2023 Oklahoma Statutes › Title 62. Public Finance › §62-891.18. Local government entity to obtain a determination letter – Positive net benefit rate – Withholding taxes.

A. As used in this section:
1. "Estimated direct state benefits" means the tax revenues projected by the Oklahoma Department of Commerce to accrue to the state as a result of new direct jobs and capital spending associated with one or more for-profit business entities, federal government defense entities and infrastructure development by one or more local government entities;
2. "Estimated indirect state benefits" means the indirect new tax revenues projected by the Department to accrue to the state including, but not limit to, revenue generated from ancillary support jobs directly related to the new direct jobs, capital spending and infrastructure spending;
3. "Estimated direct state costs" means the costs projected by the Department to accrue to the state as a result of new direct jobs. The costs shall include, but not be limited to:
a.
the costs of education for new state resident children,
b.
the costs of public health, public safety and transportation services to be provided to new state residents,
c.
the costs of other state services to be provided to new state residents, and
d.
the costs of other state services; and
4. "Estimated indirect state costs" means the costs projected by the Department to accrue to the state as a result on new indirect jobs. The costs shall include, but not be limited to, costs enumerated in subparagraphs a, b, c and d of paragraph 3 of this subsection.
B. An eligible local government entity in partnership with one or more for-profit business entities and/or federal government defense entities that would otherwise qualify to receive or benefit from proceeds from the issuance of obligations by the Authority from the Public-Private Partner Development Pool shall be required to obtain a determination letter from the Department that the infrastructure development will result in a positive net benefit rate, to be computed by the Department using a methodology which provides for the analysis of estimated direct state benefits, estimated indirect state benefits, estimated direct state costs and estimated indirect state costs. The Department shall use such information as it determines to be relevant for the analysis required by this subsection including, but not limited to, the type of infrastructure development, the business activities in which the participating for-profit business entities are engaged or will be engaged, the amount of capital investment, type of assets acquired or utilized by the participating business entities, economic effect of the business activity within the relevant geographic region and any other factors as the Department deems relevant. The Department may use information regarding the infrastructure development alone or in conjunction with relevant information regarding other business activity in a geographically relevant area surrounding the infrastructure development or the location of the participating for-profit business entities in order to perform the computation of the net benefit rate. If the result of the analysis is a positive net benefit rate, the applying local government entity shall be allowed to capture withholding taxes associated with new jobs or with existing jobs associated with the participating for-profit business entities as otherwise provided by this act. The Department shall transmit a determination letter to the authorized representative of the local government entity and shall also transmit a copy of the determination letter to the Oklahoma Tax Commission and to the Oklahoma Development Finance Authority notwithstanding the positive or negative result of the net benefit rate. The Authority shall not allow a local government entity to use captured withholding tax revenues for purposes of any pooled financing otherwise authorized by this act unless the Department has previously transmitted a determination letter that reveals a positive net benefit rate for the Public-Private Partner Development Pool project.
C. Any for-profit business entity that participates in the Public-Private Partner Development Pool may be required by the applicable local government entity to enter into such agreements as may be required between the entity, the local government entity, the Authority and the Oklahoma Tax Commission to provide for the segregation of withholding taxes.
D. The amount of withholding taxes subject to the provisions of this section shall, together with other revenue sources or commitments and undertakings by the for-profit business entity or third parties, be sufficient to make payment of any required principal, interest, adequate reserves or other authorized costs for borrowing by the Authority.
E. The Authority shall have the power of approval regarding the amount and duration of withholding tax segregation pursuant to the provisions of this section in order to ensure payment of its obligations and to promote the marketability of such obligations.
F. The Authority shall obtain information from the participating for-profit business entities as may be required in order to determine the necessary amount of segregated withholding taxes attributable to new direct jobs or existing payroll.
G. The Oklahoma Tax Commission shall determine with respect to the withholding taxes attributable to the income of employees engaged in new direct jobs or existing jobs for one or more for-profit business entities participating in a pooled financing pursuant to the Oklahoma Community Economic Development Pooled Finance Act the amount of such withholding taxes required to be deposited to the credit of the Community Economic Development Pooled Finance Revolving Fund.
H. The Oklahoma Tax Commission shall make a deposit in the Community Economic Development Pooled Finance Revolving Fund in accordance with any applicable agreement entered into with one or more eligible local government entities in conjunction with participating for-profit business entities participating in a pooled financing pursuant to the Oklahoma Community Economic Development Pooled Finance Act.
I. No for-profit business entity that participates from proceeds of obligations issued by the Authority from the Public-Private Partner Development Pool may receive or continue to receive incentive payments pursuant to the Economic Development Pool, the Oklahoma Quality Jobs Program Act or claim any investment tax credits otherwise authorized pursuant to Section 2357.4 of Title 68 of the Oklahoma Statutes during the period of time that any withholding taxes attributable to the payroll of such entity are being paid to the Community Economic Development Pooled Finance Revolving Fund or in any manner used for the payment of principal, interest or other costs associated with any obligations issued by the Authority pursuant to the provisions of the act.
Added by Laws 2019, c. 260, § 5, eff. Nov. 1, 2019.