Bill Text For SB0609 - Engrossed

 1|ENGROSSED SENATE                                                       |
  |BILL NO. 609                         By: Coleman and Hall of the       |
 2|                                                              Senate   |
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 3|                                         and                           |
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 4|                                         Hilbert of the House          |
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 5|                                                                       |
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 6|       An Act relating to ad valorem tax; amending 68 O.S.             |
  |       2011, Section 2902, as last amended by Section 1,               |
 7|       Chapter 258, O.S.L. 2019 (68 O.S. Supp. 2020, Section           |
  |       2902), which relates to exemption for manufacturing             |
 8|       facilities; modifying definitions; adjusting certain            |
  |       investment requirement to inflation index; requiring            |
 9|       the Oklahoma Tax Commission to publish certain                  |
  |       adjustments; adjusting wage threshold; requiring                |
10|       wages exceed certain Quality Jobs Program Act                   |
  |       requirements; authorizing the Oklahoma Tax Commission           |
11|       to request verification; removing exceptions for                |
  |       failure to meet certain payroll requirements;                   |
12|       modifying certain classification; and providing an              |
  |       effective date.                                                 |
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14|                                                                       |
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15|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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16|    SECTION 1.     AMENDATORY     68 O.S. 2011, Section 2902, as       |
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17|last amended by Section 1, Chapter 258, O.S.L. 2019 (68 O.S. Supp.     |
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18|2020, Section 2902), is amended to read as follows:                    |
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19|    Section 2902.  A.  Except as otherwise provided by subsection H    |
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20|of Section 3658 of this title pursuant to which the exemption          |
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21|authorized by this section may not be claimed, a qualifying            |
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22|manufacturing concern, as defined by Section 6B of Article X of the    |
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23|Oklahoma Constitution, and as further defined herein, shall be         |
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24|exempt from the levy of any ad valorem taxes upon new, expanded or     |
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                                                                   Page 1
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 1|acquired manufacturing facilities, including facilities engaged in     |
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 2|research and development, for a period of five (5) years.  The         |
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 3|provisions of Section 6B of Article X of the Oklahoma Constitution     |
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 4|requiring an existing facility to have been unoccupied for a period    |
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 5|of twelve (12) months prior to acquisition shall be construed as a     |
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 6|qualification for a facility to initially receive an exemption, and    |
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 7|shall not be deemed to be a qualification for that facility to         |
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 8|continue to receive an exemption in each of the four (4) years         |
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 9|following the initial year for which the exemption was granted.        |
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10|Such facilities are hereby classified for the purposes of taxation     |
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11|as provided in Section 22 of Article X of the Oklahoma Constitution.   |
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12|    B.  For purposes of this section, the following definitions        |
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13|shall apply:                                                           |
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14|    1.  "Manufacturing facilities" means facilities engaged in the     |
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15|mechanical or chemical transformation of materials or substances       |
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16|into new products and except as provided by paragraph 8 6 of           |
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17|subsection C of this section shall include:                            |
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18|         a.   establishments which have received a manufacturer        |
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19|              exemption permit pursuant to the provisions of Section   |
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20|              1359.2 of this title,                                    |
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21|         b.   facilities, including repair and replacement parts,      |
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22|              primarily engaged in aircraft repair, building and       |
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23|              rebuilding whether or not on a factory basis,            |
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 1|         c.   establishments primarily engaged in computer services    |
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 2|              and data processing as defined under Industrial Group    |
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 3|              Numbers 5112 and 5415, and U.S. Industry Number 334611   |
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 4|              and 519130 of the NAICS Manual, latest revision, and     |
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 5|              which derive at least fifty percent (50%) of their       |
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 6|              annual gross revenues from the sale of a product or      |
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 7|              service to an out-of-state buyer or consumer, and as     |
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 8|              defined under Industrial Group Number 5142 of the        |
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 9|              NAICS Manual, latest revision, which derive at least     |
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10|              eighty percent (80%) of their annual gross revenues      |
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11|              from the sale of a product or service to an              |
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12|              out-of-state buyer or consumer.  Eligibility as a        |
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13|              manufacturing facility pursuant to this subparagraph     |
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14|              shall be established, subject to review by the           |
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15|              Oklahoma Tax Commission, by annually filing an           |
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16|              affidavit with the Tax Commission stating that the       |
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17|              facility so qualifies and such other information as      |
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18|              required by the Tax Commission.  For purposes of         |
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19|              determining whether annual gross revenues are derived    |
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20|              from sales to out-of-state buyers, all sales to the      |
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21|              federal government shall be considered to be an          |
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22|              out-of-state buyer,                                      |
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23|         d.   for which facilities that the investment cost of the     |
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24|              construction, acquisition or expansion of the            |
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                                                                   Page 3
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 1|              manufacturing facility is Two Hundred Fifty Thousand     |
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 2|              Dollars ($250,000.00) Five Hundred Thousand Dollars      |
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 3|              ($500,000.00) or more with respect to assets placed      |
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 4|              into service during calendar year 2022.  For             |
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 5|              subsequent calendar years, the investment required       |
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 6|              shall be increased annually by a percentage equal to     |
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 7|              the previous year's increase in the Consumer Price       |
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 8|              Index-All Urban Consumers ("CPI-U") and such adjusted    |
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 9|              amount shall be the required investment cost in order    |
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10|              to qualify for the exemption authorized by this          |
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11|              section.  The Oklahoma Department of Commerce shall      |
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12|              determine the amount of the increase, if any, on         |
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13|              January 1 of each year.  The Oklahoma Tax Commission     |
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14|              shall publish on its website at least annually the       |
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15|              adjusted dollar amount in order to qualify for the       |
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16|              exemption authorized by this section and shall include   |
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17|              the adjusted dollar amount in any of its relevant        |
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18|              forms or publications with respect to the exemption.     |
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19|              Provided, "investment cost" shall not include the cost   |
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20|              of direct replacement, refurbishment, repair or          |
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21|              maintenance of existing machinery or equipment, except   |
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22|              that "investment cost" shall include capital             |
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23|              expenditures for direct replacement, refurbishment,      |
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24|              repair or maintenance of existing machinery or           |
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 1|              equipment that qualifies for depreciation and/or         |
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 2|              amortization pursuant to the Internal Revenue Code of    |
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 3|              1986, as amended, and such expenditures shall be         |
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 4|              eligible as a part of an "expansion" that otherwise      |
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 5|              qualifies under this section, and                        |
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 6|         e.   establishments primarily engaged in distribution as      |
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 7|              defined under Industry Numbers 49311, 49312, 49313 and   |
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 8|              49319 and Industry Sector Number 42 of the NAICS         |
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 9|              Manual, latest revision, and which meet the following    |
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10|              qualifications:                                          |
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11|              (1)  construction with an initial capital investment     |
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12|                   of at least Five Million Dollars ($5,000,000.00),   |
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13|              (2)  employment of at least one hundred (100)            |
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14|                   full-time-equivalent employees, as certified by     |
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15|                   the Oklahoma Employment Security Commission,        |
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16|              (3)  payment of wages or salaries to its employees at    |
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17|                   a wage which equals or exceeds one hundred          |
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18|                   seventy-five percent (175%) of the federally        |
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19|                   mandated minimum wage, as certified by the          |
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20|                   Oklahoma Employment Security Commission the         |
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21|                   average wage requirements in the Oklahoma Quality   |
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22|                   Jobs Program Act for the year in which the real     |
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23|                   property was placed into service, and               |
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24|                                                                       |
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 1|              (4)  commencement of construction on or after November   |
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 2|                   1, 2007, with construction to be completed within   |
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 3|                   three (3) years from the date of the commencement   |
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 4|                   of construction,                                    |
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 5|         f.   facilities engaged in the manufacturing, compounding,    |
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 6|              processing or fabrication of materials into articles     |
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 7|              of tangible personal property according to the special   |
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 8|              order of a customer (custom order manufacturing) by      |
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 9|              manufacturers classified as operating in North           |
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10|              American Industry Classification System (NAICS)          |
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11|              Sectors 32 and 33, but does not include such custom      |
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12|              order manufacturing by manufacturers classified in       |
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13|              other NAICS code sectors, and                            |
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14|         g.   with respect to any entity making an application for     |
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15|              the exemption authorized by this section on or after     |
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16|              January 1, 2022, the establishment making application    |
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17|              for exempt treatment of real or personal property        |
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18|              acquired or improved beginning January 1, 2022, and      |
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19|              for any calendar year thereafter, the entity shall be    |
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20|              required to pay new direct jobs, as defined by Section   |
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21|              3603 of this title for purposes of the Oklahoma          |
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22|              Quality Jobs Program Act, an average annualized wage     |
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23|              which equals or exceeds the average wage requirement     |
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24|              in the Oklahoma Quality Jobs Program Act for the year    |
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 1|              in which the real or personal property was placed into   |
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 2|              service.  The Oklahoma Tax Commission may request        |
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 3|              verification from the Oklahoma Department of Commerce    |
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 4|              that an establishment seeking an exemption for real or   |
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 5|              personal property pays an average annualized wage that   |
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 6|              equals or exceeds the average wage requirement in        |
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 7|              effect for the year in which the real or personal        |
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 8|              property was placed into service.                        |
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 9|    Eligibility as a manufacturing facility pursuant to this           |
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10|subparagraph shall be established, subject to review by the Tax        |
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11|Commission, by annually filing an affidavit with the Tax Commission    |
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12|stating that the facility so qualifies and containing such other       |
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13|information as required by the Tax Commission.                         |
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14|    Provided, eating and drinking places, as well as other retail      |
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15|establishments, shall not qualify as manufacturing facilities for      |
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16|purposes of this section, nor shall centrally assessed properties.     |
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17|    Eligibility as a manufacturing facility pursuant to this           |
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18|subparagraph shall be established, subject to review by the Tax        |
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19|Commission, by annually filing an application with the Tax             |
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20|Commission stating that the facility so qualifies and containing       |
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21|such other information as required by the Tax Commission;              |
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22|    2.  "Facility" and "facilities", except as otherwise provided by   |
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23|this paragraph, means and includes the land, buildings, structures,    |
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24|and improvements used directly and exclusively in the manufacturing    |
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 1|process.  Effective January 1, 2022, and for each calendar year        |
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 2|thereafter, for establishments which have received a manufacturer      |
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 3|exemption permit pursuant to the provisions of Section 1359.2 of       |
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 4|this title, or facilities engaged in manufacturing activities          |
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 5|defined or classified in the NAICS Manual under Industry Nos. 311111   |
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 6|through 339999, inclusive, but for no other establishments, facility   |
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 7|and facilities means and includes the land, buildings, structures,     |
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 8|improvements, machinery, fixtures, equipment and other personal        |
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 9|property used directly and exclusively in the manufacturing process;   |
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10|and                                                                    |
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11|    3.  "Research and development" means activities directly related   |
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12|to and conducted for the purpose of discovering, enhancing,            |
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13|increasing or improving future or existing products or processes or    |
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14|productivity.                                                          |
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15|    C.  The following provisions shall apply:                          |
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16|    1.  A manufacturing concern shall be entitled to the exemption     |
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17|herein provided for each new manufacturing facility constructed,       |
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18|each existing manufacturing facility acquired and the expansion of     |
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19|existing manufacturing facilities on the same site, as such terms      |
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20|are defined by Section 6B of Article X of the Oklahoma Constitution    |
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21|and by this section;                                                   |
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22|    2.  Except as otherwise provided in paragraph 5 of this            |
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23|subsection, no No manufacturing concern shall receive more than one    |
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24|five-year exemption for any one manufacturing facility unless the      |
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 1|expansion which qualifies the manufacturing facility for an            |
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 2|additional five-year exemption meets the requirements of paragraph 4   |
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 3|of this subsection and the employment level established for any        |
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 4|previous exemption is maintained;                                      |
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 5|    3.  Any exemption as to the expansion of an existing               |
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 6|manufacturing facility shall be limited to the increase in ad          |
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 7|valorem taxes directly attributable to the expansion;                  |
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 8|    4.  Except as provided in paragraphs 5 and 6 of this subsection,   |
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 9|all All initial applications for any exemption for a new, acquired     |
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10|or expanded manufacturing facility shall be granted only if:           |
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11|         a.   there is a net increase in annualized base payroll       |
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12|              over the initial payroll of at least Two Hundred Fifty   |
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13|              Thousand Dollars ($250,000.00) if the facility is        |
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14|              located in a county with a population of fewer than      |
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15|              seventy-five thousand (75,000), according to the most    |
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16|              recent Federal Decennial Census, while maintaining or    |
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17|              increasing base payroll in subsequent years, or at       |
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18|              least One Million Dollars ($1,000,000.00) if the         |
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19|              facility is located in a county with a population of     |
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20|              seventy-five thousand (75,000) or more, according to     |
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21|              the most recent Federal Decennial Census, while          |
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22|              maintaining or increasing base payroll in subsequent     |
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23|              years; provided the payroll requirement of this          |
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24|              subparagraph shall be waived for claims for              |
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 1|              exemptions, including claims previously denied or on     |
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 2|              appeal on March 3, 2010, for all initial applications    |
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 3|              for exemption filed on or after January 1, 2004, and     |
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 4|              on or before March 31, 2009, and all subsequent annual   |
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 5|              exemption applications filed related to the initial      |
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 6|              application for exemption, for an applicant, if the      |
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 7|              facility has been located in Oklahoma for at least       |
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 8|              fifteen (15) years engaged in marine engine              |
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 9|              manufacturing as defined under U.S. Industry Number      |
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10|              333618 of the NAICS Manual, latest revision, and has     |
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11|              maintained an average employment of five hundred (500)   |
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12|              or more full-time-equivalent employees over a ten-year   |
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13|              period.  Any applicant that qualifies for the payroll    |
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14|              requirement waiver as outlined in the previous           |
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15|              sentence and subsequently closes its Oklahoma            |
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16|              manufacturing plant prior to January 1, 2012, may be     |
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17|              disqualified for exemption and subject to recapture.     |
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18|              For an applicant engaged in paperboard manufacturing     |
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19|              as defined under U.S. Industry Number 322130 of the      |
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20|              NAICS Manual, latest revision, union master payouts      |
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21|              paid by the buyer of the facility to specified           |
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22|              individuals employed by the facility at the time of      |
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23|              purchase, as specified under the purchase agreement,     |
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24|                                                                       |
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 1|              shall be excluded from payroll for purposes of this      |
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 2|              section.                                                 |
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 3|              In order to provide certainty with respect to            |
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 4|              investments in manufacturing facilities pertaining to    |
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 5|              all initial applications for exemption filed on or       |
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 6|              after January 1, 2016, the following definitions shall   |
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 7|              apply:                                                   |
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 8|              (1)   "base payroll" shall mean total payroll adjusted   |
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 9|                   for any nonrecurring bonuses, exercise of stock     |
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10|                   option or stock rights and other nonrecurring,      |
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11|                   extraordinary items included in total payroll,      |
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12|                   and                                                 |
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13|              (2)   "initial payroll" shall mean base payroll for      |
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14|                   the year immediately preceding the initial          |
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15|                   construction, acquisition or expansion.             |
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16|              The Tax Commission shall verify payroll information      |
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17|              through the Oklahoma Employment Security Commission by   |
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18|              using reports from the Oklahoma Employment Security      |
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19|              Commission for the calendar year immediately preceding   |
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20|              the year for which initial application is made for       |
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21|              base-line payroll, which must be maintained or           |
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22|              increased for each subsequent year; provided, a          |
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23|              manufacturing facility shall have the option of          |
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24|                                                                       |
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 1|              excluding from its payroll, for purposes of this         |
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 2|              section:                                                 |
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 3|                        i.    payments to sole proprietors, members    |
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 4|                             of a partnership, members of a limited    |
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 5|                             liability company who own at least ten    |
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 6|                             percent (10%) of the capital of the       |
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 7|                             limited liability company or              |
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 8|                             stockholder-employees of a corporation    |
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 9|                             who own at least ten percent (10%) of     |
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10|                             the stock in the corporation, and         |
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11|                       ii.    any nonrecurring bonuses, exercise of    |
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12|                             stock option or stock rights or other     |
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13|                             nonrecurring, extraordinary items         |
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14|                             included in total payroll numbers as      |
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15|                             reported by the Oklahoma Employment       |
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16|                             Security Commission.  A manufacturing     |
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17|                             facility electing either option shall     |
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18|                             indicate such election upon its           |
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19|                             application for an exemption under this   |
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20|                             section.  Any manufacturing facility      |
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21|                             electing either option shall submit       |
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22|                             such information as the Tax Commission    |
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23|                             may require in order to verify payroll    |
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24|                             information.  Payroll information         |
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                                                                   Page 12
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 1|                             submitted pursuant to the provisions of   |
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 2|                             this paragraph shall be submitted to      |
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 3|                             the Tax Commission and shall be subject   |
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 4|                             to the provisions of Section 205 of       |
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 5|                             this title, and                           |
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 6|         b.   the facility offers, or will offer within one hundred    |
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 7|              eighty (180) days of the date of employment, a basic     |
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 8|              health benefits plan to the full-time-equivalent         |
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 9|              employees of the facility, which is determined by the    |
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10|              Department of Commerce to consist of the elements        |
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11|              specified in subparagraph b of paragraph 1 of            |
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12|              subsection A of Section 3603 of this title or elements   |
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13|              substantially equivalent thereto.                        |
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14|    For purposes of this section, calculation of the amount of         |
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15|increased base payroll shall be measured from the start of initial     |
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16|construction or expansion to the completion of such construction or    |
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17|expansion or for three (3) years from the start of initial             |
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18|construction or expansion, whichever occurs first.  The amount of      |
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19|increased base payroll shall include payroll for                       |
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20|full-time-equivalent employees in this state who are employed by an    |
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21|entity other than the facility which has previously or is currently    |
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22|qualified to receive an exemption pursuant to the provisions of this   |
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23|section and who are leased or otherwise provided to the facility, if   |
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24|such employment did not exist in this state prior to the start of      |
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                                                                   Page 13
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 1|initial construction or expansion of the facility.  The                |
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 2|manufacturing concern shall submit an affidavit to the Tax             |
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 3|Commission, signed by an officer, stating that the construction,       |
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 4|acquisition or expansion of the facility will result in a net          |
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 5|increase in the annualized base payroll as required by this            |
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 6|paragraph and that full-time-equivalent employees of the facility      |
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 7|are or will be offered a basic health benefits plan as required by     |
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 8|this paragraph.  If, after the completion of such construction or      |
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 9|expansion or after three (3) years from the start of initial           |
  |                                                                       |
10|construction or expansion, whichever occurs first, the construction,   |
  |                                                                       |
11|acquisition or expansion has not resulted in a net increase in the     |
  |                                                                       |
12|amount of annualized base payroll, if required, or any other           |
  |                                                                       |
13|qualification specified in this paragraph has not been met, the        |
  |                                                                       |
14|manufacturing concern shall pay an amount equal to the amount of any   |
  |                                                                       |
15|exemption granted, including penalties and interest thereon, to the    |
  |                                                                       |
16|Tax Commission for deposit to the Ad Valorem Reimbursement Fund;       |
  |                                                                       |
17|    5.  If a facility fails to meet the base payroll requirement of    |
  |                                                                       |
18|subparagraph a of paragraph 4 of this subsection, the payroll          |
  |                                                                       |
19|requirement shall be waived for claims for exemptions, including       |
  |                                                                       |
20|claims previously denied or on appeal on June 1, 2009, for all         |
  |                                                                       |
21|initial applications for exemption filed on or after January 1,        |
  |                                                                       |
22|2004, and on or before March 31, 2009, and all subsequent annual       |
  |                                                                       |
23|exemption applications filed related to such initial application for   |
  |                                                                       |
24|exemption, for an applicant, if the facility:                          |
  |                                                                       |
                                                                   Page 14
___________________________________________________________________________

 1|         a.   has been located for at least five (5) years as of       |
  |                                                                       |
 2|              March 31, 2009, in a county in Oklahoma with a           |
  |                                                                       |
 3|              population of six hundred thousand (600,000) or more,    |
  |                                                                       |
 4|         b.   is owned by an applicant that has been engaged in        |
  |                                                                       |
 5|              manufacturing as defined under U.S. Industry Numbers     |
  |                                                                       |
 6|              323110, 323111, 323121 and 323122 of the NAICS Manual,   |
  |                                                                       |
 7|              latest revision,                                         |
  |                                                                       |
 8|         c.   is owned by an applicant that maintains a workforce of   |
  |                                                                       |
 9|              at least three hundred (300) employees on June 1,        |
  |                                                                       |
10|              2009,                                                    |
  |                                                                       |
11|         d.   is owned by an applicant that has filed multiple         |
  |                                                                       |
12|              applications for exemption pursuant to this section,     |
  |                                                                       |
13|              and                                                      |
  |                                                                       |
14|         e.   is owned by an applicant that operates at least one      |
  |                                                                       |
15|              facility in this state of at least seven hundred         |
  |                                                                       |
16|              thirty thousand (730,000) square feet on June 1, 2009.   |
  |                                                                       |
17|In the event that any applicant obtaining a waiver of the payroll      |
  |                                                                       |
18|requirement pursuant to this paragraph ceases to operate all of its    |
  |                                                                       |
19|facilities in this state on or before a date that is four (4) years    |
  |                                                                       |
20|after any initial application for an exemption is filed by such        |
  |                                                                       |
21|applicant, all sums of property taxes exempted under this paragraph    |
  |                                                                       |
22|through a waiver of the payroll requirement that relate to such        |
  |                                                                       |
23|application shall become due and payable as if such sums were          |
  |                                                                       |
24|                                                                       |
  |                                                                       |
                                                                   Page 15
___________________________________________________________________________

 1|assessed in the year in which the applicant ceases to operate all of   |
  |                                                                       |
 2|its facilities in the state;                                           |
  |                                                                       |
 3|    6.  Any new, acquired or expanded automotive final assembly        |
  |                                                                       |
 4|manufacturing facility which does not meet the requirements of         |
  |                                                                       |
 5|paragraph 4 of this subsection shall be granted an exemption only if   |
  |                                                                       |
 6|all other requirements of this section are met and only if the         |
  |                                                                       |
 7|investment cost of the construction, acquisition or expansion of the   |
  |                                                                       |
 8|manufacturing facility is Three Hundred Million Dollars                |
  |                                                                       |
 9|($300,000,000.00) or more and the manufacturing facility retains an    |
  |                                                                       |
10|average employment of one thousand seven hundred fifty (1,750) or      |
  |                                                                       |
11|more full-time-equivalent employees in the year in which the           |
  |                                                                       |
12|exemption is initially granted and in each of the four (4)             |
  |                                                                       |
13|subsequent years only if an average employment of one thousand seven   |
  |                                                                       |
14|hundred fifty (1,750) or more full-time-equivalent employees is        |
  |                                                                       |
15|maintained in the subsequent year.  Any property installed to          |
  |                                                                       |
16|replace property damaged by the tornado or natural disaster that       |
  |                                                                       |
17|occurred May 8, 2003, may continue to receive the exemption provided   |
  |                                                                       |
18|in this paragraph for the full five-year period based on the value     |
  |                                                                       |
19|of the previously qualifying assets as of January 1, 2003.  The        |
  |                                                                       |
20|exemption shall continue in effect as long as all other                |
  |                                                                       |
21|qualifications in this paragraph are met.  If the average employment   |
  |                                                                       |
22|of one thousand seven hundred fifty (1,750) or more                    |
  |                                                                       |
23|full-time-equivalent employees is reduced as a result of temporary     |
  |                                                                       |
24|layoffs because of a tornado or natural disaster on May 8, 2003,       |
  |                                                                       |
                                                                   Page 16
___________________________________________________________________________

 1|then the average employment requirement shall be waived for year       |
  |                                                                       |
 2|2003 of the exemption period.  Calculation of the number of            |
  |                                                                       |
 3|employees shall be made in the same manner as required under Section   |
  |                                                                       |
 4|2357.4 of this title for an investment tax credit.  As used in this    |
  |                                                                       |
 5|paragraph, "expand" and "expansion" shall mean and include any         |
  |                                                                       |
 6|increase to the size or scope of a facility as well as any             |
  |                                                                       |
 7|renovation, restoration, replacement or remodeling of a facility       |
  |                                                                       |
 8|which permits the manufacturing of a new or redesigned product;        |
  |                                                                       |
 9|    7.  Any new, acquired, or expanded computer data processing,       |
  |                                                                       |
10|data preparation, or information processing services provider          |
  |                                                                       |
11|classified in Industrial Group Number 7374 of the SIC Manual, latest   |
  |                                                                       |
12|revision, and U.S. Industry Number 514210 518210 of the North          |
  |                                                                       |
13|American Industrial Classification System (NAICS) Manual, latest       |
  |                                                                       |
14|2017 revision, may apply for exemptions under this section for each    |
  |                                                                       |
15|year in which new, acquired, or expanded capital improvements to the   |
  |                                                                       |
16|facility are made if:                                                  |
  |                                                                       |
17|         a.   there is a net increase in annualized payroll of the     |
  |                                                                       |
18|              applicant at any facility or facilities of the           |
  |                                                                       |
19|              applicant in this state of at least Two Hundred Fifty    |
  |                                                                       |
20|              Thousand Dollars ($250,000.00), which is attributable    |
  |                                                                       |
21|              to the capital improvements, or a net increase of        |
  |                                                                       |
22|              Seven Million Dollars ($7,000,000.00) or more in         |
  |                                                                       |
23|              capital improvements, while maintaining or increasing    |
  |                                                                       |
24|                                                                       |
  |                                                                       |
                                                                   Page 17
___________________________________________________________________________

 1|              payroll at the facility or facilities in this state      |
  |                                                                       |
 2|              which are included in the application, and               |
  |                                                                       |
 3|         b.   the facility offers, or will offer within one hundred    |
  |                                                                       |
 4|              eighty (180) days of the date of employment of new       |
  |                                                                       |
 5|              employees attributable to the capital improvements, a    |
  |                                                                       |
 6|              basic health benefits plan to the full-time-equivalent   |
  |                                                                       |
 7|              employees of the facility, which is determined by the    |
  |                                                                       |
 8|              Department of Commerce to consist of the elements        |
  |                                                                       |
 9|              specified in subparagraph b of paragraph 1 of            |
  |                                                                       |
10|              subsection A of Section 3603 of this title or elements   |
  |                                                                       |
11|              substantially equivalent thereto;                        |
  |                                                                       |
12|    8. 6.  Effective January 1, 2017, an entity engaged in electric    |
  |                                                                       |
13|power generation by means of wind, as described by the North           |
  |                                                                       |
14|American Industry Classification System, No. 221119, shall not be      |
  |                                                                       |
15|defined as a qualifying manufacturing concern for purposes of the      |
  |                                                                       |
16|exemption otherwise authorized pursuant to Section 6B of Article X     |
  |                                                                       |
17|of the Oklahoma Constitution or qualify as a "manufacturing            |
  |                                                                       |
18|facility" as defined in this section.  No initial application for      |
  |                                                                       |
19|exemption shall be filed by or accepted from an entity engaged in      |
  |                                                                       |
20|electric power generation by means of wind on or after January 1,      |
  |                                                                       |
21|2018; and                                                              |
  |                                                                       |
22|    9. 7.  An entity or applicant engaged in an industry as defined    |
  |                                                                       |
23|under U.S. Industry Number 324110 of the NAICS Manual, latest          |
  |                                                                       |
24|revision, which has applied for or been granted an exemption for a     |
  |                                                                       |
                                                                   Page 18
___________________________________________________________________________

 1|time period which began on or after calendar year 2012 and before      |
  |                                                                       |
 2|calendar year 2016 but which did not meet the payroll requirements     |
  |                                                                       |
 3|of subparagraph a of paragraph 4 of this subsection because of         |
  |                                                                       |
 4|nonrecurring bonuses, exercise of stock option or stock rights or      |
  |                                                                       |
 5|other nonrecurring, extraordinary items included in total payroll in   |
  |                                                                       |
 6|the previous year, shall be allowed an exemption, beginning with       |
  |                                                                       |
 7|calendar year 2016, for the number of years, including the calendar    |
  |                                                                       |
 8|year for which the exemption was denied, remaining in the entity's     |
  |                                                                       |
 9|five-year exemption period, provided such entity attains or            |
  |                                                                       |
10|increases payroll at or above the initial or base payroll              |
  |                                                                       |
11|established for the exemption.                                         |
  |                                                                       |
12|    D.  1.  Except as provided in paragraph 2 of this subsection,      |
  |                                                                       |
13|the five-year period of exemption from ad valorem taxes for any        |
  |                                                                       |
14|qualifying manufacturing facility property shall begin on January 1    |
  |                                                                       |
15|following the initial qualifying use of the property in the            |
  |                                                                       |
16|manufacturing process.                                                 |
  |                                                                       |
17|    2.  The five-year period of exemption from ad valorem taxes for    |
  |                                                                       |
18|any qualifying manufacturing facility, as specified in subparagraphs   |
  |                                                                       |
19|a and b of this paragraph, which is located within a tax incentive     |
  |                                                                       |
20|district created pursuant to the Local Development Act by a county     |
  |                                                                       |
21|having a population of at least five hundred thousand (500,000),       |
  |                                                                       |
22|according to the most recent Federal Decennial Census, shall begin     |
  |                                                                       |
23|on January 1 following the expiration or termination of the ad         |
  |                                                                       |
24|valorem exemption, abatement, or other incentive provided through      |
  |                                                                       |
                                                                   Page 19
___________________________________________________________________________

 1|the tax incentive district.  Facilities qualifying pursuant to this    |
  |                                                                       |
 2|subsection shall include:                                              |
  |                                                                       |
 3|         a.    a manufacturing facility as defined in subparagraph c   |
  |                                                                       |
 4|              of paragraph 1 of subsection B of this section, and      |
  |                                                                       |
 5|         b.    an establishment primarily engaged in distribution as   |
  |                                                                       |
 6|              defined under Industry Number 49311 of the North         |
  |                                                                       |
 7|              American Industry Classification System for which the    |
  |                                                                       |
 8|              initial capital investment was at least One Hundred      |
  |                                                                       |
 9|              Eighty Million Dollars ($180,000,000.00); provided,      |
  |                                                                       |
10|              that the qualifying job creation and depreciable         |
  |                                                                       |
11|              property investment occurred prior to calendar year      |
  |                                                                       |
12|              2017 but not earlier than calendar year 2013.            |
  |                                                                       |
13|    E.  Any person, firm or corporation claiming the exemption         |
  |                                                                       |
14|herein provided for shall file each year for which exemption is        |
  |                                                                       |
15|claimed, an application therefor with the county assessor of the       |
  |                                                                       |
16|county in which the new, expanded or acquired facility is located.     |
  |                                                                       |
17|The application shall be on a form or forms prescribed by the Tax      |
  |                                                                       |
18|Commission, and shall be filed on or before March 15, except as        |
  |                                                                       |
19|provided in Section 2902.1 of this title, of each year in which the    |
  |                                                                       |
20|facility desires to take the exemption or within thirty (30) days      |
  |                                                                       |
21|from and after receipt by such person, firm or corporation of notice   |
  |                                                                       |
22|of valuation increase, whichever is later.  In a case where            |
  |                                                                       |
23|completion of the facility or facilities will occur after January 1    |
  |                                                                       |
24|of a given year, a facility may apply to claim the ad valorem tax      |
  |                                                                       |
                                                                   Page 20
___________________________________________________________________________

 1|exemption for that year.  If such facility is found to be qualified    |
  |                                                                       |
 2|for exemption, the ad valorem tax exemption provided for herein        |
  |                                                                       |
 3|shall be granted for that entire year and shall apply to the ad        |
  |                                                                       |
 4|valorem valuation as of January 1 of that given year.  For             |
  |                                                                       |
 5|applicants which qualify under the provisions of subparagraph b of     |
  |                                                                       |
 6|paragraph 1 of subsection B of this section, the application shall     |
  |                                                                       |
 7|include a copy of the affidavit and any other information required     |
  |                                                                       |
 8|to be filed with the Tax Commission.                                   |
  |                                                                       |
 9|    F.  The application shall be examined by the county assessor and   |
  |                                                                       |
10|approved or rejected in the same manner as provided by law for         |
  |                                                                       |
11|approval or rejection of claims for homestead exemptions.  The         |
  |                                                                       |
12|taxpayer shall have the same right of review by and appeal from the    |
  |                                                                       |
13|county board of equalization, in the same manner and subject to the    |
  |                                                                       |
14|same requirements as provided by law for review and appeals            |
  |                                                                       |
15|concerning homestead exemption claims.  Approved applications shall    |
  |                                                                       |
16|be filed by the county assessor with the Tax Commission no later       |
  |                                                                       |
17|than June 15, except as provided in Section 2902.1 of this title, of   |
  |                                                                       |
18|the year in which the facility desires to take the exemption.          |
  |                                                                       |
19|Incomplete applications and applications filed after June 15 will be   |
  |                                                                       |
20|declared null and void by the Tax Commission.  In the event that a     |
  |                                                                       |
21|taxpayer qualified to receive an exemption pursuant to the             |
  |                                                                       |
22|provisions of this section shall make payment of ad valorem taxes in   |
  |                                                                       |
23|excess of the amount due, the county treasurer shall have the          |
  |                                                                       |
24|authority to credit the taxpayer's real or personal property tax       |
  |                                                                       |
                                                                   Page 21
___________________________________________________________________________

 1|overpayment against current taxes due.  The county treasurer may       |
  |                                                                       |
 2|establish a schedule of up to five (5) years of credit to resolve      |
  |                                                                       |
 3|the overpayment.                                                       |
  |                                                                       |
 4|    G.  Nothing herein shall in any manner affect, alter or impair     |
  |                                                                       |
 5|any law relating to the assessment of property, and all property,      |
  |                                                                       |
 6|real or personal, which may be entitled to exemption hereunder shall   |
  |                                                                       |
 7|be valued and assessed as is other like property and as provided by    |
  |                                                                       |
 8|law.  The valuation and assessment of property for which an            |
  |                                                                       |
 9|exemption is granted hereunder shall be performed by the Tax           |
  |                                                                       |
10|Commission.                                                            |
  |                                                                       |
11|    H.  The Tax Commission shall have the authority and duty to        |
  |                                                                       |
12|prescribe forms and to promulgate rules as may be necessary to carry   |
  |                                                                       |
13|out and administer the terms and provisions of this section.           |
  |                                                                       |
14|    SECTION 2.  This act shall become effective November 1, 2021.      |
  |                                                                       |
15|    Passed the Senate the 2nd day of March, 2021.                      |
  |                                                                       |
16|                                                                       |
  |                                                                       |
17|                                                                       |
  |                                    Presiding Officer of the Senate    |
18|                                                                       |
  |                                                                       |
19|    Passed the House of Representatives the ____ day of __________,    |
  |                                                                       |
20|2021.                                                                  |
  |                                                                       |
21|                                                                       |
  |                                                                       |
22|                                                                       |
  |                                     Presiding Officer of the House    |
23|                                                 of Representatives    |
  |                                                                       |
24|                                                                       |
  |                                                                       |
                                                                   Page 22
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