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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
HOUSE BILL 3978 By: Caldwell (Trey) of the
House
and
Howard of the Senate
AS INTRODUCED
[ Oklahoma Rural Jobs Act – definitions - qualified
investment - capital investment - updating
references - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 2, Chapter 354, O.S.L.
2022 (68 O.S. Supp. 2025, Section 3931), is amended to read as
follows:
Section 3931. 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
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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
November 1, 2022 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
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 3932 of
this act title. This shall include any capital
investment that does not meet the provisions of
paragraph 1 of subsection A of Section 3 3932 of this
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act title, 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;
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
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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 3932 of this act title;
9. "Qualified investment" means any investment in an eligible
business or any loan to an eligible business with a stated maturity
date of at least one (1) year after the date of issuance, excluding
revolving lines of credit and senior-secured debt unless the chief
executive or similar officer of the eligible business certifies that
the eligible business sought and was denied similar financing from a
depository institution, by a rural fund; provided that, with respect
to any one eligible business, the maximum amount of investments made
in such business by one or more rural funds, on a collective basis
with all of the businesses' affiliates, with the proceeds of the
capital investments, shall be the greater of twenty percent (20%) of
the rural fund's capital investment authority or Six Million Five
Hundred Thousand Dollars ($6,500,000.00), and such limitation shall
apply separately to investments made by a rural fund receiving
certification prior to the effective date of this act and to
investments made by a rural fund certified on or after the effective
date of this act, exclusive of investments made with repaid or
redeemed investments or interest or profits realized thereon. No
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eligible business shall refinance, directly or indirectly, any
qualified investment made prior to the effective date of this act
with funds derived from capital investments certified on or after
such effective date;
10. "Rural area" means any county of this state that has a
population of less than seventy-five thousand (75,000) or any city
or town of this state that has a population not to exceed seven
thousand (7,000) according to the 2020 Federal Decennial Census of
the United States;
11. "Rural fund" means an entity certified by the Department
under the provisions of Section 3 3932 of this act title;
12. "Rural investor" means an entity that makes a capital
investment in a rural fund;
13. "Senior-secured debt" means any loan that is secured by a
first mortgage on real estate with a loan-to-value ratio of less
than eighty percent (80%); and
14. "State tax liability" means the tax imposed under Section
2355, 2355.1P-4, or 2370 of Title 68 of the Oklahoma Statutes this
title or Section 624 or 628 of Title 36 of the Oklahoma Statutes.
An insurance company claiming a credit against state premium tax or
retaliatory tax or any other tax imposed by Section 624 or 628 of
Title 36 of the Oklahoma Statutes shall not be required to pay any
additional retaliatory tax under Section 628 of Title 36 of the
Oklahoma Statutes as a result of claiming the credit. The credit
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may fully offset any retaliatory tax imposed by Section 628 of Title
36 of the Oklahoma Statutes.
SECTION 2. AMENDATORY Section 4, Chapter 354, O.S.L.
2022 (68 O.S. Supp. 2025, Section 3933), is amended to read as
follows:
Section 3933. A. The Department shall certify capital
investment authority under the provisions of this act the Oklahoma
Rural Jobs Act in amounts that would not authorize more than Fifteen
Million Dollars ($15,000,000.00) in state tax credits to be claimed
against state tax liability in any calendar year for applications
approved prior to the effective date of this act and Fifteen Million
Dollars ($15,000,000.00) in state tax credits to be claimed against
state tax liability in any calendar year for applications approved
on or before the effective date of this act, excluding any credit
amounts carried forward as provided under subsection A of Section 5
of this act Section 3934 of this title. A rural fund receiving
certification for an application approved prior to the effective
date of this act shall be eligible to receive certification on an
application submitted after the effective date of this act. Within
ninety (90) days of the applicant receiving notice of certification,
the rural fund shall issue the capital investment to and receive
cash in the amount of the certified amount from a rural investor.
At least ten percent (10%) of the rural investor's capital
investment shall be composed of capital raised by the rural investor
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directly or indirectly from sources including directors, members,
employees, officers, and affiliates of the rural investor, other
than the amount invested by the allocatee claiming the tax credits
in exchange for such allocation of tax credits. The rural fund
shall provide the Department with evidence of the receipt of the
cash investment within ninety-five (95) days of the applicant
receiving notice of certification.
B. If the rural fund does not receive the cash investment and
issue the capital investment within such time period following
receipt of the certificate notice, the certification shall lapse and
the rural fund shall not issue the capital investment without
reapplying to the Department for certification. Lapsed
certifications shall revert to the Department and shall be reissued
pro rata to applicants whose capital investment allocations were
reduced in accordance with the application process provided under
subsection D of Section 3 3932 of this act title.
C. A rural fund, before making a qualified investment, may
request from the Department a written opinion as to whether the
business in which it proposes to invest is an eligible business.
The Department, no later than fifteen (15) business days after the
date of receipt of such request, shall notify the rural fund of its
determination. If the Department fails to notify the rural fund of
its determination by the twentieth business day, the business in
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which the rural fund proposes to invest shall be deemed an eligible
business.
SECTION 3. This act shall become effective November 1, 2026.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
03/04/2026 - DO PASS, As Amended and Coauthored.