Oklahoma HB 4085: Revenue and taxation; creating Rural Jobs Act; tax credit; investment; ownership; reporting; effective date.

Bill Text

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STATE OF OKLAHOMA 
 
2nd Session of the 58th Legislature (2022) 
 
COMMITTEE SUBSTITUTE 
FOR ENGROSSED 
HOUSE BILL NO. 4085 By: Wallace and Dempsey of the 
House 
 
   and 
 
  Howard of the Senate 
 
 
 
 
COMMITTEE SUBSTITUTE 
 
An Act relating to revenue and taxation; creating the 
Oklahoma Rural Jobs Act; defining terms; establishing 
requirements; establishing application process; 
providing for a tax credit; establishing an 
authorization amount limit; establishing investment 
requirements; allowing for lapse in certification 
creating a credit; allowing for transfer of credit; 
allowing for recapturing of credits; determining how 
recaptured credits are to be allocated; creating a 
program exit process; creating ownership limitations; 
creating reporting requirements; establishing a 
sunset date; providing for codification; and 
providing an effective date. 
 
 
 
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: 
SECTION 1.     NEW LAW     A new section of law to be codified 
in the Oklahoma Statutes as Section 3930 of Title 68, unless there 
is created a duplication in numbering, reads as follows: 
This act shall be known and may be cited as the "Oklahoma Rural 
Jobs Act". 

 
 
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SECTION 2.     NEW LAW     A new section of law to be codified 
in the Oklahoma Statutes as Section 3931 of Title 68, unless there 
is created a duplication in numbering, reads as follows: 
As used in this act: 
1.  "Affiliate" means an entity that directly, or indirectly 
through one or more intermediaries, controls, or is controlled by, 
or is under the common control with another entity.  An entity is 
controlled by another entity if the controlling entity holds, 
directly or indirectly, the majority of voting or ownership interest 
in the controlled entity or has control over day-to-day operations 
of the controlled entity by contract or by law; 
2.  "Applicable percentage" means zero percent (0%) for the 
first two credit allowance dates, and fifteen percent (15%) for the 
next four credit allowance dates; 
3.  "Capital investment" means any equity investment in a rural 
fund by a rural investor which: 
a. is acquired after the effective date of this act at 
its original issuance solely in exchange for cash, 
b. has one hundred percent (100%) of its cash purchase 
price used by the rural fund to make qualified 
investments in eligible businesses located in this 
state by the third anniversary of the initial credit 
allowance date, and 

 
 
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c. is designated by the rural fund as a capital 
investment under this act and is certified by the 
Department under the provisions of Section 3 of this 
act.  This shall include any capital investment that 
does not meet the provisions of paragraph 1 of 
subsection A of Section 3 of this act, if such 
investment was a capital investment in the hands of a 
prior holder; 
4.  "Credit allowance date" means the date on which the 
Department certifies a rural fund's capital investment and each of 
the five anniversary dates of such date thereafter; 
5.  "Department" means the Oklahoma Department of Commerce; 
6.  "Eligible business" means a business that, at the time of 
the initial qualified investment in the business: 
a. has fewer than two hundred fifty employees, and 
b. has its principal business operations in the state. 
Any business which is classified as an eligible business at the 
time of the initial investment in such business by a rural fund 
shall remain classified as an eligible business and may receive 
follow-on investments from any rural fund, and such follow-on 
investments shall be qualified investments even though such business 
may not meet the definition of an eligible business at the time of 
such follow-on investment; 

 
 
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7.  "Principal business operations" means the location where at 
least sixty percent (60%) of a business's employees work or where 
employees who are paid at least sixty percent (60%) of such 
business's payroll work.  A business that has agreed to relocate 
employees using the proceeds of a qualified investment to establish 
its principal business operations in a new location shall be deemed 
to have its principal business operations in such new location if it 
satisfied the requirements of this paragraph no later than one 
hundred eighty (180) days after receiving a qualified investment; 
8.  "Purchase price" means the amount paid to the rural fund 
that issues a capital investment which shall not exceed the amount 
of capital investment authority certified under the provisions of 
Section 3 of