Okla. Stat. tit. 68, § 68-2357.28

A. For tax years beginning after December 31, 1999, and ending

before January 1, 2006, there shall be allowed to an investor making

an eligible investment a credit against the tax imposed by Section

2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma

Statutes. The credit may be used in the payment of estimated tax

payments for the tax imposed by Section 624 or 628 of Title 36 of

the Oklahoma Statutes. The credit shall be in the amount as set

forth in subsection F or subsection G of this section.

B. The amount of the credit shall be freely transferable to

subsequent transferees.

C. As used in this section:

1. “Capitalization commitment” means a commitment by a local

governmental entity or the beneficiary thereof or a private entity,

whether by contract, letter agreement, terms sheet, resolution,

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ordinance or indenture, to provide funds, personal property or real

property. “Capitalization commitment” shall also mean, in

circumstances limited to local governmental entities or the

beneficiaries thereof, a moral obligation to provide future funds,

personal property or real property. To provide funds, personal

property or real property shall include but not be limited to

providing funds, personal property or real property in the form of

security or collateral to a financial lending institution in support

of a revenue bond, financial obligation or other evidence of

indebtedness issued by a local governmental entity;

2. “Consideration” means, but is not limited to, funds,

personal property or real property and a capitalization commitment.

The source of the funds or other consideration for the investment by

one or more investors, whether borrowed or otherwise, is irrelevant

to the determination of investment. The fact that the source of

funds is from a financial lending institution is also irrelevant;

3. “Eligible investment” means an investment made during a

period not earlier than January 1, 1999, and not later than December

31, 2002, in an establishment that:

a. is headquartered in this state or is ultimately

controlled by an entity headquartered in this state,

and

b. has been certified by the Tax Commission as meeting

the following minimum qualifications:

(1) is included within the definition of “basic

industry” as set forth in division (7) of

subparagraph a of paragraph 1 of subsection A of

Section 3603 of this title and has been

preapproved by the Oklahoma Department of

Commerce to receive incentive payments pursuant

to the Oklahoma Quality Jobs Program Act. The

Department shall establish a process for

preapproval of applicants for the Oklahoma

Quality Jobs Program Act for purposes of this

division. The establishment shall agree to

submit such information as may be required under

this section and the Oklahoma Quality Jobs

Program Act to allow the Tax Commission to

determine the amount of the tax credit allowed

pursuant to the provisions of this section and

the amount of incentive payments allowed pursuant

to the Oklahoma Quality Jobs Program Act for

purposes of subsection K of this section,

(2) can demonstrate commitments from not fewer than

twenty entities doing business in this state,

with such entities having in the aggregate not

fewer than two thousand (2,000) employees in this

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state, to utilize the services of the

establishment in providing nonstop air

transportation from this state to either the west

coast or the east coast of the continental United

States, or both. Such commitments, at a minimum,

may be in the form of letters of intent from

authorized officers of such entities which

demonstrate a best efforts intention to utilize

such air transportation, and
state, to utilize the services of the

establishment in providing nonstop air

transportation from this state to either the west

coast or the east coast of the continental United

States, or both. Such commitments, at a minimum,

may be in the form of letters of intent from

authorized officers of such entities which

demonstrate a best efforts intention to utilize

such air transportation, and

(3) has received, or its parent has received, in

calendar year 2000, a capitalization commitment

in the amount of Fifteen Million Dollars

($15,000,000.00) or more from a local

governmental entity, including, but not limited

to, proceeds from the issuance of revenue bonds,

financial obligations or other evidences of

indebtedness. For purposes of this section and

notwithstanding the provisions of Section 5063.4

of Title 74 of the Oklahoma Statutes or any other

laws to the contrary, credit enhancement by the

Oklahoma Development Finance Authority through

the Oklahoma Credit Enhancement Reserve Fund up

to a maximum of Ten Million Dollars

($10,000,000.00) is hereby authorized, subject to

the approval of the Executive and Legislative

Bond Oversight Commissions pursuant to Section

695.8 of Title 62 of the Oklahoma Statutes.

The tax credit provided for in this section shall not be allowed

or, if already claimed, shall be subject to recapture as to the

initial investor or investors, with respect to any amount of an

eligible investment made which is subsequently refunded or returned

to any such investor. Any such recapture shall only apply as to

that part of the tax credit as is associated with the investment

refunded or returned.

Nothing in this subsection is intended to preclude an

establishment from utilizing a wholly owned operating subsidiary to

perform its flight and related operations to meet the requirements

of this subsection;

4. “Financial lending institution” means a bank, credit union,

savings and loan association, commercial finance company,

governmental agency, including a local governmental entity, or other

entity principally engaged in investment, finance or the extension

of credit;

5. “Investment” means:

a. consideration in exchange for “equity and near-

equity”, which means common stock, preferred stock,

warrants or other rights to subscribe to stock or its

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equivalent, or an interest in a partnership, or debt

that is convertible into or entitles the holder to

receive upon its exercise, common stock, preferred

stock, royalty interest, or an interest in a

partnership,

b. consideration in exchange for “subordinated debt”,

which means indebtedness that is subordinated to other

indebtedness of the issuer that has been issued or is

to be issued by a financial lending institution, or

c. in the event of a capitalization commitment in

accordance with the provisions of division (3) of

subparagraph b of paragraph 3 of this subsection,

where a local governmental entity is issuing revenue

bonds, financial obligations or other evidences of

indebtedness, the receipt of the proceeds of revenue

bonds, financial obligations or other evidences of

indebtedness issued by a local governmental entity by

a parent and the subsequent transfer of such proceeds

to a subsidiary.

Actions of the establishment to use such investment as security for

indebtedness, even as security for that of another party, or other

uses, in compliance with loan covenants as may be part of the

issuance of revenue bonds, financial obligations or other evidences

of indebtedness, shall not affect its determination as investment.

For purposes of this section, investment in an establishment which

has, prior to February 1, 2002, been certified as an eligible

establishment by the Oklahoma Tax Commission shall be treated as an

eligible investment in such establishment for the purposes of this

section with respect to investment made at any time prior to
es

of indebtedness, shall not affect its determination as investment.

For purposes of this section, investment in an establishment which

has, prior to February 1, 2002, been certified as an eligible

establishment by the Oklahoma Tax Commission shall be treated as an

eligible investment in such establishment for the purposes of this

section with respect to investment made at any time prior to

December 31, 2002;

6. “Investor” means one or more persons or entities making an

investment and may include one or more persons or entities which

wholly or partially own the establishment;

7. “Local governmental entity” includes, but is not limited to,

a county, municipality or public authority or trust created pursuant

to the provisions of Title 60 of the Oklahoma Statutes of which the

state or a county or municipality or combination thereof, is a

beneficiary, or a state public authority or trust;

8. “Parent” means an entity owning fifty-one percent (51%) or

more of the establishment and providing fifty-one percent (51%) or

more of the investment in the establishment; and

9. “Subsequently refunded or returned”, when used in reference

to an eligible investment, means an actual redemption by the

establishment of the securities or other indicia of ownership in the

establishment received by the investor from the investor’s

investment. The failure to allow the tax credits or the recapture

of the tax credits shall not affect the validity of the tax credits

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in the hands of a transferee of the initial investor or subsequent

transferees. Provided, an investor to whom an eligible investment,

or portion thereof, is subsequently refunded or returned shall

reimburse the Tax Commission the amount of any credits claimed by a

transferee with respect to any such amount.

D. The Oklahoma Tax Commission shall:

1. Certify, upon request of an authorized agent or

representative of an establishment described by paragraph 3 of

subsection C of this section, that the establishment for which the

certification is sought meets the qualifications prescribed by

subparagraphs a and b of paragraph 3 of subsection C of this

section. The certification shall be in writing and signed by an

authorized representative of the Tax Commission and, for purposes of

determining qualifications of an establishment in which an

investment may be eligible for the credit authorized by this

section, shall be binding upon the Tax Commission; and

2. Issue a certificate to an investor that provides adequate

documentation of qualification for the credit authorized by this

section even if the credit may not be claimed until after the date

upon which the certificate is requested. Upon issuance, the

certificate shall be evidence that an investor or a transferee of

the original tax credit claimant submitting the certificate, or a

certified copy thereof, with the relevant tax return or other form,

has the legal right to exercise the credit in order to reduce the

relevant tax liability for the period authorized by this section.

E. Except as otherwise provided by subsection G of this

section, the maximum amount of all eligible investments for which

tax credits may be claimed under this section shall be Thirty

Million Dollars ($30,000,000.00). If more than one establishment

has been certified by the Tax Commission pursuant to the provisions

of subsection D of this section, the investors in the first such

approved establishment shall be entitled to a credit based on their

investment of the lesser of their eligible investment or Thirty

Million Dollars ($30,000,000.00). The investors in the second such

approved establishment shall then be entitled to a credit based on

their investment of the lesser of their eligible investment or the

difference between the total eligible investments in previously

approved establishments and Thirty Million Dollars ($30,000,000.00).
vestment of the lesser of their eligible investment or Thirty

Million Dollars ($30,000,000.00). The investors in the second such

approved establishment shall then be entitled to a credit based on

their investment of the lesser of their eligible investment or the

difference between the total eligible investments in previously

approved establishments and Thirty Million Dollars ($30,000,000.00).

This same procedure will apply for all subsequently approved

establishments. If the amount of eligible investments exceeds the

amount upon which the tax credit may be claimed as provided herein,

investors shall be allowed a share of the amount of the available

tax credit in order of the dates of receipt of certification

therefor by the Tax Commission pursuant to the provisions of

paragraph 1 of subsection D of this section.

F. Except as otherwise provided by subsection G of this

section, the amount of the tax credit allowed pursuant to the

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provisions of subsection A of this section shall be deemed fully

earned as of the date of the investment and shall be fully

redeemable as follows:

Period for Which

Tax Liability Determined Credit Allowed

Tax year subsequent to year

of eligible investment 10.6% of eligible

investment

Second tax year subsequent to

year of eligible investment 11.236% of eligible

investment

Third tax year subsequent to

year of eligible investment 11.910% of eligible

investment

Fourth tax year subsequent to

year of eligible investment 12.624% of eligible

investment

Fifth tax year subsequent to

year of eligible investment 13.381% of eligible

investment

G. An investor or investors in an establishment that has been

approved for eligible investment before February 1, 2002, pursuant

to this section may receive tax credits for additional eligible

investment in such establishment during the period February 1, 2002,

to December 31, 2002. The maximum amount of such additional tax

credits shall be Nine Million Dollars ($9,000,000.00) with One

Dollar ($1.00) of tax credit for each dollar of eligible investment.

The tax credits authorized by this subsection may not be used as to

any tax obligation that is due and payable before July 1, 2003. For

the fiscal year that begins July 1, 2003, and the fiscal years that

begin July 1, 2004, and July 1, 2005, the amount of tax credits

authorized by this subsection which may be used during each such

fiscal year shall not exceed Three Million Dollars ($3,000,000.00).

H. The amount of a tax credit allowed pursuant to the

provisions of this section not used in payment of taxes due in the

year in which such credit is allowed pursuant to subsection F or

subsection G of this section may be used as a credit against

subsequent tax liability of the investor or a subsequent transferee

for a period not to exceed three (3) years from the year in which

such credit is originally allowed.

I. The Tax Commission shall develop and issue appropriate forms

and instructions to enable investors to claim the tax credit

provided for in this section.

J. An establishment in which an eligible investment qualifies

for a credit authorized by this section shall maintain a record of

investment made in the establishment for the period beginning

January 1, 1999, and ending December 31, 2002. The establishment

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shall notify the Tax Commission not later than January 31, 2003, of

the total investment amount for such period. Any such establishment

which refunds or returns any amount of an eligible investment to the

investor shall notify the Tax Commission in writing of the amount

and recipient of such refunds or returns. The Tax Commission shall

compute the maximum amount of credits available pursuant to this

section based upon notification of the investment amount transmitted

to the Tax Commission by the establishment.
establishment

which refunds or returns any amount of an eligible investment to the

investor shall notify the Tax Commission in writing of the amount

and recipient of such refunds or returns. The Tax Commission shall

compute the maximum amount of credits available pursuant to this

section based upon notification of the investment amount transmitted

to the Tax Commission by the establishment.

K. An establishment in which eligible investments qualify for

the tax credit authorized by this section shall not receive

incentive payments pursuant to the Oklahoma Quality Jobs Program Act

until the total of such incentive payments the establishment would

otherwise receive exceeds the total amount of the credit authorized

by this section as computed by the Tax Commission pursuant to

subsection J of this section. The amount of incentive payments for

any year which would otherwise be paid to the establishment shall be

distributed as follows:

1. If the amount of such incentive payments equals or exceeds

the amount of the tax credit for the year, the amount of such

payments which is equal to the amount of the tax credit shall be

apportioned as if collected from the tax imposed by Section 2355 of

this title or Section 624 or 628 of Title 36 of the Oklahoma

Statutes according to which tax the credit was claimed against. The

amount of such payments which is in excess of the amount of the tax

credit shall be retained by the Tax Commission to be paid as

provided for in this paragraph for subsequent years for which the

tax credit is allowed to the establishment;

2. If the amount of such incentive payments and any amount

retained by the Tax Commission pursuant to the provisions of

paragraph 1 of this subsection is less than the amount of the tax

credit for the year, notwithstanding the provisions of Section 1727

of Title 69 of the Oklahoma Statutes, the Tax Commission shall

withhold a portion of the taxes levied and collected pursuant to the

provisions of paragraph 1 of subsection A of Section 500.4 of this

title which would otherwise be paid over to the Department of

Transportation by the Oklahoma Turnpike Authority pursuant to the

provisions of paragraph (2) of subsection (d) of Section 1730 of

Title 69 of the Oklahoma Statutes equal to the amount of the

deficit. The Tax Commission shall apportion all funds collected

pursuant to the provisions of this paragraph as if collected from

the tax imposed by Section 2355 of this title or Section 624 or 628

of Title 36 of the Oklahoma Statutes according to the tax against

which the credit was claimed; and

3. If any amount is withheld by or paid to the Tax Commission

pursuant to the provisions of paragraph 2 of this subsection, the

amount of incentive payments to be subsequently paid to the

establishment shall be apportioned by the Tax Commission to the

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Department of Transportation until such time as all amounts paid

pursuant to the provisions of paragraph 2 of this subsection are

repaid.

L. No establishment in which investments qualify for the credit

allowed by this section shall be entitled to payment of any

incentive payments accrued prior to the date authorized for the

initial eligible investments as provided by this subsection.

M. Notwithstanding the provisions of this section, an

establishment may, prior to the issuance of a tax credit with

respect to the establishment pursuant to the provisions of this

section, elect to receive incentive payments pursuant to the

provisions of the Oklahoma Quality Jobs Program Act in lieu of

allowing the tax credit provided for herein, in which case it shall

so notify the Tax Commission in writing and the provisions of this

section shall not be applicable.

N. Except as provided by subsection M of this section, no

establishment defined by this section which would otherwise qualify
ve incentive payments pursuant to the

provisions of the Oklahoma Quality Jobs Program Act in lieu of

allowing the tax credit provided for herein, in which case it shall

so notify the Tax Commission in writing and the provisions of this

section shall not be applicable.

N. Except as provided by subsection M of this section, no

establishment defined by this section which would otherwise qualify

for incentive payments pursuant to the provisions of the Oklahoma

Quality Jobs Program Act may receive such incentive payments prior

to January 1, 2001.

O. No establishment defined by this section which has made

application to the Oklahoma Department of Commerce or which has

executed any agreement with the Oklahoma Department of Commerce with

respect to the receipt of incentive payments pursuant to the

provisions of the Oklahoma Quality Jobs Program Act or which has

received any incentive payment pursuant to the Oklahoma Quality Jobs

Program Act prior to June 9, 1999, may be certified as an

establishment for purposes of determining eligibility for the credit

authorized by this section.