Bill Text For SB0609 - Committee Substitute

 1|                          STATE OF OKLAHOMA                            |
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 2|             1st Session of the 58th Legislature (2021)                |
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 3|COMMITTEE SUBSTITUTE                                                   |
  |FOR ENGROSSED                                                          |
 4|SENATE BILL NO. 609                  By: Coleman and Hall of the       |
  |                                                              Senate   |
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  |                                         and                           |
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  |                                         Hilbert of the House          |
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 8|                                                                       |
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10|                        COMMITTEE SUBSTITUTE                           |
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11|       An Act relating to tax; amending 62 O.S. 2011,                  |
  |       Sections 856, 860 and 866, which relate to the Local            |
12|       Development Act; modifying required content of                  |
  |       project plans; modifying provisions related to                  |
13|       duration of certain districts based on certain                  |
  |       industry description; modifying requirements for                |
14|       certain written agreement; amending 68 O.S. 2011,               |
  |       Section 2902, as last amended by Section 1, Chapter             |
15|       258, O.S.L. 2019 (68 O.S. Supp. 2020, Section 2902),            |
  |       which relates to exemption for manufacturing                    |
16|       facilities; modifying definitions; modifying                    |
  |       eligibility for exemption based on certain industry             |
17|       description; providing exception for certain personal           |
  |       property; adjusting certain investment requirement to           |
18|       inflation index; requiring the Oklahoma Tax                     |
  |       Commission to publish certain adjustments; adjusting            |
19|       wage threshold; requiring wages exceed certain                  |
  |       Quality Jobs Program Act requirements; authorizing              |
20|       the Oklahoma Tax Commission to request verification;            |
  |       removing exceptions for failure to meet certain                 |
21|       payroll requirements; modifying certain                         |
  |       classification; and providing an effective date.                |
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23|                                                                       |
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24|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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   Req. No. 8102                                                   Page 1
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 1|    SECTION 1.     AMENDATORY     62 O.S. 2011, Section 856, is        |
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 2|amended to read as follows:                                            |
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 3|    Section 856.  A.  The governing body shall designate and adopt     |
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 4|the proposed boundaries of any district and the proposed boundaries    |
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 5|of any project area.  Except as otherwise provided in this             |
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 6|subsection, any districts created by a city or town shall be           |
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 7|confined to that territory within the corporate limits of such city    |
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 8|or town and any districts created by a county shall be confined to     |
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 9|that territory within the unincorporated areas of the county.  Any     |
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10|city, town or county may by agreement jointly create a district with   |
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11|another entity.                                                        |
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12|    B.  Upon the adoption and approval of the project plan, the        |
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13|governing body shall adopt an ordinance or resolution, whichever is    |
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14|applicable, which:                                                     |
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15|    1.  Describes the boundaries of districts and project areas        |
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16|sufficiently definite to identify with ordinary and reasonable         |
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17|certainty the territory included in them;                              |
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18|    2.  Creates the district as of a date provided in it or defers     |
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19|determination of such date, provided such date must be no more than    |
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20|ten (10) years after the date of approval of the project plan;         |
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21|    3.  Assigns a name to the district for identification purposes.    |
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22|The first district created shall be known as either an Incentive       |
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23|District or Increment District Number One, City, Town or County of     |
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24|__________, whichever is applicable.  Each subsequently created        |
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   Req. No. 8102                                                   Page 2
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 1|district shall be appropriately named and shall be assigned the next   |
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 2|consecutive number; and                                                |
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 3|    4.  Contains findings that:                                        |
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 4|         a.   the project area or district meets at least one of the   |
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 5|              following criteria:                                      |
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 6|              (1)  is a reinvestment area,                             |
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 7|              (2)  is a historic preservation area,                    |
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 8|              (3)  is an enterprise area, or                           |
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 9|              (4)  is a combination of the areas specified in          |
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10|                   divisions (1), (2) and (3) of this subparagraph,    |
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11|         b.   the improvement of the area is likely to enhance the     |
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12|              value of other real property in the area and to          |
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13|              promote the general public interest.  It shall not be    |
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14|              necessary to identify the specific parcels meeting the   |
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15|              criteria, and                                            |
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16|         c.   the guidelines specified in paragraphs 1 and 2 of        |
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17|              Section 852 of this title shall be followed,             |
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18|         d.   the aggregate net assessed value of the taxable          |
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19|              property in all districts as determined pursuant to      |
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20|              Section 862 of this title within the city or town        |
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21|              shall not exceed twenty-five percent (25%) of the        |
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22|              total net assessed value of taxable property within      |
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23|              the city or town for cities or towns having a            |
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24|              population of fifty thousand (50,000) or more or shall   |
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   Req. No. 8102                                                   Page 3
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 1|              not exceed thirty-five percent (35%) of the total net    |
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 2|              assessed value of taxable property within the city or    |
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 3|              town for cities or towns having a population of less     |
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 4|              than fifty thousand (50,000),                            |
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 5|         e.   for projects approved by a county, the aggregate net     |
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 6|              assessed value of the taxable property in all            |
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 7|              districts as determined pursuant to Section 862 of       |
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 8|              this title within the county shall not exceed fifteen    |
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 9|              percent (15%) of the total net assessed value of the     |
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10|              taxable property within the county,                      |
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11|         f.   the aggregate net assessed value of the taxable          |
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12|              property in all districts as determined pursuant to      |
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13|              Section 862 of this title within the city, the town or   |
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14|              the county shall not exceed twenty-five percent (25%)    |
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15|              of the total net assessed value of any affected school   |
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16|              district located within the city, town or county, and    |
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17|         g.   the land area of this district and all other districts   |
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18|              within the city, the town or the county shall not        |
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19|              exceed twenty-five percent (25%) of the total land       |
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20|              area of the city, the town or the county.                |
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21|    C.  It is the intention of the Legislature in adopting the Local   |
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22|Development Act that no long-term contractual obligation be created    |
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23|by the mere adoption of an ordinance or resolution establishing an     |
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24|increment district.  Notwithstanding any provision contained in an     |
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   Req. No. 8102                                                   Page 4
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 1|ordinance, resolution or project plan, an ordinance or resolution      |
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 2|establishing an increment district shall constitute a legislative      |
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 3|act and may be repealed, modified or amended at any time during the    |
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 4|term of the increment district, by subsequent action of the            |
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 5|governing body except as otherwise authorized pursuant to Sections     |
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 6|854 and 863 of this title; provided, however, that no such ordinance   |
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 7|shall be repealed, modified or amended during the time that any        |
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 8|bonds payable from incremental revenues are outstanding without the    |
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 9|consent of the bondholders, if such bonds are issued pursuant to the   |
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10|provisions of Article X, Section 35 of the Oklahoma Constitution       |
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11|following its amendment by State Question No. 693.                     |
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12|    D.  However, nothing in the Local Development Act shall restrict   |
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13|the ability of:                                                        |
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14|    1.  Any city, town or county to:                                   |
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15|         a.    issue debt in accordance with the applicable            |
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16|              provisions of Article X of the Oklahoma Constitution,    |
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17|              and any statutes enacted in connection therewith, and    |
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18|         b.    use incremental revenues derived from an increment      |
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19|              district to pay principal, interest or premium           |
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20|              associated with such indebtedness; or                    |
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21|    2.  Any public entity, other than a city, town or county, to:      |
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22|         a.    issue tax apportionment bonds or notes in accordance    |
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23|              with Section 863 of this title or to issue other types   |
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24|                                                                       |
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   Req. No. 8102                                                   Page 5
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 1|              of revenue bonds or notes in accordance with other       |
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 2|              applicable provisions of Oklahoma law, and               |
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 3|         b.    use incremental revenues derived from an increment      |
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 4|              district to pay principal, interest or premium           |
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 5|              associated with such indebtedness.                       |
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 6|    SECTION 2.     AMENDATORY     62 O.S. 2011, Section 860, is        |
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 7|amended to read as follows:                                            |
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 8|    Section 860.  A.  A project plan may contain a provision that      |
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 9|certain local taxes may be subject to incentives or may be exempted    |
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10|in reinvestment areas, historic preservation areas or enterprise       |
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11|areas.                                                                 |
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12|    B.  The governing body may grant incentives or exemptions from     |
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13|local taxation only on the new investment made.  No ad valorem tax     |
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14|incentives or exemptions may be granted on the value of property       |
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15|which has been assessed or which is subject to assessment prior to     |
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16|the adoption of the project plan.  No ad valorem tax incentives or     |
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17|exemptions authorized in this section may be granted for retail        |
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18|establishments.  If a retail establishment is located in property      |
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19|which otherwise qualifies for an incentive or exemption pursuant to    |
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20|this section, the incentive or exemption shall not be allowed for      |
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21|that portion of the property used for such retail establishment.  As   |
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22|used in this subsection, "retail establishment" shall not include an   |
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23|establishment that provides lodging, including but not limited to a    |
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24|hotel, apartment hotel, public rooming house or motel.  No ad          |
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   Req. No. 8102                                                   Page 6
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 1|valorem tax incentives or exemptions authorized in this section may    |
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 2|be granted if the property is located in an increment district or as   |
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 3|long as the property is subject to the ad valorem tax exemption for    |
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 4|new or expanding manufacturing facilities as authorized by Section     |
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 5|6B of Article X of the Oklahoma Constitution.  In the event of         |
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 6|disposition by lease or sublease to a lessee not entitled to an ad     |
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 7|valorem tax exemption, the improvements placed thereon shall not be    |
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 8|entitled to an ad valorem tax exemption provided for in Section 850    |
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 9|et seq. of this title.  The Except as otherwise provided by this       |
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10|subsection, the incentives or exemptions, which may be full or         |
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11|partial, may be granted for a period not to exceed five (5) years;     |
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12|however, in enterprise zones incentives or exemptions may be granted   |
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13|for a period not to exceed six (6) years.  With respect to an          |
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14|establishment the business of which is described by U.S. Industry      |
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15|Number 518210 of the North American Industry Classification System     |
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16|(NAICS) Manual, 2017 revision, such incentives or exemptions may be    |
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17|granted for a period not to exceed twenty-five (25) years.             |
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18|    C.  No incentives or exemptions may be granted to any business     |
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19|or firm that is relocating from within the state and is subject to     |
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20|or in the process of recruitment by two or more governmental           |
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21|entities within the state unless the governmental entity in which      |
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22|the business or firm does not locate adopts a resolution giving        |
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23|their approval to the granting of incentives or exemptions to the      |
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24|business or firm locating in the competing governmental entity.  No    |
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   Req. No. 8102                                                   Page 7
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 1|incentives or exemptions may be granted to an out-of-state business    |
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 2|or firm that is subject to or in the process of recruitment by two     |
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 3|or more governmental entities within the state except as otherwise     |
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 4|provided for in this subsection.  The prohibition against incentives   |
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 5|or exemptions to a business or firm relocating within the state may    |
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 6|be waived upon application by the governing body to, and approval      |
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 7|of, the Director of the Oklahoma Department of Commerce.  In order     |
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 8|for the Director to approve the waiver, the Director must find that    |
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 9|the incentives or exemptions are necessary and sufficient to attract   |
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10|the business or firm and that the benefits generated by the business   |
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11|location outweigh the costs of the business location.                  |
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12|    D.  A project plan may contain a provision that ad valorem taxes   |
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13|may be exempted in a commercial historic preservation area that is     |
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14|adjacent to and serves designated historical residential areas for     |
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15|neighborhood commercial preservation purposes in order for the         |
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16|neighborhood to retain its basic character and scale.  No ad valorem   |
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17|tax exemption may be granted on the value of property which has been   |
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18|assessed or which is subject to assessment prior to the adoption of    |
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19|the project plan.  No ad valorem tax exemption shall be granted        |
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20|pursuant to the provisions of this subsection for single-family        |
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21|residences.  The governing body may grant the exemption only on the    |
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22|increase in value of the property.  The exemptions may be granted      |
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23|for a specific period of time as determined by a written agreement     |
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24|between the property owners of the area and the governing body and     |
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   Req. No. 8102                                                   Page 8
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 1|may be renewed.  Uses of the property eligible for this exemption      |
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 2|may include but not be limited to commercial, office or multifamily    |
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 3|residential use.                                                       |
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 4|    SECTION 3.     AMENDATORY     62 O.S. 2011, Section 866, is        |
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 5|amended to read as follows:                                            |
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 6|    Section 866.  A.  There shall be a written agreement between the   |
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 7|governing body and the property owners who are granted tax             |
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 8|incentives or exemptions pursuant to Section 860 of this title.  The   |
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 9|written agreement may include, but shall not be limited to, the        |
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10|following:                                                             |
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11|    1.  List the kind, number, and location A description of all       |
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12|proposed improvements to the property;                                 |
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13|    2.  Provide access to and authorize inspection of the property     |
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14|by city, town or county employees to ensure that the improvements or   |
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15|repairs are made according to the specifications and conditions of     |
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16|the agreement;                                                         |
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17|    3.  Limit the uses of the property consistent with the general     |
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18|purpose of encouraging development or redevelopment of the area        |
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19|during the period that the tax incentives or exemptions or the         |
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20|increment financing are in effect;                                     |
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21|    4.  Provide for recapturing the local tax revenue lost as a        |
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22|result of the agreement if the owner of the property fails to make     |
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23|the improvements or repairs as provided by the agreement; and          |
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24|                                                                       |
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   Req. No. 8102                                                   Page 9
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 1|    5.  Include any other requirement deemed by the governing body     |
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 2|necessary to carry out the agreement.                                  |
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 3|    B.  There shall be a written agreement between the governing       |
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 4|body and the property owners in historic preservation areas who are    |
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 5|granted ad valorem tax exemptions pursuant to subsection D of          |
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 6|Section 860 of this title.  The written agreement shall include the    |
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 7|following:                                                             |
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 8|    1.  List the location of the property;                             |
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 9|    2.  Provide access to and authorize inspection of the property     |
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10|by city, town or county employees to ensure that the property is       |
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11|being maintained according to the specifications and conditions of     |
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12|the agreement;                                                         |
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13|    3.  Limit the uses of the property consistent with the general     |
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14|purpose of encouraging neighborhood commercial preservation of the     |
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15|area during the period that the ad valorem tax exemptions are in       |
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16|effect;                                                                |
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17|    4.  Provide for recapturing the ad valorem tax revenue lost as a   |
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18|result of the agreement if the owner of the property fails to          |
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19|maintain the property as provided by the agreement;                    |
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20|    5.  Specify the time frame of the agreement including whether      |
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21|renewals can occur, at what time such renewals can occur and under     |
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22|what conditions renewals can occur;                                    |
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   Req. No. 8102                                                   Page 10
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 1|    6.  Specify rehabilitations, preservation efforts and other        |
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 2|specific actions that should be taken by the property owners on an     |
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 3|individual or collective basis;                                        |
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 4|    7.  Provide for reciprocal actions by public entities to           |
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 5|protect, enhance and improve the commercial historic preservation      |
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 6|area and the surrounding residential areas served by such districts;   |
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 7|    8.  Provide review and approval procedures that may be used when   |
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 8|usage or ownership of the property changes; and                        |
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 9|    9.  Include any other requirement deemed by the governing body     |
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10|necessary to carry out the agreement.                                  |
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11|    C.  The governing body shall enter into written agreements with    |
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12|active project participants of increment projects.  The written        |
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13|agreement may include, but shall not be limited to, the provisions     |
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14|specified in paragraphs 1 through 5 of subsection A of this section.   |
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15|    SECTION 4.     AMENDATORY     68 O.S. 2011, Section 2902, as       |
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16|last amended by Section 1, Chapter 258, O.S.L. 2019 (68 O.S. Supp.     |
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17|2020, Section 2902), is amended to read as follows:                    |
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18|    Section 2902.  A.  Except as otherwise provided by subsection H    |
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19|of Section 3658 of this title pursuant to which the exemption          |
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20|authorized by this section may not be claimed, a qualifying            |
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21|manufacturing concern, as defined by Section 6B of Article X of the    |
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22|Oklahoma Constitution, and as further defined herein, shall be         |
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23|exempt from the levy of any ad valorem taxes upon new, expanded or     |
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24|acquired manufacturing facilities, including facilities engaged in     |
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   Req. No. 8102                                                   Page 11
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 1|research and development, for a period of five (5) years.  The         |
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 2|provisions of Section 6B of Article X of the Oklahoma Constitution     |
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 3|requiring an existing facility to have been unoccupied for a period    |
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 4|of twelve (12) months prior to acquisition shall be construed as a     |
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 5|qualification for a facility to initially receive an exemption, and    |
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 6|shall not be deemed to be a qualification for that facility to         |
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 7|continue to receive an exemption in each of the four (4) years         |
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 8|following the initial year for which the exemption was granted.        |
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 9|Such facilities are hereby classified for the purposes of taxation     |
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10|as provided in Section 22 of Article X of the Oklahoma Constitution.   |
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11|    B.  For purposes of this section, the following definitions        |
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12|shall apply:                                                           |
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13|    1.  "Manufacturing facilities" means facilities engaged in the     |
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14|mechanical or chemical transformation of materials or substances       |
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15|into new products and except as provided by paragraph 8 6 of           |
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16|subsection C of this section shall include:                            |
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17|         a.   establishments which have received a manufacturer        |
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18|              exemption permit pursuant to the provisions of Section   |
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19|              1359.2 of this title,                                    |
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20|         b.   facilities, including repair and replacement parts,      |
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21|              primarily engaged in aircraft repair, building and       |
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22|              rebuilding whether or not on a factory basis,            |
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23|         c.   establishments primarily engaged in computer services    |
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24|              and data processing as defined under Industrial Group    |
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   Req. No. 8102                                                   Page 12
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 1|              Numbers 5112 and 5415, and U.S. Industry Number 334611   |
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 2|              and 519130 of the NAICS Manual, latest revision, and     |
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 3|              which derive at least fifty percent (50%) of their       |
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 4|              annual gross revenues from the sale of a product or      |
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 5|              service to an out-of-state buyer or consumer, and as     |
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 6|              defined under Industrial Group Number 5142 of the        |
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 7|              NAICS Manual, latest revision, which derive at least     |
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 8|              eighty percent (80%) of their annual gross revenues      |
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 9|              from the sale of a product or service to an              |
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10|              out-of-state buyer or consumer.  Eligibility as a        |
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11|              manufacturing facility pursuant to this subparagraph     |
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12|              shall be established, subject to review by the           |
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13|              Oklahoma Tax Commission, by annually filing an           |
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14|              affidavit with the Tax Commission stating that the       |
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15|              facility so qualifies and such other information as      |
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16|              required by the Tax Commission.  For purposes of         |
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17|              determining whether annual gross revenues are derived    |
  |                                                                       |
18|              from sales to out-of-state buyers, all sales to the      |
  |                                                                       |
19|              federal government shall be considered to be an          |
  |                                                                       |
20|              out-of-state buyer,                                      |
  |                                                                       |
21|         d.   for which facilities that the investment cost of the     |
  |                                                                       |
22|              construction, acquisition or expansion of the            |
  |                                                                       |
23|              manufacturing facility is Two Hundred Fifty Thousand     |
  |                                                                       |
24|              Dollars ($250,000.00) Five Hundred Thousand Dollars      |
  |                                                                       |
   Req. No. 8102                                                   Page 13
___________________________________________________________________________

 1|              ($500,000.00) or more with respect to assets placed      |
  |                                                                       |
 2|              into service during calendar year 2022.  For             |
  |                                                                       |
 3|              subsequent calendar years, the investment required       |
  |                                                                       |
 4|              shall be increased annually by a percentage equal to     |
  |                                                                       |
 5|              the previous year's increase in the Consumer Price       |
  |                                                                       |
 6|              Index-All Urban Consumers ("CPI-U") and such adjusted    |
  |                                                                       |
 7|              amount shall be the required investment cost in order    |
  |                                                                       |
 8|              to qualify for the exemption authorized by this          |
  |                                                                       |
 9|              section.  The Oklahoma Department of Commerce shall      |
  |                                                                       |
10|              determine the amount of the increase, if any, on         |
  |                                                                       |
11|              January 1 of each year.  The Oklahoma Tax Commission     |
  |                                                                       |
12|              shall publish on its website at least annually the       |
  |                                                                       |
13|              adjusted dollar amount in order to qualify for the       |
  |                                                                       |
14|              exemption authorized by this section and shall include   |
  |                                                                       |
15|              the adjusted dollar amount in any of its relevant        |
  |                                                                       |
16|              forms or publications with respect to the exemption.     |
  |                                                                       |
17|              Provided, "investment cost" shall not include the cost   |
  |                                                                       |
18|              of direct replacement, refurbishment, repair or          |
  |                                                                       |
19|              maintenance of existing machinery or equipment, except   |
  |                                                                       |
20|              that "investment cost" shall include capital             |
  |                                                                       |
21|              expenditures for direct replacement, refurbishment,      |
  |                                                                       |
22|              repair or maintenance of existing machinery or           |
  |                                                                       |
23|              equipment that qualifies for depreciation and/or         |
  |                                                                       |
24|              amortization pursuant to the Internal Revenue Code of    |
  |                                                                       |
   Req. No. 8102                                                   Page 14
___________________________________________________________________________

 1|              1986, as amended, and such expenditures shall be         |
  |                                                                       |
 2|              eligible as a part of an "expansion" that otherwise      |
  |                                                                       |
 3|              qualifies under this section, and                        |
  |                                                                       |
 4|         e.   establishments primarily engaged in distribution as      |
  |                                                                       |
 5|              defined under Industry Numbers 49311, 49312, 49313 and   |
  |                                                                       |
 6|              49319 and Industry Sector Number 42 of the NAICS         |
  |                                                                       |
 7|              Manual, latest revision, and which meet the following    |
  |                                                                       |
 8|              qualifications:                                          |
  |                                                                       |
 9|              (1)  construction with an initial capital investment     |
  |                                                                       |
10|                   of at least Five Million Dollars ($5,000,000.00),   |
  |                                                                       |
11|              (2)  employment of at least one hundred (100)            |
  |                                                                       |
12|                   full-time-equivalent employees, as certified by     |
  |                                                                       |
13|                   the Oklahoma Employment Security Commission,        |
  |                                                                       |
14|              (3)  payment of wages or salaries to its employees at    |
  |                                                                       |
15|                   a wage which equals or exceeds one hundred          |
  |                                                                       |
16|                   seventy-five percent (175%) of the federally        |
  |                                                                       |
17|                   mandated minimum wage, as certified by the          |
  |                                                                       |
18|                   Oklahoma Employment Security Commission the         |
  |                                                                       |
19|                   average wage requirements in the Oklahoma Quality   |
  |                                                                       |
20|                   Jobs Program Act for the year in which the real     |
  |                                                                       |
21|                   property was placed into service, and               |
  |                                                                       |
22|              (4)  commencement of construction on or after November   |
  |                                                                       |
23|                   1, 2007, with construction to be completed within   |
  |                                                                       |
24|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 15
___________________________________________________________________________

 1|                   three (3) years from the date of the commencement   |
  |                                                                       |
 2|                   of construction,                                    |
  |                                                                       |
 3|         f.   facilities engaged in the manufacturing, compounding,    |
  |                                                                       |
 4|              processing or fabrication of materials into articles     |
  |                                                                       |
 5|              of tangible personal property according to the special   |
  |                                                                       |
 6|              order of a customer (custom order manufacturing) by      |
  |                                                                       |
 7|              manufacturers classified as operating in North           |
  |                                                                       |
 8|              American Industry Classification System (NAICS)          |
  |                                                                       |
 9|              Sectors 32 and 33, but does not include such custom      |
  |                                                                       |
10|              order manufacturing by manufacturers classified in       |
  |                                                                       |
11|              other NAICS code sectors, and                            |
  |                                                                       |
12|         g.   with respect to any entity making an application for     |
  |                                                                       |
13|              the exemption authorized by this section on or after     |
  |                                                                       |
14|              January 1, 2022, the establishment making application    |
  |                                                                       |
15|              for exempt treatment of real or personal property        |
  |                                                                       |
16|              acquired or improved beginning January 1, 2022, and      |
  |                                                                       |
17|              for any calendar year thereafter, the entity shall be    |
  |                                                                       |
18|              required to pay new direct jobs, as defined by Section   |
  |                                                                       |
19|              3603 of this title for purposes of the Oklahoma          |
  |                                                                       |
20|              Quality Jobs Program Act, an average annualized wage     |
  |                                                                       |
21|              which equals or exceeds the average wage requirement     |
  |                                                                       |
22|              in the Oklahoma Quality Jobs Program Act for the year    |
  |                                                                       |
23|              in which the real or personal property was placed into   |
  |                                                                       |
24|              service.  The Oklahoma Tax Commission may request        |
  |                                                                       |
   Req. No. 8102                                                   Page 16
___________________________________________________________________________

 1|              verification from the Oklahoma Department of Commerce    |
  |                                                                       |
 2|              that an establishment seeking an exemption for real or   |
  |                                                                       |
 3|              personal property pays an average annualized wage that   |
  |                                                                       |
 4|              equals or exceeds the average wage requirement in        |
  |                                                                       |
 5|              effect for the year in which the real or personal        |
  |                                                                       |
 6|              property was placed into service.                        |
  |                                                                       |
 7|    Eligibility as a manufacturing facility pursuant to this           |
  |                                                                       |
 8|subparagraph shall be established, subject to review by the Tax        |
  |                                                                       |
 9|Commission, by annually filing an affidavit with the Tax Commission    |
  |                                                                       |
10|stating that the facility so qualifies and containing such other       |
  |                                                                       |
11|information as required by the Tax Commission.                         |
  |                                                                       |
12|    Provided, eating and drinking places, as well as other retail      |
  |                                                                       |
13|establishments, shall not qualify as manufacturing facilities for      |
  |                                                                       |
14|purposes of this section, nor shall centrally assessed properties.     |
  |                                                                       |
15|    Eligibility as a manufacturing facility pursuant to this           |
  |                                                                       |
16|subparagraph shall be established, subject to review by the Tax        |
  |                                                                       |
17|Commission, by annually filing an application with the Tax             |
  |                                                                       |
18|Commission stating that the facility so qualifies and containing       |
  |                                                                       |
19|such other information as required by the Tax Commission;              |
  |                                                                       |
20|    2.  "Facility" and "facilities", except as otherwise provided by   |
  |                                                                       |
21|this section, means and includes the land, buildings, structures,      |
  |                                                                       |
22|and improvements used directly and exclusively in the manufacturing    |
  |                                                                       |
23|process.  Effective January 1, 2022, and for each calendar year        |
  |                                                                       |
24|thereafter, for establishments which have received a manufacturer      |
  |                                                                       |
   Req. No. 8102                                                   Page 17
___________________________________________________________________________

 1|exemption permit pursuant to the provisions of Section 1359.2 of       |
  |                                                                       |
 2|this title, or facilities engaged in manufacturing activities          |
  |                                                                       |
 3|defined or classified in the NAICS Manual under Industry Nos. 311111   |
  |                                                                       |
 4|through 339999, inclusive, but for no other establishments, facility   |
  |                                                                       |
 5|and facilities means and includes the land, buildings, structures,     |
  |                                                                       |
 6|improvements, machinery, fixtures, equipment and other personal        |
  |                                                                       |
 7|property used directly and exclusively in the manufacturing process;   |
  |                                                                       |
 8|and                                                                    |
  |                                                                       |
 9|    3.  "Research and development" means activities directly related   |
  |                                                                       |
10|to and conducted for the purpose of discovering, enhancing,            |
  |                                                                       |
11|increasing or improving future or existing products or processes or    |
  |                                                                       |
12|productivity.                                                          |
  |                                                                       |
13|    C.  The following provisions shall apply:                          |
  |                                                                       |
14|    1.  A manufacturing concern shall be entitled to the exemption     |
  |                                                                       |
15|herein provided for each new manufacturing facility constructed,       |
  |                                                                       |
16|each existing manufacturing facility acquired and the expansion of     |
  |                                                                       |
17|existing manufacturing facilities on the same site, as such terms      |
  |                                                                       |
18|are defined by Section 6B of Article X of the Oklahoma Constitution    |
  |                                                                       |
19|and by this section;                                                   |
  |                                                                       |
20|    2.  Except as otherwise provided in paragraph 5 of this            |
  |                                                                       |
21|subsection, no No manufacturing concern shall receive more than one    |
  |                                                                       |
22|five-year exemption for any one manufacturing facility unless the      |
  |                                                                       |
23|expansion which qualifies the manufacturing facility for an            |
  |                                                                       |
24|additional five-year exemption meets the requirements of paragraph 4   |
  |                                                                       |
   Req. No. 8102                                                   Page 18
___________________________________________________________________________

 1|of this subsection and the employment level established for any        |
  |                                                                       |
 2|previous exemption is maintained;                                      |
  |                                                                       |
 3|    3.  Any exemption as to the expansion of an existing               |
  |                                                                       |
 4|manufacturing facility shall be limited to the increase in ad          |
  |                                                                       |
 5|valorem taxes directly attributable to the expansion;                  |
  |                                                                       |
 6|    4.  Except as provided in paragraphs 5 and 6 of this subsection,   |
  |                                                                       |
 7|all All initial applications for any exemption for a new, acquired     |
  |                                                                       |
 8|or expanded manufacturing facility shall be granted only if:           |
  |                                                                       |
 9|         a.   there is a net increase in annualized base payroll       |
  |                                                                       |
10|              over the initial payroll of at least Two Hundred Fifty   |
  |                                                                       |
11|              Thousand Dollars ($250,000.00) if the facility is        |
  |                                                                       |
12|              located in a county with a population of fewer than      |
  |                                                                       |
13|              seventy-five thousand (75,000), according to the most    |
  |                                                                       |
14|              recent Federal Decennial Census, while maintaining or    |
  |                                                                       |
15|              increasing base payroll in subsequent years, or at       |
  |                                                                       |
16|              least One Million Dollars ($1,000,000.00) if the         |
  |                                                                       |
17|              facility is located in a county with a population of     |
  |                                                                       |
18|              seventy-five thousand (75,000) or more, according to     |
  |                                                                       |
19|              the most recent Federal Decennial Census, while          |
  |                                                                       |
20|              maintaining or increasing base payroll in subsequent     |
  |                                                                       |
21|              years; provided the payroll requirement of this          |
  |                                                                       |
22|              subparagraph shall be waived for claims for              |
  |                                                                       |
23|              exemptions, including claims previously denied or on     |
  |                                                                       |
24|              appeal on March 3, 2010, for all initial applications    |
  |                                                                       |
   Req. No. 8102                                                   Page 19
___________________________________________________________________________

 1|              for exemption filed on or after January 1, 2004, and     |
  |                                                                       |
 2|              on or before March 31, 2009, and all subsequent annual   |
  |                                                                       |
 3|              exemption applications filed related to the initial      |
  |                                                                       |
 4|              application for exemption, for an applicant, if the      |
  |                                                                       |
 5|              facility has been located in Oklahoma for at least       |
  |                                                                       |
 6|              fifteen (15) years engaged in marine engine              |
  |                                                                       |
 7|              manufacturing as defined under U.S. Industry Number      |
  |                                                                       |
 8|              333618 of the NAICS Manual, latest revision, and has     |
  |                                                                       |
 9|              maintained an average employment of five hundred (500)   |
  |                                                                       |
10|              or more full-time-equivalent employees over a ten-year   |
  |                                                                       |
11|              period.  Any applicant that qualifies for the payroll    |
  |                                                                       |
12|              requirement waiver as outlined in the previous           |
  |                                                                       |
13|              sentence and subsequently closes its Oklahoma            |
  |                                                                       |
14|              manufacturing plant prior to January 1, 2012, may be     |
  |                                                                       |
15|              disqualified for exemption and subject to recapture.     |
  |                                                                       |
16|              For an applicant engaged in paperboard manufacturing     |
  |                                                                       |
17|              as defined under U.S. Industry Number 322130 of the      |
  |                                                                       |
18|              NAICS Manual, latest revision, union master payouts      |
  |                                                                       |
19|              paid by the buyer of the facility to specified           |
  |                                                                       |
20|              individuals employed by the facility at the time of      |
  |                                                                       |
21|              purchase, as specified under the purchase agreement,     |
  |                                                                       |
22|              shall be excluded from payroll for purposes of this      |
  |                                                                       |
23|              section.                                                 |
  |                                                                       |
24|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 20
___________________________________________________________________________

 1|              In order to provide certainty with respect to            |
  |                                                                       |
 2|              investments in manufacturing facilities pertaining to    |
  |                                                                       |
 3|              all initial applications for exemption filed on or       |
  |                                                                       |
 4|              after January 1, 2016, the following definitions shall   |
  |                                                                       |
 5|              apply:                                                   |
  |                                                                       |
 6|              (1)   "base payroll" shall mean total payroll adjusted   |
  |                                                                       |
 7|                   for any nonrecurring bonuses, exercise of stock     |
  |                                                                       |
 8|                   option or stock rights and other nonrecurring,      |
  |                                                                       |
 9|                   extraordinary items included in total payroll,      |
  |                                                                       |
10|                   and                                                 |
  |                                                                       |
11|              (2)   "initial payroll" shall mean base payroll for      |
  |                                                                       |
12|                   the year immediately preceding the initial          |
  |                                                                       |
13|                   construction, acquisition or expansion.             |
  |                                                                       |
14|              The Tax Commission shall verify payroll information      |
  |                                                                       |
15|              through the Oklahoma Employment Security Commission by   |
  |                                                                       |
16|              using reports from the Oklahoma Employment Security      |
  |                                                                       |
17|              Commission for the calendar year immediately preceding   |
  |                                                                       |
18|              the year for which initial application is made for       |
  |                                                                       |
19|              base-line payroll, which must be maintained or           |
  |                                                                       |
20|              increased for each subsequent year; provided, a          |
  |                                                                       |
21|              manufacturing facility shall have the option of          |
  |                                                                       |
22|              excluding from its payroll, for purposes of this         |
  |                                                                       |
23|              section:                                                 |
  |                                                                       |
24|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 21
___________________________________________________________________________

 1|                        i.    payments to sole proprietors, members    |
  |                                                                       |
 2|                             of a partnership, members of a limited    |
  |                                                                       |
 3|                             liability company who own at least ten    |
  |                                                                       |
 4|                             percent (10%) of the capital of the       |
  |                                                                       |
 5|                             limited liability company or              |
  |                                                                       |
 6|                             stockholder-employees of a corporation    |
  |                                                                       |
 7|                             who own at least ten percent (10%) of     |
  |                                                                       |
 8|                             the stock in the corporation, and         |
  |                                                                       |
 9|                       ii.    any nonrecurring bonuses, exercise of    |
  |                                                                       |
10|                             stock option or stock rights or other     |
  |                                                                       |
11|                             nonrecurring, extraordinary items         |
  |                                                                       |
12|                             included in total payroll numbers as      |
  |                                                                       |
13|                             reported by the Oklahoma Employment       |
  |                                                                       |
14|                             Security Commission.  A manufacturing     |
  |                                                                       |
15|                             facility electing either option shall     |
  |                                                                       |
16|                             indicate such election upon its           |
  |                                                                       |
17|                             application for an exemption under this   |
  |                                                                       |
18|                             section.  Any manufacturing facility      |
  |                                                                       |
19|                             electing either option shall submit       |
  |                                                                       |
20|                             such information as the Tax Commission    |
  |                                                                       |
21|                             may require in order to verify payroll    |
  |                                                                       |
22|                             information.  Payroll information         |
  |                                                                       |
23|                             submitted pursuant to the provisions of   |
  |                                                                       |
24|                             this paragraph shall be submitted to      |
  |                                                                       |
   Req. No. 8102                                                   Page 22
___________________________________________________________________________

 1|                             the Tax Commission and shall be subject   |
  |                                                                       |
 2|                             to the provisions of Section 205 of       |
  |                                                                       |
 3|                             this title, and                           |
  |                                                                       |
 4|         b.   the facility offers, or will offer within one hundred    |
  |                                                                       |
 5|              eighty (180) days of the date of employment, a basic     |
  |                                                                       |
 6|              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|    For purposes of this section, calculation of the amount of         |
  |                                                                       |
13|increased base payroll shall be measured from the start of initial     |
  |                                                                       |
14|construction or expansion to the completion of such construction or    |
  |                                                                       |
15|expansion or for three (3) years from the start of initial             |
  |                                                                       |
16|construction or expansion, whichever occurs first.  The amount of      |
  |                                                                       |
17|increased base payroll shall include payroll for                       |
  |                                                                       |
18|full-time-equivalent employees in this state who are employed by an    |
  |                                                                       |
19|entity other than the facility which has previously or is currently    |
  |                                                                       |
20|qualified to receive an exemption pursuant to the provisions of this   |
  |                                                                       |
21|section and who are leased or otherwise provided to the facility, if   |
  |                                                                       |
22|such employment did not exist in this state prior to the start of      |
  |                                                                       |
23|initial construction or expansion of the facility.  The                |
  |                                                                       |
24|manufacturing concern shall submit an affidavit to the Tax             |
  |                                                                       |
   Req. No. 8102                                                   Page 23
___________________________________________________________________________

 1|Commission, signed by an officer, stating that the construction,       |
  |                                                                       |
 2|acquisition or expansion of the facility will result in a net          |
  |                                                                       |
 3|increase in the annualized base payroll as required by this            |
  |                                                                       |
 4|paragraph and that full-time-equivalent employees of the facility      |
  |                                                                       |
 5|are or will be offered a basic health benefits plan as required by     |
  |                                                                       |
 6|this paragraph.  If, after the completion of such construction or      |
  |                                                                       |
 7|expansion or after three (3) years from the start of initial           |
  |                                                                       |
 8|construction or expansion, whichever occurs first, the construction,   |
  |                                                                       |
 9|acquisition or expansion has not resulted in a net increase in the     |
  |                                                                       |
10|amount of annualized base payroll, if required, or any other           |
  |                                                                       |
11|qualification specified in this paragraph has not been met, the        |
  |                                                                       |
12|manufacturing concern shall pay an amount equal to the amount of any   |
  |                                                                       |
13|exemption granted, including penalties and interest thereon, to the    |
  |                                                                       |
14|Tax Commission for deposit to the Ad Valorem Reimbursement Fund;       |
  |                                                                       |
15|    5.  If a facility fails to meet the base payroll requirement of    |
  |                                                                       |
16|subparagraph a of paragraph 4 of this subsection, the payroll          |
  |                                                                       |
17|requirement shall be waived for claims for exemptions, including       |
  |                                                                       |
18|claims previously denied or on appeal on June 1, 2009, for all         |
  |                                                                       |
19|initial applications for exemption filed on or after January 1,        |
  |                                                                       |
20|2004, and on or before March 31, 2009, and all subsequent annual       |
  |                                                                       |
21|exemption applications filed related to such initial application for   |
  |                                                                       |
22|exemption, for an applicant, if the facility:                          |
  |                                                                       |
23|                                                                       |
  |                                                                       |
24|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 24
___________________________________________________________________________

 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|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 25
___________________________________________________________________________

 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,       |
  |                                                                       |
   Req. No. 8102                                                   Page 26
___________________________________________________________________________

 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 Except as otherwise provided by this paragraph, any new,   |
  |                                                                       |
10|acquired, or expanded computer data processing, data preparation, or   |
  |                                                                       |
11|information processing services provider classified in Industrial      |
  |                                                                       |
12|Group Number 7374 of the SIC Manual, latest revision, and U.S.         |
  |                                                                       |
13|Industry Number 514210 518210 of the North American Industrial         |
  |                                                                       |
14|Classification System (NAICS) Manual, latest 2017 revision, may        |
  |                                                                       |
15|apply for exemptions under this section for each year in which new,    |
  |                                                                       |
16|acquired, or expanded capital improvements to the facility are made    |
  |                                                                       |
17|for assets placed in service not later than December 31, 2021, if:     |
  |                                                                       |
18|         a.   there is a net increase in annualized payroll of the     |
  |                                                                       |
19|              applicant at any facility or facilities of the           |
  |                                                                       |
20|              applicant in this state of at least Two Hundred Fifty    |
  |                                                                       |
21|              Thousand Dollars ($250,000.00), which is attributable    |
  |                                                                       |
22|              to the capital improvements, or a net increase of        |
  |                                                                       |
23|              Seven Million Dollars ($7,000,000.00) or more in         |
  |                                                                       |
24|              capital improvements, while maintaining or increasing    |
  |                                                                       |
   Req. No. 8102                                                   Page 27
___________________________________________________________________________

 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|    An establishment described by this paragraph, the primary          |
  |                                                                       |
13|business activity of which is described by Industry No. 518210 of      |
  |                                                                       |
14|the North American Industry Classification System (NAICS) Manual,      |
  |                                                                       |
15|2017 revision, that has applied for and been granted an exemption      |
  |                                                                       |
16|for personal property at any time within five (5) years prior to the   |
  |                                                                       |
17|effective date of this act, may apply for exemptions for items of      |
  |                                                                       |
18|personal property to be located within improvements to real property   |
  |                                                                       |
19|owned by the establishment and such real property and improvements     |
  |                                                                       |
20|having been exempt from ad valorem taxation prior to the effective     |
  |                                                                       |
21|date of this act pursuant to the provisions of this section if such    |
  |                                                                       |
22|personal property is placed in service not later than December 31,     |
  |                                                                       |
23|2036.  No additional personal property of such establishment placed    |
  |                                                                       |
24|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 28
___________________________________________________________________________

 1|in service after such date shall qualify for the exempt treatment      |
  |                                                                       |
 2|otherwise authorized pursuant to this paragraph;                       |
  |                                                                       |
 3|    8. 6.  Effective January 1, 2017, an entity engaged in electric    |
  |                                                                       |
 4|power generation by means of wind, as described by the North           |
  |                                                                       |
 5|American Industry Classification System, No. 221119, shall not be      |
  |                                                                       |
 6|defined as a qualifying manufacturing concern for purposes of the      |
  |                                                                       |
 7|exemption otherwise authorized pursuant to Section 6B of Article X     |
  |                                                                       |
 8|of the Oklahoma Constitution or qualify as a "manufacturing            |
  |                                                                       |
 9|facility" as defined in this section.  No initial application for      |
  |                                                                       |
10|exemption shall be filed by or accepted from an entity engaged in      |
  |                                                                       |
11|electric power generation by means of wind on or after January 1,      |
  |                                                                       |
12|2018; and                                                              |
  |                                                                       |
13|    9. 7.  An entity or applicant engaged in an industry as defined    |
  |                                                                       |
14|under U.S. Industry Number 324110 of the NAICS Manual, latest          |
  |                                                                       |
15|revision, which has applied for or been granted an exemption for a     |
  |                                                                       |
16|time period which began on or after calendar year 2012 and before      |
  |                                                                       |
17|calendar year 2016 but which did not meet the payroll requirements     |
  |                                                                       |
18|of subparagraph a of paragraph 4 of this subsection because of         |
  |                                                                       |
19|nonrecurring bonuses, exercise of stock option or stock rights or      |
  |                                                                       |
20|other nonrecurring, extraordinary items included in total payroll in   |
  |                                                                       |
21|the previous year, shall be allowed an exemption, beginning with       |
  |                                                                       |
22|calendar year 2016, for the number of years, including the calendar    |
  |                                                                       |
23|year for which the exemption was denied, remaining in the entity's     |
  |                                                                       |
24|five-year exemption period, provided such entity attains or            |
  |                                                                       |
   Req. No. 8102                                                   Page 29
___________________________________________________________________________

 1|increases payroll at or above the initial or base payroll              |
  |                                                                       |
 2|established for the exemption.                                         |
  |                                                                       |
 3|    D.  1.  Except as provided in paragraph 2 of this subsection,      |
  |                                                                       |
 4|the five-year period of exemption from ad valorem taxes for any        |
  |                                                                       |
 5|qualifying manufacturing facility property shall begin on January 1    |
  |                                                                       |
 6|following the initial qualifying use of the property in the            |
  |                                                                       |
 7|manufacturing process.                                                 |
  |                                                                       |
 8|    2.  The five-year period of exemption from ad valorem taxes for    |
  |                                                                       |
 9|any qualifying manufacturing facility, as specified in subparagraphs   |
  |                                                                       |
10|a and b of this paragraph, which is located within a tax incentive     |
  |                                                                       |
11|district created pursuant to the Local Development Act by a county     |
  |                                                                       |
12|having a population of at least five hundred thousand (500,000),       |
  |                                                                       |
13|according to the most recent Federal Decennial Census, shall begin     |
  |                                                                       |
14|on January 1 following the expiration or termination of the ad         |
  |                                                                       |
15|valorem exemption, abatement, or other incentive provided through      |
  |                                                                       |
16|the tax incentive district.  Facilities qualifying pursuant to this    |
  |                                                                       |
17|subsection shall include:                                              |
  |                                                                       |
18|         a.    a manufacturing facility as defined in subparagraph c   |
  |                                                                       |
19|              of paragraph 1 of subsection B of this section, and      |
  |                                                                       |
20|         b.    an establishment primarily engaged in distribution as   |
  |                                                                       |
21|              defined under Industry Number 49311 of the North         |
  |                                                                       |
22|              American Industry Classification System for which the    |
  |                                                                       |
23|              initial capital investment was at least One Hundred      |
  |                                                                       |
24|              Eighty Million Dollars ($180,000,000.00); provided,      |
  |                                                                       |
   Req. No. 8102                                                   Page 30
___________________________________________________________________________

 1|              that the qualifying job creation and depreciable         |
  |                                                                       |
 2|              property investment occurred prior to calendar year      |
  |                                                                       |
 3|              2017 but not earlier than calendar year 2013.            |
  |                                                                       |
 4|    E.  Any person, firm or corporation claiming the exemption         |
  |                                                                       |
 5|herein provided for shall file each year for which exemption is        |
  |                                                                       |
 6|claimed, an application therefor with the county assessor of the       |
  |                                                                       |
 7|county in which the new, expanded or acquired facility is located.     |
  |                                                                       |
 8|The application shall be on a form or forms prescribed by the Tax      |
  |                                                                       |
 9|Commission, and shall be filed on or before March 15, except as        |
  |                                                                       |
10|provided in Section 2902.1 of this title, of each year in which the    |
  |                                                                       |
11|facility desires to take the exemption or within thirty (30) days      |
  |                                                                       |
12|from and after receipt by such person, firm or corporation of notice   |
  |                                                                       |
13|of valuation increase, whichever is later.  In a case where            |
  |                                                                       |
14|completion of the facility or facilities will occur after January 1    |
  |                                                                       |
15|of a given year, a facility may apply to claim the ad valorem tax      |
  |                                                                       |
16|exemption for that year.  If such facility is found to be qualified    |
  |                                                                       |
17|for exemption, the ad valorem tax exemption provided for herein        |
  |                                                                       |
18|shall be granted for that entire year and shall apply to the ad        |
  |                                                                       |
19|valorem valuation as of January 1 of that given year.  For             |
  |                                                                       |
20|applicants which qualify under the provisions of subparagraph b of     |
  |                                                                       |
21|paragraph 1 of subsection B of this section, the application shall     |
  |                                                                       |
22|include a copy of the affidavit and any other information required     |
  |                                                                       |
23|to be filed with the Tax Commission.                                   |
  |                                                                       |
24|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 31
___________________________________________________________________________

 1|    F.  The application shall be examined by the county assessor and   |
  |                                                                       |
 2|approved or rejected in the same manner as provided by law for         |
  |                                                                       |
 3|approval or rejection of claims for homestead exemptions.  The         |
  |                                                                       |
 4|taxpayer shall have the same right of review by and appeal from the    |
  |                                                                       |
 5|county board of equalization, in the same manner and subject to the    |
  |                                                                       |
 6|same requirements as provided by law for review and appeals            |
  |                                                                       |
 7|concerning homestead exemption claims.  Approved applications shall    |
  |                                                                       |
 8|be filed by the county assessor with the Tax Commission no later       |
  |                                                                       |
 9|than June 15, except as provided in Section 2902.1 of this title, of   |
  |                                                                       |
10|the year in which the facility desires to take the exemption.          |
  |                                                                       |
11|Incomplete applications and applications filed after June 15 will be   |
  |                                                                       |
12|declared null and void by the Tax Commission.  In the event that a     |
  |                                                                       |
13|taxpayer qualified to receive an exemption pursuant to the             |
  |                                                                       |
14|provisions of this section shall make payment of ad valorem taxes in   |
  |                                                                       |
15|excess of the amount due, the county treasurer shall have the          |
  |                                                                       |
16|authority to credit the taxpayer's real or personal property tax       |
  |                                                                       |
17|overpayment against current taxes due.  The county treasurer may       |
  |                                                                       |
18|establish a schedule of up to five (5) years of credit to resolve      |
  |                                                                       |
19|the overpayment.                                                       |
  |                                                                       |
20|    G.  Nothing herein shall in any manner affect, alter or impair     |
  |                                                                       |
21|any law relating to the assessment of property, and all property,      |
  |                                                                       |
22|real or personal, which may be entitled to exemption hereunder shall   |
  |                                                                       |
23|be valued and assessed as is other like property and as provided by    |
  |                                                                       |
24|law.  The valuation and assessment of property for which an            |
  |                                                                       |
   Req. No. 8102                                                   Page 32
___________________________________________________________________________

 1|exemption is granted hereunder shall be performed by the Tax           |
  |                                                                       |
 2|Commission using one or more of the cost, income and expense and       |
  |                                                                       |
 3|sales comparison approaches to estimate fair cash value in             |
  |                                                                       |
 4|accordance with the Uniform Standards of Professional Appraisal        |
  |                                                                       |
 5|Practice.                                                              |
  |                                                                       |
 6|    H.  The Tax Commission shall have the authority and duty to        |
  |                                                                       |
 7|prescribe forms and to promulgate rules as may be necessary to carry   |
  |                                                                       |
 8|out and administer the terms and provisions of this section.           |
  |                                                                       |
 9|    SECTION 5.  This act shall become effective November 1, 2021.      |
  |                                                                       |
10|                                                                       |
  |                                                                       |
11|    58-1-8102      JM     04/08/21                                     |
  |                                                                       |
12|                                                                       |
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13|                                                                       |
  |                                                                       |
14|                                                                       |
  |                                                                       |
15|                                                                       |
  |                                                                       |
16|                                                                       |
  |                                                                       |
17|                                                                       |
  |                                                                       |
18|                                                                       |
  |                                                                       |
19|                                                                       |
  |                                                                       |
20|                                                                       |
  |                                                                       |
21|                                                                       |
  |                                                                       |
22|                                                                       |
  |                                                                       |
23|                                                                       |
  |                                                                       |
24|                                                                       |
  |                                                                       |
   Req. No. 8102                                                   Page 33
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