analysis of the U. S. Department of Commerce.
606606 G. 1. As used in this subsection, “opportunity zone” means one
607607 or more census tracts in which, according to the most recent Federal
608608 Decennial Census, at least thirty percent (30%) of the residents
609609 have annual gross household in comes from all sources below the
610610 poverty guidelines established by the U.S. De partment of Health and
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662662 Human Services. An establishment which is otherwise qualified to
663663 receive incentive payments and which locates its principal business
664664 activity in an opport unity zone shall not be subject to the
665665 requirements of subsection F of this section.
666666 2. As used in this subsection:
667667 a. “negative economic event ” means:
668668 (1) a man-made disaster or natural disaster as
669669 defined in Section 683.3 of Title 63 of the
670670 Oklahoma Statutes, resulting in the loss of a
671671 significant number of jobs within a particul ar
672672 county of this state, or
673673 (2) an economic circumstance in which a significant
674674 number of jobs within a particular county of this
675675 state have been lost due to an establishment
676676 changing its structure, consolidating with
677677 another establishment, closing or moving all or
678678 part of its operations out of this state, and
679679 b. “significant number of jobs ” means Local Area
680680 Unemployment Statistics (LAUS) data, as determined by
681681 the Bureau of Labor Statistics, for a county which are
682682 equal to or in excess of five percent (5%) of the
683683 total amount of Local Area Unemployment Statistics
684684 (LAUS) data for that county for the calendar year, or
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736736 most recent twelve-month period in which employment is
737737 measured, preceding the event.
738738 An establishment which is otherwise qualified to receive
739739 incentive payments and which locates in a county in which a negative
740740 economic event has occurred within the eighteen -month period
741741 preceding the start date shall not be subject to the requirements of
742742 subsection F of this section; provided, an establishment shall not
743743 be eligible to receive incentive payments based upon a negative
744744 economic event with respect to jobs that are transferred from one
745745 county of this state to another.
746746 H. The Oklahoma Department of Commerce shall determine if the
747747 applicant is qualified to receive incentive payments.
748748 I. If the applicant is determined to be qualified by the
749749 Oklahoma Department of Commerce and is not subject to the provisions
750750 of subparagraph d of paragraph 7 of subsection A of Section 3603 of
751751 this title, the Department shall conduct a cost/benefit analysis to
752752 determine the estimated net direct state benefits and the net
753753 benefit rate applicable for a ten -year period beginning with the
754754 first complete calendar quarter following the start date and to
755755 estimate the amount of gross payroll for a ten -year period beginning
756756 with the first complete calendar quarter following the start date or
757757 for a thirty-year period for an establishment defined or classif ied
758758 in the NAICS Manual under U.S. Industry No. 711211 (2007 version).
759759 In conducting such cost/benefit analysis, the Department shall
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811811 consider quantitative factors, such as the anticipated level of new
812812 tax revenues to the state along with the added cost t o the state of
813813 providing services, and such other criteria as deemed appropriate by
814814 the Department. In no event shall incentive payments, cumulatively,
815815 exceed the estimated net direct state benefits, except for
816816 applicants subject to the provisions of subp aragraph d of paragraph
817817 7 of subsection A of Section 3603 of this title.
818818 J. Upon approval of such an application, the Oklahoma
819819 Department of Commerce shall notify the Tax Commission and shall
820820 provide it with a copy of the contract and the results of the
821821 cost/benefit analysis. The Tax Commission may require the qualified
822822 establishment to submit such additional information as may be
823823 necessary to administer the provisions of the Oklahoma Quality Jobs
824824 Program Act. The approved establishment shall file quarte rly claims
825825 with the Tax Commission and shall continue to file such quarterly
826826 claims during the ten -year incentive period to show its continued
827827 eligibility for incentive payments, as provided in Section 3606 of
828828 this title, or until it is no longer qualified to receive incentive
829829 payments. The establishment may be audited by the Tax Commission to
830830 verify such eligibility. Once the establishment is approved, an
831831 agreement shall be deemed to exist between the establishment and the
832832 State of Oklahoma, requiring th e continued incentive payment to be
833833 made as long as the establishment retains its eligibility as defined
834834 in and established pursuant to this section and Sections 3603 and
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886886 3606 of this title and within the limitations contained in the
887887 Oklahoma Quality Jobs Program Act, which existed at the time of such
888888 approval. An establishment described in this subsection shall be
889889 required to repay all incentive payments received under the Oklahoma
890890 Quality Jobs Program Act if the establishment is determined by the
891891 Oklahoma Tax Commission to no longer have business operations in the
892892 state within three (3) years from the beginning of the calendar
893893 quarter for which the first incentive payment claim is filed.
894894 K. A municipality with a population of less than one hundred
895895 thousand (100,000) persons in which an establishment eligible to
896896 receive quarterly incentive payments pursuant to the provisions of
897897 this section is located may file a claim with the Tax Commission for
898898 up to twenty-five percent (25%) of the amount of such payment . The
899899 amount of such claim shall not exceed amounts paid by the
900900 municipality for direct costs of municipal infrastructure
901901 improvements to provide water and sewer service to the
902902 establishment. Such claim shall not be approved by the Tax
903903 Commission unless the municipality and the establishment have
904904 entered into a written agreement for such claims to be filed by the
905905 municipality prior to submission of the application of the
906906 establishment pursuant to the provisions of this section. If such
907907 claim is approved, the amount of the payment to the establishment
908908 made pursuant to the provision s of Section 3606 of this title shall
909909 be reduced by the amount of the approved claim by the municipality
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960960
961961 and the Tax Commission shall issue a warrant to the municipality in
962962 the amount of the approved claim in the same manner as warrants are
963963 issued to qualifying establishments.
964964 L. For any contract executed by an establishment on or after
965965 August 2, 2018, five percent (5%) of the quarterly incentive payment
966966 amount shall be transferr ed by the Oklahoma Tax Commission to the
967967 Oklahoma Quick Action Closing Fund.
968968 SECTION 2. This act shall become effective November 1, 2025.
969969
970970 60-1-224 QD 1/8/2025 9:04:48 PM