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SENATE FLOOR VERSION - SB234 SFLR Page 1
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SENATE FLOOR VERSION
March 5, 2025
AS AMENDED
SENATE BILL NO. 234 By: Rader
[ income tax credit - Adaptive Reuse Housing
Development Program - applications - reallocation -
preference rating system - qualification -
notification - carry forward - promulgation of rules
- codification - effective date -
emergency ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2357.413 of Title 68, unless
there is created a duplication in numbering, reads as follows:
A. There is hereby created the Adaptive Reuse Housing
Development Program.
B. As used in this section:
1. “Adaptive reuse” means the process of adapting obsolete
structures for residential use;
2. “Obsolete structure” means a structure that:
a. is at least thirty (30) years old,
b. has been vacant or underutilized for at least three
(3) years, and
c. generates rental from an underutilized structure
income that is less than fifty percent (50%) of the
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local market rate income for a property of similar
class and size;
3. “Program” means the Adaptive Reuse Housing Development
Program;
4. “Qualified expenditures” means additional costs related to
the development of an obsolete structure not typically incurred in
the construction of new structures or the rehabilitation of
relatively more modern structures, including:
a. environmental remediation,
b. bringing the structure into compliance with applicable
building codes and regulations,
c. efficiency upgrades, and
d. plumbing, electrical, and climate control upgrades;
and
5. “Underutilized” means a structure where at least fifty
percent (50%) of rentable square footage is vacant, or a structure
that is utilized for a use for which the structure was not
originally designed or intended.
C. The program shall be administered by the Oklahoma Department
of Commerce and the Oklahoma Tax Commission.
D. An establishment may apply for credit against the tax
imposed pursuant to Section 2355 of Title 68 of the Oklahoma
Statutes for up to fifty percent (50%) of qualified expenditures for
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an adaptive reuse project. Applications for credit shall be made on
a form prescribed by the Department.
E. Beginning fiscal year 2026 and in subsequent fiscal years,
the Department is authorized to approve applications for credit, not
to exceed Five Million Dollars ($5,000,000.00) in any fiscal year.
Partial approval for credit due to the fiscal year limitations
provided in this subsection may be awarded by the Department. In
any fiscal year where the credit amount approved is less than the
limitation provided in this subsection, the difference shall be
added to the limitation in subsequent fiscal years. Credits
approved but not claimed pursuant to subsection G of this section
shall be added to the limitation in subsequent fiscal years.
F. For a fiscal year where applications for credit exceed the
fiscal year limitations pursuant to subsection E of this section,
the Department shall develop a preference rating system for approval
based on the following:
a. rental vacancy rates in the area of the proposed
project,
b. rent rates in the area of the proposed project,
c. area median income, and
d. availability of affordable housing in the area of the
proposed project.
G. Upon approval of an application and the completion of the
adaptive reuse project, the establishment shall be eligible to claim
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the credit for tax year 2026 and subsequent tax years, not to exceed
the approved amount, for qualified expenditures. The Department
shall verify the project is completed and meets all prescribed
requirements before approving the claim for credit.
H. Upon approval of the claim for credit, the Department shall
notify the Commission of the credit amount awarded to the
establishment. The credit shall be awarded for the tax year
corresponding to the calendar year in which the claim is approved.
I. Credit awarded pursuant to this section shall not be used to
reduce the income tax liability of the taxpayer to less than zero
(0). If the amount of the credit allowed pursuant to subsection D
of this section exceeds the income tax liability, the amount of
credit not used in any tax year may be carried forward, in order, to
each of the ten (10) subsequent tax years.
J. The Department and the Commission may promulgate rules to
effectuate the provisions of this section.
SECTION 2. This act shall become effective July 1, 2025.
SECTION 3. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS
March 5, 2025 - DO PASS AS AMENDED