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An Act
ENROLLED HOUSE
BILL NO. 4426 By: Hilbert and Hill of the
House
and
Hall of the Senate
An Act relating to revenue and taxation; amending
Section 1, Chapter 340, O.S.L. 2022, as amended by
Section 1, Chapter 164, O.S.L. 2024 (68 O.S. Supp.
2025, Section 2357.105), which relates to income tax
credit for qualified economic development
expenditures; extending date for which the credit
will be in effect; and providing an effective date.
SUBJECT: Revenue and taxation
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 1, Chapter 340, O.S.L.
2022, as amended by Section 1, Chapter 164, O.S.L. 2024 (68 O.S.
Supp. 2025, Section 2357.105), is amended to read as follows:
Section 2357.105. A. As used in this section:
1. "Eligible entity" means an entity incorporated and located
in the state with a qualifying project in a qualifying project
location;
2. "Qualifying project" means the new construction or expansion
of an eligible entity or the development of qualified initial
infrastructure to serve an eligible entity in a qualifying project
location;
3. "Qualifying project location" means a project located in an
industrial park, economic development zone, or port located within a
county in this state with a population of less than one hundred
thousand (100,000) persons ("Qualified Area"), or a project located
ENR. H. B. NO. 4426 Page 2
adjacent to a terminal, switching, or Class II or III railroad as
defined by the federal Surface Transportation Board;
4. "Project sponsor" means a local economic development
organization or authority, port authority, qualified industrial
park, or a terminal, switching, or Class II or III railroad;
5. "Project application" means an application submitted by a
project sponsor on behalf of a qualifying project for an allocation
of qualifying strategic industrial development enhancement (SIDE)
tax credits. Project applications must include a description of the
qualifying project, project location, detailed project costs, and a
summary of expected economic benefits and job creation;
6. "Qualified economic development expenditures" means
expenditures for land improvements, building construction, building
improvements and expansion, port terminal improvements, and the
purchase of certain machinery and equipment;
7. "Qualified initial infrastructure expenditures" means
expenditures for new rail infrastructure and improvements, which
includes the acquisition of right-of-way, engineering,
rehabilitation of existing inactive track to reinstate operation,
construction of new track such as industrial leads, switches, spurs,
and sidings, loading dock improvements, and transloading structures
involved with providing rail service to a qualifying project; and
8. "Project tax credit amount" means the amount of tax credits
allocated by Oklahoma Department of Commerce to a qualifying project
for qualified economic development and initial infrastructure
expenditures.
B. For tax years beginning after December 31, 2022, and ending
not later than December 31, 2027 2032, there shall be allowed a
credit against the tax imposed pursuant to Section 2355 of this
title in an amount not to exceed ten percent (10%) of an eligible
entity's qualified economic development expenditures, subject to
limitations, determination, and allocation by the Oklahoma
Department of Commerce.
C. The total project tax credit amount may not exceed ten
percent (10%) of the qualified economic development expenditures,
except for qualified initial infrastructure expenditures the project
tax credit amount is earned at the rate of fifty percent (50%) of
qualified initial infrastructure expenditures.
ENR. H. B. NO. 4426 Page 3
D. 1. The project tax credit amount for qualified economic
development expenditures may not exceed Six Million Dollars
($6,000,000.00) per qualifying project.
2. The project tax credit amount for qualified initial
infrastructure expenditures may not exceed Three Million Dollars
($3,000,000.00) per qualifying project.
Projects are eligible to combine qualified economic development
and qualified initial infrastructure expenditures, but the total
project tax credit amount may not exceed Six Million Dollars
($6,000,000.00) per qualifying project in aggregate.
E. The issuance of the project tax credit amount shall be
subject to review of eligible expenditures and qualifying project
status by the Oklahoma Department of Commerce.
F. The credits authorized pursuant to this section may not be
used to reduce the tax liability of the taxpayer to less than zero
(0).
G. The credits allowed pursuant to this section that are not
used may be assigned to a qualifying project affiliate by written
agreement at any time during the tax year in which the credit is
earned or the five (5) years following the tax year the qualified
expenditures are incurred. For purposes of this subsection, a
"qualifying project affiliate" shall include a customer, vendor,
project investor, or strategic finance partner of the eligible
entity subject to the Oklahoma corporate or individual income tax.
The eligible taxpayer and the qualifying project affiliate must
jointly file a copy of the written assignment agreement with the
Oklahoma Tax Commission within thirty (30) days of the assignment.
The written agreement must contain the name, address, and taxpayer
identification number of the parties to the assignment, the tax year
the eligible taxpayer incurred the qualified expenditures, the
amount of credit being assigned, and the tax year or years for which
the credit may be claimed.
H. To the extent not used, the tax credit authorized by this
section may be carried over, in order, to each of the five (5)
subsequent taxable years.
I. Credits allocated by the Department shall not exceed Twelve
Million Dollars ($12,000,000.00) in a tax year. Qualifying projects
ENR. H. B. NO. 4426 Page 4
that have submitted an application and are not allocated all or part
of credit for qualified economic development expenditures or
qualified initial infrastructure expenditures shall be eligible for
credit in subsequent tax years.
J. 1. The Oklahoma Tax Commission may promulgate rules, forms,
and regulations as are necessary to implement and administer the
provisions of this section and certify the tax credit amount
generated by each qualifying project annually.
2. The Oklahoma Department of Commerce shall promulgate rules
to permit verification of the eligibility of a qualifying project
for the purpose of claiming the credit. The rules shall provide for
the approval of qualified economic development expenditures prior to
commencement of a project and provide a certificate of verification
upon completion of a project that uses qualified economic
development expenditures. The certificate of verification shall
satisfy all requirements of the Oklahoma Tax Commission pertaining
to the eligibility of the eligible taxpayer claiming the credit.
SECTION 2. This act shall become effective November 1, 2026.
ENR. H. B. NO. 4426 Page 5
Passed the House of Representatives the 24th day of February,
2026.
Presiding Officer of the House
of Representatives
Passed the Senate the 29th day of April, 2026.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________