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1 STATE OF OKLAHOMA
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2 1st Session of the 60th Legislature (2025)
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3 SENATE BILL 470 By: Kirt
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6 AS INTRODUCED
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7 An Act relating to incentive payments; amending 68
7 O.S. 2021, Section 3604, as last amended by Section
8 157, Chapter 452, O.S.L. 2024 (68 O.S. Supp. 2024,
8 Section 3604), which relates to the Oklahoma Quality
9 Jobs Program Act; requiring establishment to provide
9 certain leave to qualify to receive incentive
10 payments; updating statutory references; updating
10 statutory language; and providing an effective date.
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13 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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14 SECTION 1. AMENDATORY 68 O.S. 2021, Section 3604, as
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15 last amended by Section 157, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
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16 2024, Section 3604), is amended to read as follows:
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17 Section 3604. A. Except as otherwise provided in subsection I
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18 or subsection L of this section, an establishment which meets the
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19 qualifications specified in the Oklahoma Quality Jobs Program Act
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20 may receive quarterly incentive payments for a ten-year period from
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21 the Oklahoma Tax Commission pursuant to the provisions of the
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22 Oklahoma Quality Jobs Program Act; provided, such an establishment
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23 defined or classified in the NAICS Manual under U.S. Industry No.
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24 711211 (2007 version) may receive quarterly incentive payments for a
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Req. No. 224 Page 1
1 thirty-year period. The amount of such payments shall be equal to
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2 the net benefit rate multiplied by the actual gross payroll of new
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3 direct jobs for a calendar quarter as verified by the Oklahoma
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4 Employment Security Commission. For an establishment defined or
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5 classified in the NAICS Manual under U.S. Industry No. 711211 (2007
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6 version) that entered into a contract pursuant to the Oklahoma
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7 Quality Jobs Program Act with the Oklahoma Department of Commerce
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8 before the effective date of this act November 1, 2023:
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9 1. The contract shall be extended from fifteen (15) years to
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10 thirty (30) years; and
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11 2. The extension shall not include additional money awarded but
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12 shall allow for payments to continue for the thirty-year period, or
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13 until the net benefit for the new direct jobs for the original
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14 contract has been fully paid out as calculated based upon the
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15 original application.
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16 B. In order to receive incentive payments, an establishment
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17 shall apply to the Oklahoma Department of Commerce. The application
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18 shall be on a form prescribed by the Department and shall contain
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19 such information as may be required by the Department to determine
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20 if the applicant is qualified. An establishment may apply for an
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21 effective date for a project, which shall not be more than twenty-
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22 four (24) months from the date the application is submitted to the
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23 Department.
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1 C. Except as otherwise provided by subsection D or E of this
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2 section, in order to qualify to receive such payments, the
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3 establishment applying shall be required to:
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4 1. Be engaged in a basic industry;
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5 2. Have an annual gross payroll for new direct jobs projected
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6 by the Oklahoma Department of Commerce to equal or exceed Two
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7 Million Five Hundred Thousand Dollars ($2,500,000.00) within three
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8 (3) years of the first complete calendar quarter following the start
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9 date; and
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10 3. Have a number of full-time-equivalent employees subject to
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11 the tax imposed by Section 2355 of this title and working an annual
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12 average of thirty (30) or more hours per week in new direct jobs
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13 located in this state equal to or in excess of eighty percent (80%)
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14 of the total number of new direct jobs; and
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15 4. For applications submitted after the effective date of this
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16 act, provide at least twelve (12) weeks of paid family leave and at
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17 least two (2) weeks of additional paid leave for new direct jobs.
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18 For the purposes of this paragraph, "paid family leave" shall
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19 include:
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20 a. all leave entitled to eligible employees as otherwise
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21 provided in the Family and Medical Leave Act of 1993,
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22 29 U.S.C., Section 2601 et seq., and
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23 b. payment for leave equal to at least one hundred
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24 percent (100%) of the employee's wage.
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1 D. In order to qualify to receive incentive payments as
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2 authorized by the Oklahoma Quality Jobs Program Act, an
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3 establishment engaged in an activity described under:
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4 1. Industry Group Nos. 3111 through 3119 of the NAICS Manual
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5 shall be required to:
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6 a. have an annual gross payroll for new direct jobs
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7 projected by the Oklahoma Department of Commerce to
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8 equal or exceed One Million Five Hundred Thousand
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9 Dollars ($1,500,000.00) within three (3) years of the
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10 first complete calendar quarter following the start
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11 date and make, or which will make within one (1) year,
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12 at least seventy-five percent (75%) of its total
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13 sales, as determined by the Incentive Approval
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14 Committee pursuant to the provisions of subsection B
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15 of Section 3603 of this title, to out-of-state
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16 customers or buyers, to in-state customers or buyers
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17 if the product or service is resold by the purchaser
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18 to an out-of-state customer or buyer for ultimate use,
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19 or to the federal government, unless the annual gross
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20 payroll equals or exceeds Two Million Five Hundred
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21 Thousand Dollars ($2,500,000.00) in which case the
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22 requirements for purchase of output provided by this
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23 subparagraph shall not apply, and
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1 b. have a number of full-time-equivalent employees
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2 working an average of thirty (30) or more hours per
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3 week in new direct jobs equal to or in excess of
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4 eighty percent (80%) of the total number of new direct
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5 jobs; and
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6 2. Division (4) of subparagraph a of paragraph 1 of subsection
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7 A of Section 3603 of this title, shall be required to:
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8 a. have an annual gross payroll for new direct jobs
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9 projected by the Oklahoma Department of Commerce to
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10 equal or exceed One Million Five Hundred Thousand
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11 Dollars ($1,500,000.00) within three (3) years of the
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12 first complete calendar quarter following the start
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13 date, and
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14 b. have a number of full-time-equivalent employees
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15 working an average of thirty (30) or more hours per
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16 week in new direct jobs equal to or in excess of
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17 eighty percent (80%) of the total number of new direct
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18 jobs.
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19 E. 1. An establishment which locates its principal business
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20 activity within a site consisting of at least ten (10) acres which:
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21 a. is a federal Superfund removal site,
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22 b. is listed on the National Priorities List established
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23 under 42 U.S.C., Section 9605 of Title 42 of the
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24 United States Code,
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1 c. has been formally deferred to the state in lieu of
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2 listing on the National Priorities List, or
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3 d. has been determined by the Department of Environmental
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4 Quality to be contaminated by any substance regulated
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5 by a federal or state statute governing environmental
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6 conditions for real property pursuant to an order of
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7 the Department of Environmental Quality,
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8 shall qualify for incentive payments irrespective of its actual
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9 gross payroll or the number of full-time-equivalent employees
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10 engaged in new direct jobs.
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11 2. In order to qualify for the incentive payments pursuant to
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12 this subsection, the establishment shall conduct the activity
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13 resulting in at least fifty percent (50%) of its Oklahoma taxable
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14 income or adjusted gross income, as determined under Section 2358 of
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15 this title, whether from the sale of products or services or both
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16 products and services, at the physical location which has been
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17 determined not to comply with the federal or state statutes
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18 described in this subsection with respect to environmental
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19 conditions for real property. The establishment shall be subject to
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20 all other requirements of the Oklahoma Quality Jobs Program Act
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21 other than the exemptions provided by this subsection.
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22 3. In order to qualify for the incentive payments pursuant to
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23 this subsection, the entity shall obtain from the Department of
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24 Environmental Quality a letter of concurrence that:
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1 a. the site designated by the entity does meet one or
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2 more of the requirements listed in paragraph 1 of this
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3 subsection, and
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4 b. the site is being or has been remediated to a level
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5 which is consistent with the intended use of the
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6 property.
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7 In making its determination, the Department of Environmental
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8 Quality may rely on existing data and information available to it,
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9 but may also require the applying entity to provide additional data
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10 and information, as necessary.
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11 4. If authorized by the Department of Environmental Quality
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12 pursuant to paragraph 3 of this subsection, the entity may utilize a
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13 remediated portion of the property for its intended purpose prior to
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14 remediation of the remainder of the site, and shall qualify for
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15 incentive payments based on employment associated with the portion
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16 of the site.
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17 F. Except as otherwise provided by subsection G of this
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18 section, for applications submitted on and after June 4, 2003, in
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19 order to qualify to receive incentive payments as authorized by the
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20 Oklahoma Quality Jobs Program Act, in addition to other
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21 qualifications specified herein, an establishment shall be required
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22 to pay new direct jobs an average annualized wage which equals or
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23 exceeds:
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1 1. One hundred ten percent (110%) of the average county wage as
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2 determined by the Oklahoma Department of Commerce based on the most
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3 recent U.S. Department of Commerce data for the county in which the
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4 new direct jobs are located. For purposes of this paragraph, health
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5 care premiums paid by the applicant for individuals in new direct
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6 jobs shall be included in the annualized wage; or
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7 2. One hundred percent (100%) of the average county wage as
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8 that percentage is determined by the Oklahoma Department of Commerce
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9 based upon the most recent U.S. Department of Commerce data for the
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10 county in which the new jobs are located. For purposes of this
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11 paragraph, health care premiums paid by the applicant for
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12 individuals in new direct jobs shall not be included in the
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13 annualized wage.
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14 Provided, no average wage requirement shall exceed Twenty-five
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15 Thousand Dollars ($25,000.00), in any county. This maximum wage
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16 threshold shall be indexed and modified from time to time based on
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17 the latest Consumer Price Index year-to-date percent change release
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18 as of the date of the annual average county wage data release from
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19 the Bureau of Economic Analysis of the U.S. Department of Commerce.
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20 G. 1. As used in this subsection, "opportunity zone" means one
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21 or more census tracts in which, according to the most recent Federal
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22 Decennial Census, at least thirty percent (30%) of the residents
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23 have annual gross household incomes from all sources below the
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24 poverty guidelines established by the U.S. Department of Health and
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1 Human Services. An establishment which is otherwise qualified to
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2 receive incentive payments and which locates its principal business
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3 activity in an opportunity zone shall not be subject to the
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4 requirements of subsection F of this section.
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5 2. As used in this subsection:
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6 a. "negative economic event" means:
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7 (1) a man-made disaster or natural disaster as
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8 defined in Section 683.3 of Title 63 of the
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9 Oklahoma Statutes, resulting in the loss of a
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10 significant number of jobs within a particular
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11 county of this state, or
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12 (2) an economic circumstance in which a significant
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13 number of jobs within a particular county of this
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14 state have been lost due to an establishment
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15 changing its structure, consolidating with
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16 another establishment, closing or moving all or
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17 part of its operations out of this state, and
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18 b. "significant number of jobs" means Local Area
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19 Unemployment Statistics (LAUS) data, as determined by
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20 the Bureau of Labor Statistics, for a county which are
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21 equal to or in excess of five percent (5%) of the
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22 total amount of Local Area Unemployment Statistics
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23 (LAUS) data for that county for the calendar year, or
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1 most recent twelve-month period in which employment is
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2 measured, preceding the event.
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3 An establishment which is otherwise qualified to receive
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4 incentive payments and which locates in a county in which a negative
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5 economic event has occurred within the eighteen-month period
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6 preceding the start date shall not be subject to the requirements of
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7 subsection F of this section; provided, an establishment shall not
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8 be eligible to receive incentive payments based upon a negative
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9 economic event with respect to jobs that are transferred from one
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10 county of this state to another.
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11 H. The Oklahoma Department of Commerce shall determine if the
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12 applicant is qualified to receive incentive payments.
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13 I. If the applicant is determined to be qualified by the
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14 Oklahoma Department of Commerce and is not subject to the provisions
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15 of subparagraph d of paragraph 7 of subsection A of Section 3603 of
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16 this title, the Department shall conduct a cost/benefit analysis to
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17 determine the estimated net direct state benefits and the net
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18 benefit rate applicable for a ten-year period beginning with the
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19 first complete calendar quarter following the start date and to
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20 estimate the amount of gross payroll for a ten-year period beginning
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21 with the first complete calendar quarter following the start date or
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22 for a thirty-year period for an establishment defined or classified
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23 in the NAICS Manual under U.S. Industry No. 711211 (2007 version).
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24 In conducting such cost/benefit analysis, the Department shall
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1 consider quantitative factors, such as the anticipated level of new
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2 tax revenues to the state along with the added cost to the state of
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3 providing services, and such other criteria as deemed appropriate by
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4 the Department. In no event shall incentive payments, cumulatively,
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5 exceed the estimated net direct state benefits, except for
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6 applicants subject to the provisions of subparagraph d of paragraph
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7 7 of subsection A of Section 3603 of this title.
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8 J. Upon approval of such an application, the Oklahoma
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9 Department of Commerce shall notify the Tax Commission and shall
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10 provide it with a copy of the contract and the results of the
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11 cost/benefit analysis. The Tax Commission may require the qualified
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12 establishment to submit such additional information as may be
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13 necessary to administer the provisions of the Oklahoma Quality Jobs
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14 Program Act. The approved establishment shall file quarterly claims
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15 with the Tax Commission and shall continue to file such quarterly
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16 claims during the ten-year incentive period to show its continued
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17 eligibility for incentive payments, as provided in Section 3606 of
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18 this title, or until it is no longer qualified to receive incentive
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19 payments. The establishment may be audited by the Tax Commission to
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20 verify such eligibility. Once the establishment is approved, an
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21 agreement shall be deemed to exist between the establishment and the
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22 State of Oklahoma, requiring the continued incentive payment to be
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23 made as long as the establishment retains its eligibility as defined
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24 in and established pursuant to this section and Sections 3603 and
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1 3606 of this title and within the limitations contained in the
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2 Oklahoma Quality Jobs Program Act, which existed at the time of such
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3 approval. An establishment described in this subsection shall be
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4 required to repay all incentive payments received under the Oklahoma
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5 Quality Jobs Program Act if the establishment is determined by the
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6 Oklahoma Tax Commission to no longer have business operations in the
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7 state within three (3) years from the beginning of the calendar
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8 quarter for which the first incentive payment claim is filed.
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9 K. A municipality with a population of less than one hundred
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10 thousand (100,000) persons in which an establishment eligible to
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11 receive quarterly incentive payments pursuant to the provisions of
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12 this section is located may file a claim with the Tax Commission for
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13 up to twenty-five percent (25%) of the amount of such payment. The
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14 amount of such claim shall not exceed amounts paid by the
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15 municipality for direct costs of municipal infrastructure
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16 improvements to provide water and sewer service to the
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17 establishment. Such claim shall not be approved by the Tax
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18 Commission unless the municipality and the establishment have
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19 entered into a written agreement for such claims to be filed by the
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20 municipality prior to submission of the application of the
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21 establishment pursuant to the provisions of this section. If such
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22 claim is approved, the amount of the payment to the establishment
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23 made pursuant to the provisions of Section 3606 of this title shall
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24 be reduced by the amount of the approved claim by the municipality
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1 and the Tax Commission shall issue a warrant to the municipality in
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2 the amount of the approved claim in the same manner as warrants are
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3 issued to qualifying establishments.
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4 L. For any contract executed by an establishment on or after
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5 August 2, 2018, five percent (5%) of the quarterly incentive payment
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6 amount shall be transferred by the Oklahoma Tax Commission to the
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7 Oklahoma Quick Action Closing Fund.
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8 SECTION 2. This act shall become effective November 1, 2025.
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10 60-1-224 QD 1/19/2025 5:37:03 AM
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Req. No. 224 Page 13Every fact on this page links to its source, starting with the official bill record.