Bill Text For SB0500 - Engrossed

 1|ENGROSSED SENATE                                                       |
  |BILL NO. 500                         By: Boren of the Senate           |
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  |                                         Lowe (Dick) of the House      |
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 7|       An Act relating to development incentives; amending             |
  |       62 O.S. 2011, Section 861, which relates to the Local           |
 8|       Development Act; requiring collaboration with certain           |
  |       Departments; requiring the Oklahoma Tax Commission to           |
 9|       publish annual report on tax increment                          |
  |       apportionments; specifying content of report; and               |
10|       providing an effective date.                                    |
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13|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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14|    SECTION 1.     AMENDATORY     62 O.S. 2011, Section 861, is        |
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15|amended to read as follows:                                            |
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16|    Section 861.  A.  A project plan may contain a provision that      |
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17|the increments from certain local taxes or fees may be used to         |
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18|finance project costs in areas qualified under the Local Development   |
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19|Act.  The increment from local taxes or fees levied from and after     |
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20|the effective date of the approval of such plan shall be apportioned   |
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21|in the following manner for a period not to exceed twenty-five (25)    |
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22|fiscal years thereafter or the period required for payment of          |
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23|project costs, whichever is less; provided, however, that for any      |
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24|increment district established after November 1, 1992, such time       |
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 1|period shall be tolled for a period of time equal to the pendency of   |
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 2|any litigation directly or indirectly challenging the increment        |
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 3|district or apportionment or disbursement:                             |
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 4|    1.  That portion of the ad valorem taxes which are produced by     |
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 5|the levy at the rate fixed each year by or for each such ad valorem    |
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 6|taxing entity upon the base assessed value of the increment district   |
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 7|determined pursuant to Section 862 of this title and as to an area     |
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 8|later added to the increment district, the effective date of the       |
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 9|addition to the increment district, shall be paid to each taxing       |
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10|entity and all or any portion of local sales taxes, other local        |
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11|taxes or local fees collected each year which are not subject to       |
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12|apportionment shall be paid or retained as otherwise provided by       |
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13|law; and                                                               |
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14|    2.  All or any portion of:                                         |
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15|         a.    ad valorem taxes, in excess of such amount specified    |
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16|              in paragraph 1 of this subsection,                       |
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17|         b.    the increment of local sales taxes, other local taxes   |
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18|              or local fees, or a combination thereof, paid to or      |
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19|              for the benefit of the city, town, or county approving   |
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20|              the plan, and                                            |
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21|         c.    with its consent, evidenced by agreement in writing,    |
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22|              the increment of local sales tax, other local taxes or   |
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23|              local fees, or combination thereof, payable to any       |
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24|              other local public taxing entity,                        |
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 1|shall be apportioned to, and when collected, shall be paid into an     |
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 2|apportionment fund established for the project pursuant to the         |
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 3|project plan.  Such revenues shall be used for the payment of the      |
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 4|project costs and for the payment of the principal of, the interest    |
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 5|on, and any premiums due in connection with the bonds of, loans,       |
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 6|notes, or advances of money to, or indebtedness incurred to finance    |
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 7|project costs, whether funded, refunded, assumed, or otherwise, for    |
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 8|financing, in whole or in part, eligible project costs.  For the       |
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 9|purposes of this section, "local sales tax" means amounts payable to   |
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10|or for the benefit of a local governmental entity calculated as a      |
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11|percentage of gross sales whether imposed by ordinance, resolution,    |
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12|covenant, or agreement.  Nothing shall prohibit the increments from    |
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13|being used to directly pay eligible project costs.  When all           |
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14|eligible project costs and such bonds, loans, advances of money or     |
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15|indebtedness, if any, including interest thereon and any premiums      |
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16|due in connection with them, have been paid and the governing body     |
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17|adopts an ordinance or resolution dissolving the tax apportionment     |
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18|financing, all ad valorem taxes upon the taxable property within the   |
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19|boundary of such district shall be paid into the funds of the          |
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20|respective taxing entities.                                            |
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21|    B.  If a project plan contains a provision for apportionment as    |
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22|provided in subsection A of this section, and notwithstanding any      |
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23|other provision of law to the contrary, the governing body shall       |
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24|direct in the resolution or ordinance approving the plan which         |
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 1|portion of the increments, including whether any or all, to be paid    |
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 2|into the apportionment fund shall constitute a part of the general     |
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 3|fund to be appropriated annually by the governing body, and which      |
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 4|portion, including whether any or all, shall constitute funds of a     |
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 5|public entity authorized to issue tax apportionment bonds or notes     |
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 6|or to incur project costs.                                             |
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 7|    C.  To the extent that collections exceed project costs and the    |
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 8|provisions for payment of principal and interest along with            |
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 9|sufficient reserves on any bonds issued pursuant to the provisions     |
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10|of Section 863 of this title, the excess shall be paid into the        |
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11|funds of the respective taxing entities unless the taxing entity       |
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12|agrees to some other use of such collections.                          |
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13|    D.  Except as provided in subsection E of this section, for any    |
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14|year in which taxes or fees are apportioned in the manner specified    |
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15|in paragraph 2 of subsection A of this section, any increase in        |
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16|assessed valuation of taxable real property or taxable personal        |
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17|property within the boundaries of such district in excess of the       |
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18|base assessed value shall not be considered by any taxing entity in    |
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19|computing any debt limitation or for any other purpose except for      |
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20|the levy of taxes and in determining the amount to be apportioned.     |
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21|    E.  In the event there is a change in the assessment ratio for     |
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22|ad valorem tax property valuations of property within the boundaries   |
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23|of an increment district, the portions of valuations for assessment    |
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 1|pursuant to paragraphs 1 and 2 of subsection A of this section shall   |
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 2|be proportionately adjusted in accordance with such reassessment.      |
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 3|    F.  Nothing in this section shall be construed as relieving        |
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 4|property in such project area from being assessed as provided in the   |
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 5|Ad Valorem Tax Code of the Oklahoma Statutes, or as relieving owners   |
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 6|of such property from paying a uniform rate of taxes, as required by   |
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 7|Section 5 of Article X of the Oklahoma Constitution.                   |
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 8|    G.  Subject to constitutional exemptions, if property in an        |
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 9|increment district is owned by a public entity and is leased to or     |
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10|operated for a private use, including, without limitation, use by a    |
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11|not-for-profit corporation or trust, the portion of the property so    |
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12|leased or operated shall be assessed by the county assessor as if      |
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13|such portion of the property were taxable, and, during the term of     |
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14|the increment district, the public entity owning such property shall   |
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15|pay or require the user thereof to pay ad valorem taxes or an in       |
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16|lieu ad valorem tax payment in an amount not less than the amount      |
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17|that would have resulted if taxes had otherwise been levied on such    |
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18|portion of the property.  If property subject to ad valorem tax in     |
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19|an increment district is acquired by a private not-for-profit          |
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20|corporation or public or private trust, it shall continue to be        |
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21|assessed and subject to ad valorem taxes or an in lieu ad valorem      |
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22|payment by the user thereof until termination of the increment         |
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23|district unless and only to the extent of the portion of the           |
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24|property and the use thereof that is:                                  |
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 1|    1.  Acquired to implement the project plan;                        |
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 2|    2.  Converted to a new tax-exempt use by a tax-exempt user; or     |
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 3|    3.  Entitled to claim a constitutional exemption notwithstanding   |
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 4|statutory provisions.                                                  |
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 5|During the period of an increment district, such nonexempt uses and    |
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 6|interests are severable for purposes of ad valorem and in lieu of ad   |
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 7|valorem assessment and payments, notwithstanding any statutory         |
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 8|provisions to the contrary.                                            |
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 9|    H.  The Oklahoma Tax Commission shall, in collaboration with the   |
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10|State Department of Education, State Board of Career and Technology    |
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11|Education and the Oklahoma Department of Commerce, create and          |
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12|publish a report by March 31 of each year documenting the amount of    |
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13|increments of local taxes and fees apportioned pursuant to the         |
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14|provisions of this section in the previous calendar year.  The         |
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15|report shall include an estimate of the economic impact and an         |
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16|estimate of the amount funds benefiting public schools were            |
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17|decreased as a result of the apportionments provided pursuant to the   |
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18|provisions of this section.                                            |
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19|    SECTION 2.  This act shall become effective November 1, 2021.      |
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20|    Passed the Senate the 8th day of March, 2021.                      |
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  |                                    Presiding Officer of the Senate    |
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 1|    Passed the House of Representatives the ____ day of __________,    |
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 2|2021.                                                                  |
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  |                                     Presiding Officer of the House    |
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