1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 HOUSE BILL 3426 By: Archer
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6 AS INTRODUCED
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7 An Act relating to revenue and taxation; amending 68
7 O.S. 2021, Section 2357.42, which relates to income
8 tax credits for qualified space transportation
8 vehicle providers; modifying references to taxable
9 years; modifying definitions; and providing an
9 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 2357.42, is
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15 amended to read as follows:
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16 Section 2357.42 A. For tax years beginning after December 31,
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17 2000, and ending before January 1, 2009 2030, there shall be allowed
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18 to an investor making an eligible investment a credit against the
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19 tax imposed by Section 2355 or 2370 of this title or Section 624 or
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20 628 of Title 36 of the Oklahoma Statutes. The credit may be used in
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21 the payment of estimated tax payments for the tax imposed by Section
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22 624 or 628 of Title 36 of the Oklahoma Statutes. The credit shall
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23 be in the amount as set forth in subsection G of this section.
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 1 B. The amount of the credit shall be transferable to subsequent
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2 transferees.
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3 C. As used in this section:
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4 1. "Eligible investment" means an investment made during a
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5 period not earlier than January 1, 2001, and not later than December
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6 31, 2003 2029, in a qualified space transportation vehicle provider
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7 that:
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8 a. is headquartered in this state or is ultimately
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9 controlled by an entity headquartered in this state,
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10 or
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11 b. has been certified by the Oklahoma Tax Commission as
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12 meeting the following minimum qualifications:
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13 (1) is included within the definition of "basic
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14 industry" as set forth in division (1) of
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15 subparagraph a of paragraph 1 of subsection A of
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16 Section 3603 of this title and has been
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17 preapproved by the Oklahoma Department of
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18 Commerce to receive incentive payments pursuant
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19 to the Oklahoma Quality Jobs Program Act or the
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20 Former Military Facility Development Act. The
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21 Department shall establish a process for
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22 preapproval of applicants for the Oklahoma
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23 Quality Jobs Program Act or the Former Military
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24 Facility Development Act for purposes of this
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 1 division. The qualified space transportation
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2 vehicle provider shall agree to submit such
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3 information as may be required under this section
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4 and the Oklahoma Quality Jobs Program Act or the
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5 Former Military Facility Development Act to allow
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6 the Tax Commission to determine the amount of the
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7 tax credit allowed pursuant to the provisions of
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8 this section and the amount of incentive payments
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9 allowed pursuant to the Oklahoma Quality Jobs
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10 Program Act or the Former Military Facility
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11 Development Act for purposes of subsection K of
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12 this section,
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13 (2) has equity capitalization of not less than Ten
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14 Million Dollars ($10,000,000.00) Twenty Million
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15 Dollars ($20,000,000.00), and
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16 (3) has received a commitment by a local governmental
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17 entity, whether by contract, letter agreement,
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18 terms sheet, resolution, ordinance or indenture,
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19 to provide funds, personal property or real
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20 property in the aggregate amount of Fifteen
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21 Million Dollars ($15,000,000.00) One Million
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22 Dollars ($1,000,000.00) or more which will be
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23 utilized by one or more qualified space
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24 transportation vehicle providers. For purposes
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 1 of this division, such property may include
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2 personal or real property owned by a local
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3 governmental entity which has been leased to a
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4 state authority pursuant to a long-term lease or
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5 personal or real property which a local
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6 governmental entity has transferred to a state
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7 authority. If such property has been so
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8 transferred, the commitment required by this
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9 division may be satisfied if the state authority
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10 agrees in writing to make the property so
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11 transferred available for use by one or more
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12 qualified space transportation vehicle providers;
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13 2. "Qualified space transportation vehicle provider" means any
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14 commercial provider organized under the laws of this state as a
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15 corporation or a limited liability company and engaged in designing,
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16 developing, producing, or operating commercial space transportation
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17 vehicles in this state;
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18 3. "Space transportation vehicle" includes all types of
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19 vehicles or orbital or suborbital spacecraft, whether now in
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20 existence, developed in the future, or currently under design,
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21 development, construction, reconstruction, or reconditioning,
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22 constructed in this state and owned by a qualified space
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23 transportation vehicle provider, for the purpose of operating in, or
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24 transporting a payload to, from, or within, outer space, or in
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 1 suborbital trajectory, and includes any component of such vehicle or
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2 spacecraft not specifically designed or adapted for a payload; and
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3 4. "Subsequently refunded or returned", when used in reference
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4 to an eligible investment, means an actual redemption by the
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5 qualified space transportation vehicle provider of the securities or
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6 other indicia of ownership in the qualified space transportation
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7 vehicle provider received by the investor from the investor's
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8 investment. The failure to allow the tax credits or the recapture
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9 of the tax credits shall not affect the validity of the tax credits
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10 in the hands of a transferee of the initial investor or subsequent
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11 transferees. Provided, an investor to whom an eligible investment,
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12 or portion thereof, is subsequently refunded or returned shall
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13 reimburse the Tax Commission the amount of any credits claimed by a
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14 transferee with respect to any such amount.
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15 D. The tax credit provided for in this section shall not be
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16 allowed or, if already claimed, shall be subject to recapture as to
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17 the initial investor or investors with respect to any amount of an
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18 eligible investment made which is subsequently refunded or returned
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19 to such investor. Further, a tax credit shall not be allowed to an
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20 investor making an eligible investment in a qualified space
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21 transportation vehicle provider or shall be subject to recapture as
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22 to the initial investor or investors if previously allowed if the
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23 qualified space transportation vehicle provider in which the
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24 investment was made fails to make use of such funds or property
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 1 within three (3) years of the date the tax credit was allowed. Any
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2 recapture under this subsection shall only apply as to that part of
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3 the tax credit as is associated with the amount of the investment
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4 which is subsequently refunded or returned or which is not utilized.
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5 E. The Tax Commission shall:
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6 1. Certify, upon request of an authorized agent or
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7 representative of a qualified space transportation vehicle provider,
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8 that the qualified space transportation vehicle provider for which
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9 the certification is sought meets the qualifications prescribed by
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10 subparagraph b of paragraph 1 of subsection C of this section. The
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11 certification shall be in writing and signed by an authorized
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12 representative of the Tax Commission and, for purposes of
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13 determining qualifications of a qualified space transportation
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14 vehicle provider in which an investment may be eligible for the
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15 credit authorized by this section, shall be binding upon the Tax
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16 Commission; and
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17 2. Issue a certificate to an investor that provides adequate
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18 documentation of qualification for the credit authorized by this
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19 section even if the credit may not be claimed until after the date
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20 upon which the certificate is requested. Upon issuance, the
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21 certificate shall be evidence that an investor or a transferee of
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22 the original tax credit claimant submitting the certificate, or a
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23 certified copy thereof, with the relevant tax return or other form,
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 1 has the legal right to exercise the credit in order to reduce the
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2 relevant tax liability for the period authorized by this section.
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3 F. The maximum amount of all eligible investments for which tax
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4 credits may be claimed under this section shall be Thirty Million
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5 Dollars ($30,000,000.00). If more than one qualified space
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6 transportation vehicle provider has been certified by the Tax
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7 Commission pursuant to the provisions of subsection E of this
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8 section, the investors in the first such approved qualified space
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9 transportation vehicle provider shall be entitled to a credit based
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10 on their investment of the lesser of their eligible investment or
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11 Thirty Million Dollars ($30,000,000.00). The investors in the
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12 second such approved qualified space transportation vehicle provider
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13 shall then be entitled to a credit based on their investment of the
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14 lesser of their eligible investment or the difference between the
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15 total eligible investments in previously approved qualified space
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16 transportation vehicle providers and Thirty Million Dollars
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17 ($30,000,000.00). This same procedure will apply for all
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18 subsequently approved qualified space transportation vehicle
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19 providers. If the amount of eligible investments exceeds the amount
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20 upon which the tax credit may be claimed as provided herein,
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21 investors shall be allowed a share of the amount of the available
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22 tax credit in order of the dates of receipt of certification
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23 therefor by the Tax Commission pursuant to the provisions of
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24 paragraph 1 of subsection E of this section.
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 1 G. The amount of the tax credit allowed pursuant to the
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2 provisions of subsection A of this section shall be deemed fully
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3 earned as of the date of the investment and shall be fully
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4 redeemable as follows:
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5 Period for Which
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6 Tax Liability Determined Credit Allowed
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7 Tax year subsequent to year of
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8 eligible investment 10.6% of eligible
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9 investment
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10 Second tax year subsequent to year
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11 of eligible investment 11.236% of eligible
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12 investment
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13 Third tax year subsequent to year
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14 of eligible investment 11.910% of eligible
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15 investment
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16 Fourth tax year subsequent to year
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17 of eligible investment 12.624% of eligible
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18 investment
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19 Fifth tax year subsequent to year
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20 of eligible investment 13.381% of eligible
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21 investment
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22 H. The amount of a tax credit allowed pursuant to the
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23 provisions of this section not used in payment of taxes due in the
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24 year in which such credit is allowed pursuant to subsection G of
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 1 this section may be used as a credit against subsequent tax
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2 liability of the investor or a subsequent transferee for a period
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3 not to exceed three (3) years from the year in which such credit is
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4 originally allowed.
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5 I. The Tax Commission shall develop and issue appropriate forms
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6 and instructions to enable investors to claim the tax credit
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7 provided for in this section.
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8 J. A qualified space transportation vehicle provider in which
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9 an eligible investment qualifies for a credit authorized by this
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10 section shall maintain a record of investment made in the qualified
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11 space transportation vehicle provider for the period beginning
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12 January 1, 2001, and ending December 31, 2003 2029. The qualified
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13 space transportation vehicle provider shall notify the Tax
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14 Commission not later than January 31, 2004, of the total investment
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15 amount for such period. Any such qualified space transportation
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16 vehicle provider which refunds or returns any amount of an eligible
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17 investment to the investor shall notify the Tax Commission in
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18 writing of the amount and recipient of such refunds or returns. The
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19 Tax Commission shall compute the maximum amount of credits available
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20 pursuant to this section based upon notification of the investment
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21 amount transmitted to the Tax Commission by the qualified space
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22 transportation vehicle provider.
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23 K. A qualified space transportation vehicle provider in which
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24 eligible investments qualify for the tax credit authorized by this
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 1 section shall not receive incentive payments pursuant to the
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2 Oklahoma Quality Jobs Program Act or the Former Military Facility
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3 Development Act until the total of such incentive payments the
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4 qualified space transportation vehicle provider would otherwise
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5 receive exceeds the total amount of the credit authorized by this
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6 section as computed by the Tax Commission pursuant to subsection J
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7 of this section. The amount of incentive payments for any year
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8 which would otherwise be paid to the qualified space transportation
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9 vehicle provider shall be distributed as follows:
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10 1. If the amount of such incentive payments equals or exceeds
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11 the amount of the tax credit for the year, the amount of such
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12 payments which is equal to the amount of the tax credit shall be
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13 apportioned as if collected from the tax imposed by Section 2355 or
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14 2370 of this title or Section 624 or 628 of Title 36 of the Oklahoma
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15 Statutes according to the tax against which the credit was claimed.
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16 The amount of such payments which is in excess of the amount of the
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17 tax credit shall be retained by the Tax Commission to be paid as
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18 provided for in this paragraph for subsequent years for which the
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19 tax credit is allowed to the qualified space transportation vehicle
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20 provider;
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21 2. If the amount of such incentive payments and any amount
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22 retained by the Tax Commission pursuant to the provisions of
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23 paragraph 1 of this subsection is less tha