STATE OF OKLAHOMA

2nd Session of the 53rd Legislature (2012)

SENATE BILL 1587	By:	Holt, Brecheen, Johnson (Rob) and Treat

AS INTRODUCED

An Act relating to income tax; amending 27A O.S. 2011, Section 2-11-303, which relates to income tax credits for certain investment; limiting ability of certain taxpayers to claim credit for investment related to recycling, reuse or reduction of hazardous waste; amending 68 O.S. 2011, Section 1353, which relates to sales tax; modifying apportionment of sales tax after specified date for purposes of conformity; amending 68 O.S. 2011, Section 2353, which relates to definitions; modifying definition; amending 68 O.S. 2011, Section 2355, which relates to income tax rates; modifying rates and brackets for specified time period; amending 68 O.S. 2011, Sections 2357, 2357.4, 2357.6, 2357.11, 2357.22, 2357.25, 2357.26, 2357.27, 2357.30, 2357.32A, 2357.32B, 2357.33, 2357.41, 2357.45, 2357.46, 2357.47, 2357.59, 2357.81, 2357.100, 2357.101, 2357.102, 2357.104, 2357.203, 2357.206, 2357.302 and 2357.303, which relate to tax credits; limiting ability of certain taxpayers to claim credit related to or for certain federal credits, certain investments or hiring, contributions to certain fund, providing power or making purchase related to coal, investments in certain property, investments by agricultural producers, expenses related to providing child care services or the business of child care services, small business guaranty fees, production and sale of electricity, manufacture of small wind turbines, certain immunizations, expenditures for rehabilitation of certain buildings, donations to certain institutes, energy efficient residential construction, wages and modification expenses, investment in certain facilities, amount equal to ad valorem taxes, purchase of poultry litter, investment in film or music project, purchase of dry fire hydrant, railroad reconstruction or replacement expenditures, costs associated with specially trained canines, contributions to certain organizations, tuition reimbursement for certain employees, compensation paid to certain employees, amending 68 O.S. 2011, Section 2358, which relates to adjustments to income; after certain date, deleting ability to adjust income for personal exemption, blindness, standard or itemized deductions, expenses related to modification for a disability, certain dividends, retirement benefits, Social Security benefits, contributions to a medical savings account, deferred compensation distributions, depreciation for certain costs, nonrecurring adoption expenses, discharge of specified obligations, certain stipend or scholarship, contributions to the College Savings Plan, certain military retirement benefits, benefits in lieu of Social Security, amounts related to organ donation, amounts received by a beneficiary of death benefits, amount received by a participant in a livestock show, capital gains received by an individual and employment related to computer and data services; repealing 68 O.S. 2011, Sections 2357.43, 2357.304, 2358.3, 2358.7, 2906, 2907 and 5011, which relate to tax credits, exemptions and deductions; providing effective dates; and declaring an emergency.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     27A O.S. 2011, Section 2-11-303, is amended to read as follows:
Section 2-11-303.  A.  Except as otherwise provided in subsection C of this section, any person, firm, corporation or other legal entity engaged, or proposing to engage, in the recycling, reuse or source reduction of any hazardous waste, the processing of which is certified as provided in Section 2-11-305 of this title, shall be entitled to a one-time credit against its income tax liability, as provided in Section 2-11-304 of this title, of not to exceed twenty percent (20%) of the net investment cost of equipment and installation of processes used for the recycling, reuse, or source reduction of hazardous waste.  Provided, that:
1.  The credit allowed to be taken shall not exceed the income tax liability for such year for such person, firm, corporation or legal entity;
2.  The tax credit to be allowed shall not extend to or include plant operating expenses;
3.  The person, firm, corporation or other legal entity applying for such tax credit actually uses the recycling, reuse, or source reduction process;
4.  The tax credit is taken within three (3) years of the installation and actual use of such process; and
5.  The tax credit allowed by any person, firm, corporation or other legal entity for any three (3) consecutive tax years shall not exceed a total of Fifty Thousand Dollars ($50,000.00).
B.  The investment cost of such process may be treated as a depreciable asset for income tax purposes.
C.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 2.     AMENDATORY     68 O.S. 2011, Section 1353, is amended to read as follows:
Section 1353.  A.  It is hereby declared to be the purpose of the Oklahoma Sales Tax Code to provide funds for the financing of the program provided for by the Oklahoma Social Security Act and to provide revenues for the support of the functions of the state government of Oklahoma, and for this purpose it is hereby expressly provided that, revenues derived pursuant to the provisions of the Oklahoma Sales Tax Code, subject to the apportionment requirements for the Oklahoma Tax Commission and Office of State Finance Joint Computer Enhancement Fund provided by Section 265 of this title and beginning July 1, 2013, if applicable, subject to the apportionment requirements for the Rebuilding Oklahoma Access and Driver Safety Fund, the Oklahoma Tourism and Passenger Rail Revolving Fund and the Public Transit Revolving Fund to be derived from sales tax revenue that would otherwise be apportioned to the General Revenue Fund as provided by Section 1521 of Title 69 of the Oklahoma Statutes, shall be apportioned as follows:
1.	a.	the following amounts shall be paid to the State Treasurer to be placed to the credit of the General Revenue Fund to be paid out pursuant to direct appropriation by the Legislature:
Fiscal Year	Amount
FY 2003 and FY 2004	86.04%
FY 2005	85.83%
FY 2006	85.54%
FY 2007	85.04%
~~FY 2008 and each fiscal year thereafter~~	~~83.61%~~
FY 2008 through FY 2013	83.61%
FY 2014 through FY 2018	82.147%
FY 2019 and each fiscal year thereafter	81.938%
b.	in the event that additional monies are necessary pursuant to paragraph 6 of this section, such additional monies shall be deducted in the proportion determined by the State Board of Equalization pursuant to paragraph 3 of Section 2355.1B of this title from the monies apportioned to the General Revenue Fund;
2.  ~~For FY 2003, FY 2004 and FY 2005, ten and forty-two one-hundredths percent (10.42%),~~ The following amounts shall be paid to the State Treasurer to be placed to the credit of the Education Reform Revolving Fund of the State Department of Education ~~and for FY 2006 and each fiscal year thereafter, ten and forty-six one-hundredths percent (10.46%) shall be paid to the State Treasurer to be placed to the credit of the Education Reform Revolving Fund of the State Department of Education;~~:
Fiscal Year	Amount
FY 2012 through FY 2013	10.46%
FY 2014 through FY 2018	10.277%
FY 2019 and each fiscal year thereafter	10.251%
3.  The following amounts shall be paid to the State Treasurer to be placed to the credit of the Teachers' Retirement System Dedicated Revenue Revolving Fund:
Fiscal Year	Amount
FY 2003 and FY 2004	3.54%
FY 2005	3.75%
FY 2006	4.0%
FY 2007	4.5%
~~FY 2008 and each fiscal year thereafter~~	~~5.0%~~
FY 2008 through FY 2013	5.0%
FY 2014 and each fiscal year thereafter	6.25%
4.  ~~For the fiscal year beginning July 1, 2010, and for each fiscal year thereafter, eighty-seven one-hundredths percent (0.87%)~~ The following amounts shall be paid to the State Treasurer to be further apportioned as ~~follows~~ provided in subparagraphs a and b of this paragraph:
Fiscal Year	Amount
FY 2012 through FY 2013	0.87%
FY 2014 through FY 2018	0.855%
FY 2019 and each fiscal year thereafter	0.853%
a.	thirty-six percent (36%) shall be placed to the credit of the Oklahoma Tourism Promotion Revolving Fund, and
b.	sixty-four percent (64%) shall be placed to the credit of the Oklahoma Tourism Capital Improvement Revolving Fund; and
5.  ~~For the fiscal year beginning July 1, 2010, and for each fiscal year thereafter, six one-hundredths percent (0.06%)~~ The following amounts shall be placed to the credit of the Oklahoma Historical Society Capital Improvement and Operations Revolving Fund~~.~~:
Fiscal Year	Amount
FY 2012 through FY 2013	0.06%
FY 2014 and each fiscal year thereafter	0.59%
6.  For the fiscal year beginning July 1, 2013, through the fiscal year ending on June 30, 2018, one-half of one percent (0.5%) shall be placed to the credit of the Ad Valorem Reimbursement Fund.  For the fiscal year beginning July 1, 2018, and each fiscal year thereafter, three-quarters of one percent (0.75%) shall be placed to the credit of the Ad Valorem Reimbursement Fund.
7.  During the first fiscal year after the State Board of Equalization has made a determination as provided in Section 2355.1B of this title, regarding a baseline amount of revenue apportioned pursuant to paragraph 3 of this section, and for each fiscal year thereafter, in no event shall monies apportioned pursuant to paragraph 3 of this section, paragraph 3 of Section 1403 of this title and subparagraph c of paragraph 1 of Section 2352 of this title be less than such baseline amount.
B.  Provided, for the fiscal year beginning July 1, 2007, and every fiscal year thereafter, an amount of revenue shall be apportioned to each municipality or county which levies a sales tax subject to the provisions of Section 1357.10 of this title and subsection F of Section 2701 of this title equal to the amount of sales tax revenue of such municipality or county exempted by the provisions of Section 1357.10 of this title and subsection F of Section 2701 of this title.  The Oklahoma Tax Commission shall promulgate and adopt rules necessary to implement the provisions of this subsection.
SECTION 3.     AMENDATORY     68 O.S. 2011, Section 2353, is amended to read as follows:
Section 2353.  For the purpose of and when used in Section 2351 et seq. of this title, unless the context otherwise requires:
1.  "Tax Commission" means the Oklahoma Tax Commission;
2.  "Internal Revenue Code" means the United States Internal Revenue Code, as the same may be amended or adopted from time to time applicable to the taxable year; and other provisions of the laws of the United States relating to federal income taxes, as the same may be or become effective at any time or from time to time applicable to the taxable year;
3.  Any term used in Section 2351 et seq. of this title shall have the same meaning as when used in a comparable context in the Internal Revenue Code, unless a different meaning is clearly required.  For all taxable periods covered by Section 2351 et seq. of this title, the tax status and all elections of all taxpayers covered by Section 2351 et seq. of this title shall be the same for all purposes material hereto as they are for federal income tax purposes except when Section 2351 et seq. of this title specifically provides otherwise;
4.  "Resident individual" means a natural person who is domiciled in this state, and any other natural person who spends in the aggregate more than seven (7) months of the taxable year within this state shall be presumed to be a resident for purposes of Section 2351 et seq. of this title in absence of proof to the contrary.  A natural person who resides less than seven (7) months of the taxable year within this state is presumed to be a "part-year resident individual" for purposes of the Oklahoma Income Tax Code, Section 2351 et seq. of this title, in absence of proof to the contrary.  A "nonresident individual" means an individual other than a resident individual or a part-year resident individual.
For all tax years beginning after December 31, 1981, a nonresident individual, with respect to foreign earned income and deductions, shall include an individual who:
a.	during any period of twenty-four (24) consecutive months is out of the United States at least five hundred fifty (550) days,
b.	during such period referred to in subparagraph a of this paragraph is not present in this state for more than ninety (90) days during any taxable year,
c.	during any period of less than an entire taxable year, which period is contained within the period referred to in subparagraph a of this paragraph, is not present in this state for a number of days in excess of an amount which bears the same ratio to ninety (90) days as the number of days contained in the period of less than an entire taxable year bears to three hundred sixty-five (365), and
d.	during such period referred to in subparagraph a of this paragraph does not maintain a permanent place of abode in this state at which the spouse of the individual, unless such spouse is legally separated, or minor children of the individual are present for more than one hundred eighty (180) days;
5.  "Resident estate" means the estate of a decedent who at death was domiciled in this state.  "Nonresident estate" means an estate other than a resident estate;
6.  "Resident trust" means:
a.	a trust, or a portion of a trust, consisting of property transferred by will of a decedent domiciled in this state at death, or a trust, or a portion of a trust, consisting of the property of a person domiciled in this state if such trust is not irrevocable, and
b.	a trust, or portion of a trust, consisting of property of a person domiciled in this state at the time such property was transferred to the trust if such trust or portion was then irrevocable or a person domiciled in this state at the time such trust or portion became irrevocable.  A trust, or portion of a trust, is irrevocable if it is not subject to a power exercisable solely by the transferor of such property, at any time, to revest title in the transferor.  "Nonresident trust" means a trust other than a resident trust;
7.  "Resident partner" means a partner who is a resident individual, a resident estate, a resident trust or a resident corporation.  "Nonresident partner" means a partner other than a resident partner;
8.  "Resident beneficiary" means a beneficiary of an estate or trust which beneficiary is a resident individual, a resident estate, a resident trust or a resident corporation.  "Nonresident beneficiary" means a beneficiary other than a resident beneficiary;
9.  "Resident corporation" means a corporation whose principal place of business is located within the State of Oklahoma.  "Nonresident corporation" means any corporation other than a resident corporation;
10.  "Taxable income" with respect to any taxpayer means the "taxable income", "life insurance company taxable income", "mutual insurance company taxable income", "(regulated) investment company taxable income", "real estate investment trust taxable income", and "cooperatives' taxable income" and any other "taxable income" as defined in the Internal Revenue Code as applies to such taxpayer or any other income of such taxpayer including, but not limited to, lump sum distributions as defined by the Internal Revenue Code of 1986, as amended; provided, in the case of income derived from oil and gas well production, any taxpayer, at his or her option, may deduct as an allowance for depletion for tax years ending on or before December 31, 2012, in lieu of other calculation of depletion based on the cost of the oil and gas deposit, twenty-two percent (22%) of the gross income derived from the properties during the taxable year.  For the tax year beginning on January 1, 2013, and all subsequent tax years, the twenty-two-percent deduction shall not be allowed for any taxpayer subject to tax imposed by subsection B of Section 2355 of this title.  Provided further, for tax years beginning on or after January 1, 1997, and ending on or before December 31, 1999, and for tax years beginning on or after January 1, 2001, and ending on or before December 31, 2011, for major oil companies as defined in Section 288.2 of Title 52 of the Oklahoma Statutes, such allowance shall not exceed fifty percent (50%) of the net income of the taxpayer (computed without allowance for depletion) from the property.  During taxable years other than those specified herein, for all taxpayers, such allowance shall not exceed fifty percent (50%) of the net income of the taxpayer (computed without allowance for depletion) from the property.  If a depletion allowance is allowed as a deduction in arriving at the adjusted gross income in the case of an individual, or taxable income for corporations and trusts, or distributable income of partnerships by the Internal Revenue Service, the percentage depletion so calculated shall in no event be a duplication of depletion allowed on the Federal Income Tax Return;
11.  "Adjusted gross income" means "adjusted gross income" as defined in the Internal Revenue Code;
12.  "Oklahoma taxable income" means "taxable income" as reported (or as would have been reported by the taxpayer had a return been filed) to the federal government, and in the event of adjustments thereto by the federal government as finally ascertained under the Internal Revenue Code, adjusted further as hereinafter provided;
13.  "Oklahoma adjusted gross income" means "adjusted gross income" as reported to the federal government (or as would have been reported by the taxpayer had a return been filed), or in the event of adjustments thereby by the federal government as finally ascertained under the Internal Revenue Code, adjusted further as hereinafter provided;
14.  "State" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States or any political subdivision thereof; and
15.  "Taxpayer" means any person subject to a tax imposed by this Article, or whose income is, in whole or in part, subject to a tax imposed by any provision of this article.
SECTION 4.     AMENDATORY     68 O.S. 2011, Section 2355, is amended to read as follows:
Section 2355.  A.  Individuals.  For all taxable years beginning after December 31, 1998 and before January 1, 2006, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed at the option of the taxpayer under one of the two following methods:
1.  METHOD 1.
a.	Single individuals and married individuals filing separately not deducting federal income tax:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof,
(3)	2% tax on next $1,250.00 or part thereof,
(4)	3% tax on next $1,150.00 or part thereof,
(5)	4% tax on next $1,300.00 or part thereof,
(6)	5% tax on next $1,500.00 or part thereof,
(7)	6% tax on next $2,300.00 or part thereof, and
(8)	(a)	for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder,
(b)	for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and
(c)	for taxable years beginning on or after January 1, 2004, 6.65% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code not deducting federal income tax:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof,
(3)	2% tax on next $2,500.00 or part thereof,
(4)	3% tax on next $2,300.00 or part thereof,
(5)	4% tax on next $2,400.00 or part thereof,
(6)	5% tax on next $2,800.00 or part thereof,
(7)	6% tax on next $6,000.00 or part thereof, and
(8)	(a)	for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder,
(b)	for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and
(c)	for taxable years beginning on or after January 1, 2004, 6.65% tax on the remainder.
2.  METHOD 2.
a.	Single individuals and married individuals filing separately deducting federal income tax:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof,
(3)	2% tax on next $1,250.00 or part thereof,
(4)	3% tax on next $1,150.00 or part thereof,
(5)	4% tax on next $1,200.00 or part thereof,
(6)	5% tax on next $1,400.00 or part thereof,
(7)	6% tax on next $1,500.00 or part thereof,
(8)	7% tax on next $1,500.00 or part thereof,
(9)	8% tax on next $2,000.00 or part thereof,
(10)	9% tax on next $3,500.00 or part thereof, and
(11)	10% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code deducting federal income tax:
(1)	1/2% tax on the first $2,000.00 or part thereof,
(2)	1% tax on the next $3,000.00 or part thereof,
(3)	2% tax on the next $2,500.00 or part thereof,
(4)	3% tax on the next $1,400.00 or part thereof,
(5)	4% tax on the next $1,500.00 or part thereof,
(6)	5% tax on the next $1,600.00 or part thereof,
(7)	6% tax on the next $1,250.00 or part thereof,
(8)	7% tax on the next $1,750.00 or part thereof,
(9)	8% tax on the next $3,000.00 or part thereof,
(10)	9% tax on the next $6,000.00 or part thereof, and
(11)	10% tax on the remainder.
B.  1.  Individuals.  For all taxable years beginning on or after January 1, 2008, and before January 1, 2012, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
~~1.~~
a.	Single individuals and married individuals filing separately:
~~(a)~~
(1)	1/2% tax on first $1,000.00 or part thereof,
~~(b)~~
(2)	1% tax on next $1,500.00 or part thereof,
~~(c)~~
(3)	2% tax on next $1,250.00 or part thereof,
~~(d)~~
(4)	3% tax on next $1,150.00 or part thereof,
~~(e)~~
(5)	4% tax on next $2,300.00 or part thereof,
~~(f)~~
(6)	5% tax on next $1,500.00 or part thereof, and
~~(g)~~
(7)	5.50% tax on the remainder for the 2008 tax year ~~and any subsequent~~ through the 2011 tax year ~~unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and~~
~~(h)~~	~~5.25% tax on the remainder for the 2009 and subsequent tax years.  The decrease in the top marginal individual income tax rate otherwise authorized by this subparagraph shall be contingent upon the determination required to be made by the State Board of Equalization pursuant to Section 2355.1A of this title~~.
~~2.~~
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
~~(a)~~
(1)	1/2% tax on first $2,000.00 or part thereof,
~~(b)~~
(2)	1% tax on next $3,000.00 or part thereof,
~~(c)~~
(3)	2% tax on next $2,500.00 or part thereof,
~~(d)~~
(4)	3% tax on next $2,300.00 or part thereof,
~~(e)~~
(5)	4% tax on next $2,400.00 or part thereof,
~~(f)~~
(6)	5% tax on next $2,800.00 or part thereof, and
~~(g)~~
(7)	5.50% tax on the remainder for the 2008 tax year ~~and any subsequent~~ through the 2011 tax year ~~unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and~~
~~(h)~~	~~5.25% tax on the remainder for the 2009 and subsequent tax years.  The decrease in the top marginal individual income tax rate otherwise authorized by this subparagraph shall be contingent upon the determination required to be made by the State Board of Equalization pursuant to Section 2355.1A of this title~~.
2.  Individuals.  For the taxable year beginning on January 1, 2012, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof,
(3)	2% tax on next $1,250.00 or part thereof,
(4)	3% tax on next $1,150.00 or part thereof,
(5)	4% tax on next $2,300.00 or part thereof,
(6)	5% tax on next $1,500.00 or part thereof, and
(7)	5.25% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof,
(3)	2% tax on next $2,500.00 or part thereof,
(4)	3% tax on next $2,300.00 or part thereof,
(5)	4% tax on next $2,400.00 or part thereof,
(6)	5% tax on next $2,800.00 or part thereof, and
(7)	5.25% tax on the remainder.
3.  Individuals.  For the taxable year beginning on January 1, 2013, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof,
(3)	2% tax on next $1,250.00 or part thereof, and
(4)	2.25% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof,
(3)	2% tax on next $2,500.00 or part thereof, and
(4)	2.25% tax on the remainder.
4.  Individuals.  For the taxable year beginning on January 1, 2014, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof, and
(3)	2% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof, and
(3)	2% tax on the remainder.
5.  Individuals.  For the taxable year beginning on January 1, 2015, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof, and
(3)	1.75% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof, and
(3)	1.75% tax on the remainder.
6.  Individuals.  For the taxable year beginning on January 1, 2016, a tax shall be imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof, and
(3)	1.5% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof, and
(3)	1.5% tax on the remainder.
7.  Individuals.  For the taxable year beginning on January 1, 2017, a tax shall be imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof, and
(3)	1.25% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof, and
(3)	1.25% tax on the remainder.
8.  Individuals.  For the taxable year beginning on January 1, 2018, a tax shall be imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof, and
(2)	1% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof, and
(2)	1% tax on the remainder.
9.  Individuals.  For the taxable year beginning on January 1, 2019, a tax shall be imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
a.	Single individuals and married individuals filing separately:
(1)	1/2% tax on first $1,000.00 or part thereof, and
(2)	3/4% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(1)	1/2% tax on first $2,000.00 or part thereof, and
(2)	3/4% tax on the remainder.
10.  Individuals.  For the taxable year beginning on January 1, 2020, a tax of 1/2% shall be imposed upon the Oklahoma taxable income of every resident or nonresident who files as a single individual, married individual filing separately, married individual filing jointly, surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and head of household as defined in the Internal Revenue Code.
11.  Individuals.  For the taxable year beginning on January 1, 2021, a tax of 1/4% shall be imposed upon the Oklahoma taxable income of every resident or nonresident who files as a single individual, married individual filing separately, married individual filing jointly, surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of household as defined in the Internal Revenue Code; and
12. Individuals.  For all taxable years beginning on and after January 1, 2022, no tax shall be imposed on income.
No deduction for federal income taxes paid shall be allowed to any taxpayer to arrive at taxable income.
C.  Nonresident aliens.  In lieu of the rates set forth in subsection A above, there shall be imposed on nonresident aliens, as defined in the Internal Revenue Code, a tax of eight percent (8%) instead of thirty percent (30%) as used in the Internal Revenue Code, with respect to the Oklahoma taxable income of such nonresident aliens as determined under the provision of the Oklahoma Income Tax Act.
Every payer of amounts covered by this subsection shall deduct and withhold from such amounts paid each payee an amount equal to eight percent (8%) thereof.  Every payer required to deduct and withhold taxes under this subsection shall for each quarterly period on or before the last day of the month following the close of each such quarterly period, pay over the amount so withheld as taxes to the Tax Commission, and shall file a return with each such payment.  Such return shall be in such form as the Tax Commission shall prescribe.  Every payer required under this subsection to deduct and withhold a tax from a payee shall, as to the total amounts paid to each payee during the calendar year, furnish to such payee, on or before January 31, of the succeeding year, a written statement showing the name of the payer, the name of the payee and the payee's social security account number, if any, the total amount paid subject to taxation, and the total amount deducted and withheld as tax and such other information as the Tax Commission may require.  Any payer who fails to withhold or pay to the Tax Commission any sums herein required to be withheld or paid shall be personally and individually liable therefor to the State of Oklahoma.
D.  Corporations.  For all taxable years beginning after December 31, 1989, a tax is hereby imposed upon the Oklahoma taxable income of every corporation doing business within this state or deriving income from sources within this state in an amount equal to six percent (6%) thereof.
There shall be no additional Oklahoma income tax imposed on accumulated taxable income or on undistributed personal holding company income as those terms are defined in the Internal Revenue Code.
E.  Certain foreign corporations.  In lieu of the tax imposed in the first paragraph of subsection C of this section, for all taxable years beginning after December 31, 1989, there shall be imposed on foreign corporations, as defined in the Internal Revenue Code, a tax of six percent (6%) instead of thirty percent (30%) as used in the Internal Revenue Code, where such income is received from sources within Oklahoma, in accordance with the provisions of the Internal Revenue Code and the Oklahoma Income Tax Act.
Every payer of amounts covered by this subsection shall deduct and withhold from such amounts paid each payee an amount equal to six percent (6%) thereof.  Every payer required to deduct and withhold taxes under this subsection shall for each quarterly period on or before the last day of the month following the close of each such quarterly period, pay over the amount so withheld as taxes to the Tax Commission, and shall file a return with each such payment.  Such return shall be in such form as the Tax Commission shall prescribe.  Every payer required under this subsection to deduct and withhold a tax from a payee shall, as to the total amounts paid to each payee during the calendar year, furnish to such payee, on or before January 31, of the succeeding year, a written statement showing the name of the payer, the name of the payee and the payee's social security account number, if any, the total amounts paid subject to taxation, the total amount deducted and withheld as tax and such other information as the Tax Commission may require.  Any payer who fails to withhold or pay to the Tax Commission any sums herein required to be withheld or paid shall be personally and individually liable therefor to the State of Oklahoma.
F.  Fiduciaries.  A tax is hereby imposed upon the Oklahoma taxable income of every trust and estate at the same rates as are provided in subsection B of this section for single individuals.  Fiduciaries are not allowed a deduction for any federal income tax paid.
G.  Tax rate tables.  For all taxable years beginning after December 31, 1991, in lieu of the tax imposed by subsection A or B of this section, as applicable there is hereby imposed for each taxable year on the taxable income of every individual, whose taxable income for such taxable year does not exceed the ceiling amount, a tax determined under tables, applicable to such taxable year which shall be prescribed by the Tax Commission and which shall be in such form as it determines appropriate.  In the table so prescribed, the amounts of the tax shall be computed on the basis of the rates prescribed by subsections A and B of this section.  For purposes of this subsection, the term "ceiling amount" means, with respect to any taxpayer, the amount determined by the Tax Commission for the tax rate category in which such taxpayer falls.
SECTION 5.     AMENDATORY     68 O.S. 2011, Section 2357, is amended to read as follows:
Section 2357.  A.  The withheld taxes and estimated taxes paid shall be allowed as credits as provided by law.
B.  1.  There shall be allowed as a credit against the tax imposed by Section 2355 of this title the amount of tax paid another state by a resident individual, as defined in paragraph 4 of Section 2353 of this title, upon income received as compensation for personal services in such other state; provided, such credit shall not be allowed with respect to any income specified in Section 114 of Title 4 of the United States Code, 4 U.S.C., Section 114, upon which a state is prohibited from imposing an income tax.  The credit shall not exceed such proportion of the tax payable under Section 2355 of this title as the compensation for personal services subject to tax in the other state and also taxable under Section 2355 of this title bears to the Oklahoma adjusted gross income as defined in paragraph 13 of Section 2353 of this title.
2.  For tax years beginning after December 31, 2007, and ending before January 1, 2013, there shall be allowed to a resident individual or part-year resident individual or nonresident individual member of the Armed Forces as a credit against the tax imposed by Section 2355 of this title twenty percent (20%) of the credit for child care expenses allowed under the Internal Revenue Code of the United States or five percent (5%) of the child tax credit allowed under the Internal Revenue Code, whichever amount is greater.  Neither credit authorized by this paragraph shall exceed the tax imposed by Section 2355 of this title.  The maximum child care credit allowable on the Oklahoma income tax return shall be prorated on the ratio that Oklahoma adjusted gross income bears to the federal adjusted gross income.  The credit authorized by this paragraph shall not be claimed by any taxpayer if the federal adjusted gross income reflected on the Oklahoma return for the taxpayer is in excess of One Hundred Thousand Dollars ($100,000.00).
C.  1.  Except as otherwise provided by paragraph 3 of this subsection, every taxpayer who operates a manufacturing establishment in the state shall be allowed a direct credit against income taxes owed by such taxpayer to the state, the amount of which credit shall be proportioned to the amount of gas used or consumed in Oklahoma by such taxpayer in the operation of a manufacturing establishment, at a rate of three (3) mills per thousand (1,000) cubic feet of gas used or consumed after May 1, 1971, and during each taxable year of such taxpayer provided that the credit allowed herein shall not apply to the first twenty-five thousand (25,000) MCF of gas used or gas used to generate electricity or consumed after May 1, 1971, and during each taxable year of such taxpayer.
2.  As used in this subsection:
a.	"manufacturing establishment" means a plant or establishment which engages in the business of working raw materials into wares suitable for use or which gives new shapes, new qualities or new combinations to matter which has already gone through some artificial process,
b.	"gas used or consumed" shall include all natural or casinghead gas used in the operation of the manufacturing establishment for whatever purposes, but shall not include the following:
(1)	gas which, after being severed from the earth, is subsequently injected into a formation in the state for the purpose of storing, recycling, repressuring or pressure maintenance,
(2)	gas vented or flared directly into the atmosphere,
(3)	gas used for fuel in connection with the operation and development for or production of oil or gas in the field where produced, and
(4)	gas, any part of which is resold by the manufacturing establishment, except as to that part and quantity of the gas which is actually used by the establishment and not resold, and
c.	"one thousand (1,000) cubic feet of gas" (MCF) means that quantity of gas which, measured at a pressure of fifteen and twenty-five thousandths (15.025) pounds per square inch absolute and at a temperature of sixty-nine (69) degrees Fahrenheit, would have the volume of one thousand (1,000) cubic feet.
3.  No credit otherwise authorized by the provisions of this subsection may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this paragraph shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this subsection may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this subsection~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
D.  No additions to tax shall be made in Oklahoma income tax returns by reason of the recapture or restoration of credits under the Internal Revenue Code, and no other credits against tax shall be allowed in Oklahoma income tax returns except as follows:
1.  Those credits provided in this section; and
2.  Those credits authorized by Sections 2-5-101 through 2-5-118 of Title 27A of the Oklahoma Statutes, which have been, or may hereafter be, certified pursuant to applications therefor made on or before March 22, 1971.  Provided, the total amount of the credits referred to in this subparagraph to be taken by the taxpayer shall not exceed the certified net investment cost of the facilities or processes to which such credits pertain, reduced by the greater of:
a.	the reduction in federal income tax of taxpayer as the result of deducting depreciation on such facilities or processes, or deducting nondepreciable costs for which credit has been so certified, or
b.	the increase in the amount of Oklahoma income tax that would result if taxable income were increased by the amount deducted as set forth in subparagraph a of this paragraph.
And, provided further, that, after such credits have been exhausted, taxpayer shall each year thereafter adjust taxable income by adding any depreciation taken on such facilities or processes, or any nondepreciable costs having been included in the net investment cost allowed as credit, and which depreciation or costs have been allowed as a deduction in arriving at federal taxable income for such year.
SECTION 6.     AMENDATORY     68 O.S. 2011, Section 2357.4, is amended to read as follows:
Section 2357.4.  A.  Except as otherwise provided in subsection F of Section 3658 of this title and in subsection J of this section, for taxable years beginning after December 31, 1987, there shall be allowed a credit against the tax imposed by Section 2355 of this title for:
1.  Investment in qualified depreciable property placed in service during those years for use in a manufacturing operation, as defined in Section 1352 of this title, which has received a manufacturer exemption permit pursuant to the provisions of Section 1359.2 of this title or a qualified aircraft maintenance or manufacturing facility as defined in paragraph 14 of Section 1357 of this title in this state or a qualified web search portal as defined paragraph 35 of Section 1357 of this title; or
2.  A net increase in the number of full-time-equivalent employees engaged in manufacturing, processing or aircraft maintenance in this state including employees engaged in support services.
B.  Except as otherwise provided in subsection F of Section 3658 of this title and in subsection J of this section, for taxable years beginning after December 31, 1998, there shall be allowed a credit against the tax imposed by Section 2355 of this title for:
1.  Investment in qualified depreciable property with a total cost equal to or greater than Forty Million Dollars ($40,000,000.00) within three (3) years from the date of initial qualifying expenditure and placed in service in this state during those years for use in the manufacture of products described by any Industry Number contained in Division D of Part I of the Standard Industrial Classification (SIC) Manual, latest revision; or
2.  A net increase in the number of full-time-equivalent employees in this state engaged in the manufacture of any goods identified by any Industry Number contained in Division D of Part I of the Standard Industrial Classification (SIC) Manual, latest revision, if the total cost of qualified depreciable property placed in service by the business entity within the state equals or exceeds Forty Million Dollars ($40,000,000.00) within three (3) years from the date of initial qualifying expenditure.
C.  The business entity may claim the credit authorized by subsection B of this section for expenditures incurred or for a net increase in the number of full-time-equivalent employees after the business entity provides proof satisfactory to the Oklahoma Tax Commission that the conditions imposed pursuant to paragraph 1 or paragraph 2 of subsection B of this section have been satisfied.
D.  If a business entity fails to expend the amount required by paragraph 1 or paragraph 2 of subsection B of this section within the time required, the business entity may not claim the credit authorized by subsection B of this section, but shall be allowed to claim a credit pursuant to subsection A of this section if the requirements of subsection A of this section are met with respect to the investment in qualified depreciable property or net increase in the number of full-time-equivalent employees.
E.  The credit provided for in subsection A of this section, if based upon investment in qualified depreciable property, shall not be allowed unless the investment in qualified depreciable property is at least Fifty Thousand Dollars ($50,000.00).  The credit provided for in subsection A or B of this section shall not be allowed if the applicable investment is the direct cause of a decrease in the number of full-time-equivalent employees.  Qualified property shall be limited to machinery, fixtures, equipment, buildings or substantial improvements thereto, placed in service in this state during the taxable year.  The taxable years for which the credit may be allowed if based upon investment in qualified depreciable property shall be measured from the year in which the qualified property is placed in service.  If the credit provided for in subsection A or B of this section is calculated on the basis of the cost of the qualified property, the credit shall be allowed in each of the four (4) subsequent years.  If the qualified property on which a credit has previously been allowed is acquired from a related party, the date such property is placed in service by the transferor shall be considered to be the date such property is placed in service by the transferee, for purposes of determining the aggregate number of years for which credit may be allowed.
F.  The credit provided for in subsection A or B of this section, if based upon an increase in the number of full-time-equivalent employees, shall be allowed in each of the four (4) subsequent years only if the level of new employees is maintained in the subsequent year.  In calculating the credit by the number of new employees, only those employees whose paid wages or salary were at least Seven Thousand Dollars ($7,000.00) during each year the credit is claimed shall be included in the calculation.  Provided, that the first year a credit is claimed for a new employee, such employee may be included in the calculation notwithstanding paid wages of less than Seven Thousand Dollars ($7,000.00) if the employee was hired in the last three quarters of the tax year, has wages or salary which will result in annual paid wages in excess of Seven Thousand Dollars ($7,000.00) and the taxpayer submits an affidavit stating that the employee's position will be retained in the following tax year and will result in the payment of wages in excess of Seven Thousand Dollars ($7,000.00).  The number of new employees shall be determined by comparing the monthly average number of full-time employees subject to Oklahoma income tax withholding for the final quarter of the taxable year with the corresponding period of the prior taxable year, as substantiated by such reports as may be required by the Tax Commission.
G.  The credit allowed by subsection A of this section shall be the greater amount of either:
1.  One percent (1%) of the cost of the qualified property in the year the property is placed in service; or
2.  Five Hundred Dollars ($500.00) for each new employee.  No credit shall be allowed in any taxable year for a net increase in the number of full-time-equivalent employees if such increase is a result of an investment in qualified depreciable property for which an income tax credit has been allowed as authorized by this section.
H.  The credit allowed by subsection B of this section shall be the greater amount of either:
1.  Two percent (2%) of the cost of the qualified property in the year the property is placed in service; or
2.  One Thousand Dollars ($1,000.00) for each new employee.
No credit shall be allowed in any taxable year for a net increase in the number of full-time-equivalent employees if such increase is a result of an investment in qualified depreciable property for which an income tax credit has been allowed as authorized by this section.
I.  Except as provided by subsection G of Section 3658 of this title, any credits allowed but not used in any taxable year may be carried over in order as follows:
1.  To each of the four (4) years following the year of qualification;
2.  To the extent not used in those years in order to each of the fifteen (15) years following the initial five-year period; and
3.  If a C corporation that otherwise qualified for the credits under subsection A of this section subsequently changes its operating status to that of a pass-through entity which is being treated as the same entity for federal tax purposes, the credits will continue to be available as if the pass-through entity had originally qualified for the credits subject to the limitations of this section.
To the extent not used in paragraphs 1 and 2 of this subsection, such credits from qualified depreciable property placed in service on or after January 1, 2000, may be utilized in any subsequent tax years after the initial twenty-year period.
J.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable until the provisions of this subsection shall cease to be operative on July 1, 2012.~~ except as provided in this subsection.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act ~~occurring on or after July 1, 2010, according to the provisions of this section; provided, credits~~ as follows:
1.  Credits accrued during the period from July 1, 2010, through June 30, 2012, shall be limited to a period of two (2) taxable years.  The credit shall be limited in each taxable year to fifty percent (50%) of the total amount of the accrued credit.  Any tax credits which accrue during the period of July 1, 2010, through June 30, 2012, may not be claimed for any period prior to the taxable year beginning January 1, 2012.  No credits which accrue during the period of July 1, 2010, through June 30, 2012, may be used to file an amended tax return for any taxable year prior to the taxable year beginning January 1, 2012; and
2.  Credits accrued on or after July 1, 2012, shall not be allowed for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 7.     AMENDATORY     68 O.S. 2011, Section 2357.6, is amended to read as follows:
Section 2357.6.  A.  Any person or corporation may contribute monies to the Energy Conservation Assistance Fund.  Except as otherwise provided in subsection B of this section, such contributions shall be entitled to an income tax credit against the state personal or corporate income tax liability of fifty percent (50%) of the amount contributed to the fund for the taxable year in which it was made.
B.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 8.     AMENDATORY     68 O.S. 2011, Section 2357.11, is amended to read as follows:
Section 2357.11.  A.  For purposes of this section, the term "person" means any legal business entity including limited and general partnerships, corporations, sole proprietorships, and limited liability companies, but does not include individuals.
B.  1.  Except as provided in subsection M of this section, for tax years beginning on or after January 1, 1993, and ending on or before December 31, 2014, there shall be allowed a credit against the tax imposed by Section 1803 or Section 2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma Statutes for every person in this state furnishing water, heat, light or power to the state or its citizens, or for every person in this state burning coal to generate heat, light or power for use in manufacturing operations located in this state.
2.  For tax years beginning on or after January 1, 1993, and ending on or before December 31, 2005, and for the period of January 1, 2006, through June 30, 2006, the credit shall be in the amount of Two Dollars ($2.00) per ton for each ton of Oklahoma-mined coal purchased by such person.
3.  For the period of July 1, 2006 through December 31, 2006, and for tax years beginning on or after January 1, 2007, and ending on or before December 31, 2014, the credit shall be in the amount of Two Dollars and eighty-five cents ($2.85) per ton for each ton of Oklahoma-mined coal purchased by such person.
4.  In addition to the credit allowed pursuant to the provisions of paragraph 3 of this subsection, for the period of July 1, 2006, through December 31, 2006, and except as provided in subsection M of this section, for tax years beginning on or after January 1, 2007, and ending on or before December 31, 2014, there shall be allowed a credit in the amount of Two Dollars and fifteen cents ($2.15) per ton for each ton of Oklahoma-mined coal purchased by such person.  The credit allowed pursuant to the provisions of this paragraph may not be claimed or transferred prior to January 1, 2008.
C.  For tax years beginning on or after January 1, 1995, and ending on or before December 31, 2005, and for the period beginning January 1, 2006, through June 30, 2006, there shall be allowed, in addition to the credits allowed pursuant to subsection B of this section, a credit against the tax imposed by Section 1803 or Section 2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma Statutes for every person in this state which:
1.  Furnishes water, heat, light or power to the state or its citizens, or burns coal to generate heat, light or power for use in manufacturing operations located in this state; and
2.  Purchases at least seven hundred fifty thousand (750,000) tons of Oklahoma-mined coal in the tax year.
The additional credit allowed pursuant to this subsection shall be in the amount of Three Dollars ($3.00) per ton for each ton of Oklahoma-mined coal purchased by such person.
D.  Except as otherwise provided in subsection E of this section and in subsection M of this section, for tax years beginning on or after January 1, 2001, there shall be allowed a credit against the tax imposed by Section 1803 or Section 2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma Statutes for every person in this state primarily engaged in mining, producing or extracting coal, and holding a valid permit issued by the Oklahoma Department of Mines.  For tax years beginning on or after January 1, 2001, and ending on or before December 31, 2005, and for the period beginning January 1, 2006, through June 30, 2006, the credit shall be in the amount of ninety-five cents ($0.95) per ton and for the period of July 1, 2006, through December 31, 2006, and for tax years beginning on or after January 1, 2007, the credit shall be in the amount of Five Dollars ($5.00) for each ton of coal mined, produced or extracted in on, under or through a permit in this state by such person.
E.  In addition to the credit allowed pursuant to the provisions of subsection D of this section and except as otherwise provided in subsection F of this section, for tax years beginning on or after January 1, 2001, and ending on or before December 31, 2005, and for the period of January 1, 2006, through June 30, 2006, there shall be allowed a credit against the tax imposed by Section 1803 or Section 2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma Statutes for every person in this state primarily engaged in mining, producing or extracting coal, and holding a valid permit issued by the Oklahoma Department of Mines in the amount of ninety-five cents ($0.95) per ton for each ton of coal mined, produced or extracted from thin seams in this state by such person; provided, the credit shall not apply to such coal sold to any consumer who purchases at least seven hundred fifty thousand (750,000) tons of Oklahoma-mined coal per year.
F.  In addition to the credit allowed pursuant to the provisions of subsection D of this section and except as otherwise provided in subsection G of this section, for tax years beginning on or after January 1, 2005, and ending on or before December 31, 2005, and for the period of January 1, 2006, through June 30, 2006, there shall be allowed a credit against the tax imposed by Section 1803 or Section 2355 of this title or that portion of the tax imposed by Section 624 or 628 of Title 36 of the Oklahoma Statutes, which is actually paid to and placed into the General Revenue Fund, in the amount of ninety-five cents ($0.95) per ton for each ton of coal mined, produced or extracted from thin seams in this state by such person on or after July 1, 2005.
G.  The credits provided in subsections D and E of this section shall not be allowed for coal mined, produced or extracted in any month in which the average price of coal is Sixty-eight Dollars ($68.00) or more per ton, excluding freight charges, as determined by the Tax Commission.
H.  The additional credits allowed pursuant to subsections B, C, D and E of this section but not used shall be freely transferable after January 1, 2002, by written agreement to subsequent transferees at any time during the five (5) years following the year of qualification; provided, the additional credits allowed pursuant to the provisions of paragraph 4 of subsection B of this section but not used shall be freely transferable after January 1, 2008, by written agreement to subsequent transferees at any time during the five (5) years following the year of qualification.  An eligible transferee shall be any taxpayer subject to the tax imposed by Section 1803 or Section 2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma Statutes.  The person originally allowed the credit and the subsequent transferee shall jointly file a copy of the written credit transfer agreement with the Tax Commission within thirty (30) days of the transfer.  The written agreement shall contain the name, address and taxpayer identification number of the parties to the transfer, the amount of credit being transferred, the year the credit was originally allowed to the transferring person and the tax year or years for which the credit may be claimed.  The Tax Commission may promulgate rules to permit verification of the validity and timeliness of a tax credit claimed upon a tax return pursuant to this subsection but shall not promulgate any rules which unduly restrict or hinder the transfers of such tax credit.
I.  The additional credit allowed pursuant to subsection F of this section but not used shall be freely transferable on or after July 1, 2006, by written agreement to subsequent transferees at any time during the five (5) years following the year of qualification.  An eligible transferee shall be any taxpayer subject to the tax imposed by Section 1803 or Section 2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma Statutes.  The person originally allowed the credit and the subsequent transferee shall jointly file a copy of the written credit transfer agreement with the Tax Commission within thirty (30) days of the transfer.  The written agreement shall contain the name, address and taxpayer identification number of the parties to the transfer, the amount of credit being transferred, the year the credit was originally allowed to the transferring person and the tax year or years for which the credit may be claimed.  The Tax Commission may promulgate rules to permit verification of the validity and timeliness of a tax credit claimed upon a tax return pursuant to this subsection but shall not promulgate any rules which unduly restrict or hinder the transfers of such tax credit.
J.  Any person receiving tax credits pursuant to the provisions of this section shall apply the credits against taxes payable or shall transfer the credits as provided in this section.  Credits shall not be used to lower the price of any Oklahoma-mined coal sold that is produced by a subsidiary of the person receiving a tax credit under this section to other buyers of the Oklahoma-mined coal.
K.  The credits allowed by subsections B, C, D, E and F of this section, upon election of the taxpayer, shall be treated and may be claimed as a payment of tax, a prepayment of tax or a payment of estimated tax for purposes of Section 1803 or 2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma Statutes.
L.  Any credits allowed pursuant to the provisions of subsections B, C, D, E and F of this section but not used in any tax year may be carried over in order to each of the five (5) years following the year of qualification.
M.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 9.     AMENDATORY     68 O.S. 2011, Section 2357.22, is amended to read as follows:
Section 2357.22.  A.  For tax years beginning before ~~January 1, 2015~~ January 1, 2013, there shall be allowed a one-time credit against the income tax imposed by Section 2355 of this title.  For tax years 2013 and 2014, the one-time credit shall only be allowed for a taxpayer not subject to the tax imposed by subsection B of Section 2355 of this title.
1.  For investments in qualified clean-burning motor vehicle fuel property placed in service after December 31, 1990; and
2.  For investments in qualified electric motor vehicle property placed in service after December 31, 1995, and before July 1, 2010.
B.  As used in this section, "qualified clean-burning motor vehicle fuel property" means:
1.  Equipment installed to modify a motor vehicle which is propelled by gasoline or diesel fuel so that the vehicle may be propelled by a hydrogen fuel cell, compressed natural gas, liquefied natural gas or liquefied petroleum gas; provided, equipment installed on a vehicle propelled by a hydrogen fuel cell shall only be eligible for tax year 2010.  The equipment covered by this paragraph must be new and must not have been previously used to modify or retrofit any vehicle propelled by gasoline or diesel fuel;
2.  A motor vehicle originally equipped so that the vehicle may be propelled by a hydrogen fuel cell, compressed natural gas, liquefied natural gas or liquefied petroleum gas but only to the extent of the portion of the basis of such motor vehicle which is attributable to the storage of such fuel, the delivery to the engine of such motor vehicle of such fuel, and the exhaust of gases from combustion of such fuel.  A motor vehicle originally equipped so that the vehicle may be propelled by a hydrogen fuel cell shall only be eligible for tax year 2010;
3.  Property, not including a building and its structural components, which is:
a.	directly related to the delivery of compressed natural gas, liquefied natural gas or liquefied petroleum gas, or hydrogen, for commercial purposes or for a fee or charge, into the fuel tank of a motor vehicle propelled by such fuel including compression equipment and storage tanks for such fuel at the point where such fuel is so delivered but only if such property is not used to deliver such fuel into any other type of storage tank or receptacle and such fuel is not used for any purpose other than to propel a motor vehicle, or
b.	a metered-for-fee, public access recharging system for motor vehicles propelled in whole or in part by electricity.  The property covered by this paragraph must be new, and must not have been previously installed or used to refuel vehicles powered by compressed natural gas, liquefied natural gas or liquefied petroleum gas, hydrogen or electricity.
Any property covered by this paragraph which is related to the delivery of hydrogen into the fuel tank of a motor vehicle shall only be eligible for tax year 2010; or
4.  Property which is directly related to the compression and delivery of natural gas from a private home or residence, for noncommercial purposes, into the fuel tank of a motor vehicle propelled by compressed natural gas.  The property covered by this paragraph must be new and must not have been previously installed or used to refuel vehicles powered by natural gas.
C.  As used in this section, "qualified electric motor vehicle property" means a motor vehicle originally equipped to be propelled only by electricity; provided, if a motor vehicle is also equipped with an internal combustion engine, then such vehicle shall be considered "qualified electric motor vehicle property" only to the extent of the portion of the basis of such motor vehicle which is attributable to the propulsion of the vehicle by electricity.  The term "qualified electric motor vehicle property" shall not apply to vehicles known as "golf carts", "go-carts" and other motor vehicles which are manufactured principally for use off the streets and highways.
D.  As used in this section, "motor vehicle" means a motor vehicle originally designed by the manufacturer to operate lawfully and principally on streets and highways.
E.  The credit provided for in subsection A of this section shall be as follows:
1.  For the qualified clean-burning motor vehicle fuel property defined in paragraph 1 or 2 of subsection B of this section and for the qualified electric motor vehicle property, fifty percent (50%) of the cost of the qualified clean-burning motor vehicle fuel property or qualified electric motor vehicle property;
2.  For qualified clean-burning motor vehicle fuel property defined in paragraph 3 of subsection B of this section, a per-location credit of seventy-five percent (75%) of the cost of the qualified clean-burning motor vehicle fuel property; and
3.  For qualified clean-burning motor vehicle fuel property defined in paragraph 4 of subsection B of this section, a per-location credit of the lesser of fifty percent (50%) of the cost of the qualified clean-burning motor vehicle fuel property or Two Thousand Five Hundred Dollars ($2,500.00).
F.  In cases where no credit has been claimed pursuant to paragraph 1 of subsection E of this section by any prior owner and in which a motor vehicle is purchased by a taxpayer with qualified clean-burning motor vehicle fuel property or qualified electric motor vehicle property installed by the manufacturer of such motor vehicle and the taxpayer is unable or elects not to determine the exact basis which is attributable to such property, the taxpayer may claim a credit in an amount not exceeding the lesser of ten percent (10%) of the cost of the motor vehicle or One Thousand Five Hundred Dollars ($1,500.00).
G.  If the tax credit allowed pursuant to subsection A of this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of the credit not used as an offset against the income taxes of a taxable year may be carried forward as a credit against subsequent income tax liability for a period not to exceed five (5) years.
H.  A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half (1/2) of the tax credit that would have been allowed for a joint return.
I.  The Oklahoma Tax Commission is herein empowered to promulgate rules by which the purpose of this section shall be administered, including the power to establish and enforce penalties for violations thereof.
SECTION 10.     AMENDATORY     68 O.S. 2011, Section 2357.25, is amended to read as follows:
Section 2357.25.  A.  Except as provided in subsection K of this section, there shall be allowed a credit against the tax imposed by Section 2355 of this title for direct investments by Oklahoma agricultural producers in Oklahoma producer-owned agricultural processing cooperatives, Oklahoma producer-owned agricultural processing ventures, or Oklahoma producer-owned agricultural processing marketing associations or Oklahoma-owned and -based corporations or partnerships created and designed to develop and advance the production, processing, handling and marketing of agricultural commodities grown, made or manufactured in Oklahoma.  For calendar years 1997 and 1998, the amount of the credit shall be thirty percent (30%) of the amount of the investment by the Oklahoma agricultural producer in Oklahoma producer-owned agricultural processing cooperatives, ventures, or marketing associations.
B.  For calendar year 2006, and all subsequent years, the credit percentage, not to exceed thirty percent (30%), shall be adjusted annually so that the total estimate of credits does not exceed Two Million Dollars ($2,000,000.00) annually.  The formula to be used for the percentage adjustment shall be thirty percent (30%) times Two Million Dollars ($2,000,000.00) divided by the credits claimed in the preceding year.  In no event shall the credit be claimed more than once by a taxpayer each taxable year.
C.  In the event the total tax credits authorized by this section exceed Two Million Dollars ($2,000,000.00) in any calendar year, the Oklahoma Tax Commission shall permit any excess over Two Million Dollars ($2,000,000.00) but shall factor such excess into the percentage adjustment formula for subsequent years.
D.  The credits authorized by this act may only be claimed for taxable years beginning after December 31, 2006, and ending before January 1, 2010.  The provisions of this subsection shall not be applicable to any credits earned, but not utilized, prior to ~~the effective date of this act~~ January 1, 2006.
E.  If the credit allowed pursuant to this section exceeds the amount of state income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of credit allowed but not used in any taxable year may be carried forward as a credit against subsequent income tax liability for a period not exceeding six (6) years following the year in which the investment was originally made.
F.  The Oklahoma Tax Commission shall have the authority to prescribe forms for purposes of claiming the credit authorized by this section.  The Oklahoma Tax Commission shall be authorized to conduct an investigation of the relevant facts as may be required in order to verify the eligibility of a claimant to receive a credit for any applicable income tax year.
G.  1.  For any taxable year during which a taxpayer sells or otherwise disposes of the ownership interest for which a tax credit has previously been allowed to the taxpayer or for which a tax credit will be allowed to the taxpayer for the year in which the sale or other disposition of the ownership interest is made, the taxpayer shall be required to reduce the cost of the ownership interest in the Oklahoma producer-owned agricultural processing cooperative, venture, or marketing association, as reported upon the applicable income tax return, by the amount of the tax credit which has previously been granted or for which the taxpayer is claiming credit if the credit is allowable for the year during which the sale or other disposition is made.
2.  If a taxpayer sells or otherwise disposes of an ownership interest in the Oklahoma producer-owned agricultural processing cooperative, venture, or marketing association for which the tax credit authorized by this section may be taken in a taxable year following the year in which the ownership interest in the Oklahoma producer-owned agricultural processing cooperative, venture, or marketing association is sold or otherwise disposed of, the credit authorized by this section shall be reduced to account for the prior sale or other disposition.
H.  The tax credit authorized by this section shall not be available or taken for any calendar year during which the claimant of the credit received any incentive payments pursuant to the Oklahoma Quality Jobs Program Act or the Saving Quality Jobs Act.
I.  As used in this section:
1.  "Direct investment" means the payment of money in an Oklahoma producer-owned agricultural processing cooperative, venture, or marketing association or the transfer of any form of economic value, whether tangible or intangible, other than money;
2.  "Oklahoma producer-owned agricultural processing cooperative" means a legal entity in the nature of a partnership or business undertaking agricultural transactions or agricultural commercial enterprises for mutual profit which are owned and controlled by Oklahoma agricultural producers.  An Oklahoma producer-owned agricultural processing cooperative requires a community of interest in the performance of the undertaking, transaction or enterprise, a right to direct and govern the policy in connection therewith and the duty, which may be altered by agreement, to share both in profit and losses.  The term does not include a cooperative that provides only, and nothing more than, storage, cleaning, or transportation of agricultural commodities;
3.  "Oklahoma producer-owned agricultural processing venture" means a legal entity in the nature of a corporation or company organized to invest in or operate an agricultural commodity processing facility operated primarily for the processing or production of marketable products from agricultural commodities.  The term shall include a dairy operation that requires a depreciable investment of at least Two Hundred Fifty Thousand Dollars ($250,000.00) and which produces milk from dairy cows.  The term does not include a venture that provides only, and nothing more than, storage, cleaning, or transportation of agricultural commodities;
4.  "Oklahoma producer-owned agricultural processing marketing association" means:
a.	a legal entity owned by Oklahoma producers of agricultural commodities and organized to jointly market agricultural commodities and/or natural-resource-based recreational activities, facilitate the marketing process and to promote and stimulate the processing, sales, and marketing of agricultural commodities, or
b.	a legal entity owned by Oklahoma producers of agricultural commodities and organized for collective marketing and improvement of land for natural-resource-based recreational activity;
The term does not include a marketing association that provides only, and nothing more than, storage, cleaning, or transportation of agricultural commodities;
5.  "Oklahoma agricultural producer" means any person who produces agricultural commodities in this state;
6.  "Oklahoma-based corporation or partnership" means an entity created pursuant to the Oklahoma General Corporation Act or other laws of the state authorizing either a corporate entity or an entity with limited liability or any form of partnership, whether general, limited or other authorized partnership form having either its principal place of business within the state or substantial assets located within the state.  For the purpose of this section, the definition contained in this paragraph shall not include an Oklahoma-based corporation or partnership that engages only in and nothing more than the storage, cleaning, and transportation or production of its commodity;
7.  "Agricultural commodities" means a farm or ranch product, including but not limited to, wheat, corn, soybeans, cotton, timber, cattle, hogs, sheep, horses, poultry, animals of the families bovidae, cervidae and antilocapridae or birds of the ratite group produced in farming or ranching operations or a product of such crop or livestock in its unmanufactured state such as ginned cotton, wool-dip, maple syrup, milk and eggs, or any other commodity listed under any Industry Group Number under Major Group 20 of Division D of the Standard Industrial Classification (SIC) Manual; and
8.  "Dairy operation" means and includes equipment and facilities to store and prepare feed, dairy cows, milking parlors, bulk cooling tanks, buildings, and all such depreciable investment commonly utilized in the dairy industry.
J.  For purposes of this section, an agricultural commodity shall be deemed to be produced within this state if it is substantially produced, by any person, partnership, company, association or corporation:
1.  Authorized to do and doing business under the laws of this state;
2.  Paying all taxes duly assessed; and
3.  Domiciled within this state by having a location of production within this state.
K.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 11.     AMENDATORY     68 O.S. 2011, Section 2357.26, is amended to read as follows:
Section 2357.26.  A.  Except as otherwise provided by subsection G of this section, for tax years beginning after December 31, 2001, there shall be allowed a credit against the tax imposed by Section 2355 of this title for employers incurring eligible expenses in connection with the provision of child care services.
B.  As used in this section:
1.  "Eligible expenses" means amounts paid for:
a.	the purchase of qualifying child care services that are actually provided to children of employees, at a program licensed by the Department of Human Services with a rating of two stars or higher pursuant to rules promulgated by the Department, at a:
(1)	child care center, or
(2)	family child care home,
b.	planning, preparing a site and constructing a child care center,
c.	renovating or remodeling a structure to be used for a child care center,
d.	purchasing equipment necessary for use by a child care center,
e.	expanding a child care center,
f.	maintaining and operating a child care center, including paying direct administrative and staff costs,
g.	purchasing child care slots actually provided or reserved for children of employees, or
h.	fees and grants provided to child care resource and referral organizations doing business within this state; and
2.  "Employer" means a taxpayer who employs one or more full-time-equivalent employees and whose primary source of income is from a business other than the business of providing child care services.
C.  In lieu of a deduction from taxable income, the credit allowed by subsection A of this section shall be twenty percent (20%) of the amount of eligible expenses.
D.  The amount of eligible expenses upon which the credit will be based in any taxable year shall be limited to:
1.  Three Thousand One Hundred Dollars ($3,100.00) for expenses described in subparagraph a of paragraph 1 of subsection B of this section for each child of an employee receiving qualifying child care services;
2.  Fifty Thousand Dollars ($50,000.00) for expenses described in subparagraphs b through g of paragraph 1 of subsection B of this section; and
3.  Five Thousand Dollars ($5,000.00) for expenses described in subparagraph h of paragraph 1 of subsection B of this section.
E.  Any credits allowed but not used in any tax year may be carried over in order to each of the four (4) tax years following the year of qualification.
F.  The Oklahoma Tax Commission, on or before January 31 of each year, shall submit a report regarding the credit authorized by this section to both houses of the Oklahoma Legislature.  Such report shall summarize the total amount of credits claimed and likely to be claimed and allowed under this section.
G.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 12.     AMENDATORY     68 O.S. 2011, Section 2357.27, is amended to read as follows:
Section 2357.27.  A.  Except as otherwise provided by subsection E of this section, for tax years beginning after December 31, 1998 there shall be allowed a credit against the tax imposed by Section 2355 of this title for eligible expenses incurred by entities primarily engaged in the business of providing child care services.
B.  As used in this section, "eligible expenses" means amounts paid by an entity primarily engaged in the business of providing child care services for expenses incurred by the entity to comply with the standards promulgated by a national accrediting association recognized by the Department of Human Services and which would not have been incurred by the entity to comply with the Oklahoma Child Care Facilities Licensing Act.
C.  The credit allowed by subsection A of this section shall be twenty percent (20%) of the amount of eligible expenses.  Such credit shall not be allowed for any amounts for which the entity claims or receives an income tax credit, exemption or deduction.
D.  Any credits allowed but not used in any tax year may be carried over in order to each of the four (4) tax years following the year of qualification.
E.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 13.     AMENDATORY     68 O.S. 2011, Section 2357.30, is amended to read as follows:
Section 2357.30.  A.  As used in this section, "small business" means any corporation, partnership, sole proprietorship or other business entity qualifying as "small" under the standards contained in Section 121 of Title 13 of the Code of Federal Regulations (13 C.F.R., Section 121).
B.  Except as otherwise provided in subsection E of this section, for taxable years beginning after December 31, 1998, every small business operating within this state shall be entitled to claim as a credit against the tax imposed by Section 2355 of ~~Title 68 of the Oklahoma Statutes~~ this title, subject to the limitations provided by subsection C of this section, any amount paid to the U.S. Small Business Administration as a guaranty fee pursuant to the obtaining of financing guaranteed by the Small Business Administration.
C.  The credit authorized by this section shall only be claimed against the tax liability resulting from income generated by the small business.  If an income tax return upon which this credit is claimed includes taxable income from sources other than the small business, the credit shall only be allowed to be claimed upon a percentage of the income tax liability which does not exceed the percentage of income generated by the small business as compared to the total Oklahoma adjusted gross income shown on the return.  The Oklahoma Tax Commission shall promulgate rules and prescribe forms to implement the provisions of this section.
D.  If the credit authorized by this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer as computed pursuant to the provisions of subsection C of this section, the amount of the credit not used may be carried forward as a credit against subsequent income tax liability for a period not to exceed five (5) years.  The credit shall be claimable only by the small business which is the primary obligor in the financing transaction and which actually paid the guaranty fee.
E.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 14.     AMENDATORY     68 O.S. 2011, Section 2357.32A, is amended to read as follows:
Section 2357.32A.  A.  Except as otherwise provided in subsection H of this section, for tax years beginning on or after January 1, 2003, there shall be allowed a credit against the tax imposed by Section 2355 of this title to a taxpayer for the taxpayer's production and sale to an unrelated person of electricity generated by zero-emission facilities located in this state.  As used in this section:
1.  "Electricity generated by zero-emission facilities" means electricity that is exclusively produced by any facility located in this state with a rated production capacity of one megawatt (1 mw) or greater, constructed for the generation of electricity and placed in operation after June 4, 2001, which utilizes eligible renewable resources as its fuel source.  The construction and operation of such facilities shall result in no pollution or emissions that are or may be harmful to the environment, pursuant to a determination by the Department of Environmental Quality; and
2.  "Eligible renewable resources" means resources derived from:
a.	wind,
b.	moving water,
c.	sun, or
d.	geothermal energy.
B.  For facilities placed in operation on or after January 1, 2003, and before January 1, 2007, the electricity generated on or after January 1, 2003, but prior to January 1, 2004, the amount of the credit shall be seventy-five one hundredths of one cent ($0.0075) for each kilowatt-hour of electricity generated by zero-emission facilities.  For electricity generated on or after January 1, 2004, but prior to January 1, 2007, the amount of the credit shall be fifty one hundredths of one cent ($0.0050) per kilowatt-hour for electricity generated by zero-emission facilities.  For electricity generated on or after January 1, 2007, but prior to January 1, 2012, the amount of the credit shall be twenty-five one hundredths of one cent ($0.0025) per kilowatt-hour of electricity generated by zero-emission facilities.  For facilities placed in operation on or after January 1, 2007, and before January 1, 2016, for the electricity generated by these facilities the amount of the credit shall be fifty one hundredths of one cent ($0.0050) for each kilowatt-hour of electricity generated by zero-emission facilities.
C.  Credits may be claimed with respect to electricity generated on or after January 1, 2003, during a ten-year period following the date that the facility is placed in operation on or after June 4, 2001.
D.  If the credit allowed pursuant to this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of the credit allowed but not used in any tax year may be carried forward as a credit against subsequent income tax liability for a period not exceeding ten (10) years.
E.  Any nontaxable entities, including agencies of the State of Oklahoma or political subdivisions thereof, shall be eligible to establish a transferable tax credit in the amount provided in subsection B of this section.  Such tax credit shall be a property right available to a state agency or political subdivision of this state to transfer or sell to a taxable entity, whether individual or corporate, who shall have an actual or anticipated income tax liability under Section 2355 of this title.  These tax credit provisions are authorized as an incentive to the State of Oklahoma, its agencies and political subdivisions to encourage the expenditure of funds in the development, construction and utilization of electricity from zero-emission facilities as defined in subsection A of this section.
F.  The amount of the credit allowed, but not used, shall be freely transferable at any time during the ten (10) years following the year of qualification.  Any person to whom or to which a tax credit is transferred shall have only such rights to claim and use the credit under the terms that would have applied to the entity by whom or by which the tax credit was transferred.  The provisions of this subsection shall not limit the ability of a tax credit transferee to reduce the tax liability of the transferee, regardless of the actual tax liability of the tax credit transferor, for the relevant taxable period.  The transferor initially allowed the credit and any subsequent transferees shall jointly file a copy of any written transfer agreement with the Oklahoma Tax Commission within thirty (30) days of the transfer.  The written agreement shall contain the name, address and taxpayer identification number or social security number of the parties to the transfer, the amount of the credit being transferred, the year the credit was originally allowed to the transferor, and the tax year or years for which the credit may be claimed.  The Tax Commission may promulgate rules to permit verification of the validity and timeliness of the tax credit claimed upon a tax return pursuant to this subsection but shall not promulgate any rules that unduly restrict or hinder the transfers of such tax credit.  The tax credit allowed by this section, upon the election of the taxpayer, may be claimed as a payment of tax, a prepayment of tax or a payment of estimated tax for purposes of Section 1803 or Section 2355 of this title.
G.  For electricity generation produced and sold in a calendar year, the tax credit allowed by the provisions of this section, upon election of the taxpayer, shall be treated and may be claimed as a payment of tax, a prepayment of tax or a payment of estimated tax for purposes of Section 2355 of this title on or after July 1 of the following calendar year.
H.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable until the provisions of this subsection shall cease to be operative on July 1, 2011.~~  ~~Beginning July 1, 2011, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010, according to the provisions of this section.~~ except as provided in this subsection:
1.  Any tax credits which accrue during the period of July 1, 2010, through June 30, 2011, may not be claimed for any period prior to the taxable year beginning January 1, 2012.  No credits which accrue during the period of July 1, 2010, through June 30, 2011, may be used to file an amended tax return for any taxable year prior to the taxable year beginning January 1, 2012;
2.  Any tax credits which accrue during the period of July 1, 2011, through June 30, 2012, may be claimed as provided in subsections A through G of this section; and
3.  Any tax credits which accrue during the period beginning on or after July 1, 2012, shall not be allowed for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 15.     AMENDATORY     68 O.S. 2011, Section 2357.32B, is amended to read as follows:
Section 2357.32B.  A.  Except as otherwise provided by subsection G of this section, for tax years beginning on or after January 1, 2003, and ending on or before December 31, 2012, there shall be allowed a credit against the tax imposed by Section 624 or 628 of Title 36 of the Oklahoma Statutes, and actually paid to and placed into the General Revenue Fund, or Section 2370 or 2355 of this title to Oklahoma manufacturers of advanced small wind turbines.  As used in this section:
1.  "Oklahoma manufacturers" means manufacturers who operate facilities located in this state which have the capability to manufacture small wind turbine products, including rotor blade and alternator fabrication; and
2.  "Advanced small wind turbines" means upwind, furling wind turbines that meet the following requirements:
a.	have a rated capacity of at least one kilowatt (1 kw) but not greater than fifty kilowatts (50 kw),
b.	incorporate advanced technologies such as new airfoils, new generators, and new power electronics, variable speed,
c.	at least one unit of each model has undergone testing at the US-DOE National Wind Technology Center, and
d.	comply with appropriate interconnection safety standards of the Institute of Electrical and Electronics Engineers applicable to small wind turbines.
B.  The amount of the credit shall be based on the square footage of rotor swept area of advanced small wind turbines manufactured in this state.  The amount of the credit shall be Twenty-five Dollars ($25.00) per square foot produced in calendar year 2003, Twelve Dollars and fifty cents ($12.50) per square foot produced in calendar year 2004, and Twenty-five Dollars ($25.00) per square foot produced in calendar years 2005 through 2012.
C.  The companies claiming the credit allowed by this section shall agree in advance to allow their production and claims to be audited by the Oklahoma Tax Commission and they must be able to show that they have made economic development investments in this state over the period of time for which the credit was claimed that exceed the net proceeds from the amount of credit claimed.
D.  If the amount of the credits allowed pursuant to this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of the credit allowed but not used in any taxable year may be carried forward as a credit against subsequent income tax liability for a period not exceeding ten (10) years.
E.  The amount of the credit allowed but not used shall be freely transferable at any time during the ten (10) years following the year of qualification.  Any person to whom or to which a tax credit is transferred shall have only such rights to claim and use the credit under the terms that would have applied to the entity by whom or by which the tax credit was transferred.  The provisions of this subsection shall not limit the ability of a tax credit transferee to reduce the tax liability of the transferee regardless of the actual tax liability of the tax credit transferor for the relevant taxable period.  The transferor originally allowed the credit and the subsequent transferee shall jointly file a copy of the written credit transfer agreement with the Tax Commission within thirty (30) days of the transfer.  The written agreement shall contain the name, address and taxpayer identification number of the parties to the transfer, the amount of the credit being transferred, the year the credit was originally allowed to the transferor and the tax year or years for which the credit may be claimed.  The Tax Commission may promulgate rules to permit verification of the validity and timeliness of a tax credit claimed upon a tax return pursuant to this subsection but shall not promulgate any rules that unduly restrict or hinder the transfers of such tax credit.
F.  For advanced small wind turbines produced in a calendar year, the tax credit allowed by the provisions of this section, upon election of the taxpayer, shall be treated and may be claimed as a payment of tax, a prepayment of tax or a payment of estimated tax for purposes of Section 624 or 628 of Title 36 of the Oklahoma Statutes, and actually paid to and placed into the General Revenue Fund, or Section 2370 or 2355 of this title on or after July 1 of the following calendar year.
G.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 16.     AMENDATORY     68 O.S. 2011, Section 2357.33, is amended to read as follows:
Section 2357.33.  A.  Except as otherwise provided by subsection E of this section, for taxable years beginning after December 31, 1999, there shall be allowed a credit against the tax imposed by Section 2355 of this title for amounts paid by a taxpayer operating one or more food service establishments for immunizations against Hepatitis A for employees of the taxpayer who work in such establishments.
B.  As used in this section, "food service establishment" means an establishment where food or drink is offered for sale or sold to the public and which is licensed pursuant to the provisions of Section 1-1118 of Title 63 of the Oklahoma Statutes.
C.  The amount of the credit allowed pursuant to the provisions of this section for each employee of the taxpayer shall not exceed the usual and customary fee that would be allowed for an immunization against Hepatitis A as approved by the State and Education Employees Group Insurance Board.
D.  The credit provided by this section shall be available to the taxpayer in the tax year in which an employee was immunized and shall not carry forward to subsequent tax years.  Such credit shall not be refunded to the taxpayer.
E.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 17.     AMENDATORY     68 O.S. 2011, Section 2357.41, is amended to read as follows:
Section 2357.41.  A.  Except as otherwise provided by subsection I of this section, for tax years beginning after December 31, 2000, there shall be allowed a credit against the tax imposed by Sections 2355 and 2370 of this title or that portion of the tax imposed by Section 624 or 628 of Title 36 of the Oklahoma Statutes that would otherwise have been apportioned to the General Revenue Fund for qualified rehabilitation expenditures incurred in connection with any certified historic hotel or historic newspaper plant building located in an increment or incentive district created pursuant to the Local Development Act or for qualified rehabilitation expenditures incurred after January 1, 2006, in connection with any certified historic structure.
B.  The amount of the credit shall be one hundred percent (100%) of the federal rehabilitation credit provided for in Section 47 of Title 26 of the United States Code.  The credit authorized by this section may be claimed at any time after the relevant local governmental body responsible for doing so issues a certificate of occupancy or other document that is a precondition for the applicable use of the building or structure that is the basis upon which the credit authorized by this section is claimed.
C.  All requirements with respect to qualification for the credit authorized by Section 47 of Title 26 of the United States Code shall be applicable to the credit authorized by this section.
D.  If the credit allowed pursuant to this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of the credit allowed but not used in any taxable year may be carried forward as a credit against subsequent income tax liability for a period not exceeding ten (10) years following the qualified expenditures.
E.  All rehabilitation work to which the credit may be applied shall be reviewed by the State Historic Preservation Office which will in turn forward the information to the National Park Service for certification in accordance with 36 C.F.R., Part 67.  A certified historic structure may be rehabilitated for any lawful use or uses, including without limitation mixed uses and still retain eligibility for the credit provided for in this section.
F.  The amount of the credit allowed for any credit claimed for a certified historic hotel or historic newspaper plant building or any certified historic structure, but not used, shall be freely transferable, in whole or in part, to subsequent transferees at any time during the five (5) years following the year of qualification.  Any person to whom or to which a tax credit is transferred shall have only such rights to claim and use the credit under the terms that would have applied to the entity by whom or by which the tax credit was transferred.  The provisions of this subsection shall not limit the ability of a tax credit transferee to reduce the tax liability of the transferee regardless of the actual tax liability of the tax credit transferor for the relevant taxable period.  The transferor of the credit and the transferee shall jointly file a copy of the written credit transfer agreement with the Oklahoma Tax Commission within thirty (30) days of the transfer.  Such filing of the written credit transfer agreement with the Oklahoma Tax Commission shall perfect such transfer.  The written agreement shall contain the name, address and taxpayer identification number of the parties to the transfer, the amount of credit being transferred, the year the credit was originally allowed to the transferor, the tax year or years for which the credit may be claimed, and a representation by the transferor that the transferor has neither claimed for its own behalf nor conveyed such credits to any other transferee.  The Tax Commission shall develop a standard form for use by subsequent transferees of the credit demonstrating eligibility for the transferee to reduce its applicable tax liabilities resulting from ownership of the credit.  The Tax Commission shall develop a system to record and track the transfers of the credit and certify the ownership of the credit and may promulgate rules to permit verification of the validity and timeliness of a tax credit claimed upon a tax return pursuant to this subsection but shall not promulgate any rules which unduly restrict or hinder the transfers of such tax credit.
G.  Notwithstanding any other provisions in this section, on or after January 1, 2009, if a credit allowed pursuant to this section which has been transferred is subsequently reduced as the result of an adjustment by the Internal Revenue Service, Tax Commission, or any other applicable government agency, only the transferor originally allowed the credit and not any subsequent transferee of the credit, shall be held liable to repay any amount of disallowed credit.
H.  As used in this section:
1.  "Certified historic hotel or historic newspaper plant building" means a hotel or newspaper plant building that is listed on the National Register of Historic Places within thirty (30) months of taking the credit pursuant to this section.
2.  "Certified historic structure" means a building that is listed on the National Register of Historic Places within thirty (30) months of taking the credit pursuant to this section or a building located in Oklahoma which is certified by the State Historic Preservation Office as contributing to the historic significance of a certified historic district listed on the National Register of Historic Places, or a local district that has been certified by the State Historic Preservation Office as eligible for listing in the National Register of Historic Places; and
3.  "Qualified rehabilitation expenditures" means capital expenditures that qualify for the federal rehabilitation credit provided in Section 47 of Title 26 of the United States Code and that were paid after December 31, 2000.  Qualified rehabilitation expenditures do not include capital expenditures for nonhistoric additions except an addition that is required by state or federal regulations that relate to safety or accessibility.  In addition, qualified rehabilitation expenditures do not include expenditures related to the cost of acquisition of the property.
I.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable until the provisions of this subsection shall cease to be operative on July 1, 2012~~ except as provided in this subsection.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act ~~occurring on or after July 1, 2010, according to the provisions of this section.~~ as follows:
1.  Any tax credits which accrue during the period of July 1, 2010, through June 30, 2012, may not be claimed for any period prior to the taxable year beginning January 1, 2012.  No credits which accrue during the period of July 1, 2010, through June 30, 2012, may be used to file an amended tax return for any taxable year prior to the taxable year beginning January 1, 2012; and
2.  Any credits accrued on or after July 1, 2012, shall not be allowed for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 18.     AMENDATORY     68 O.S. 2011, Section 2357.45, is amended to read as follows:
Section 2357.45.  A.  1.  For tax years beginning after December 31, 2004, and ending before January 1, 2013, there shall be allowed against the tax imposed by Section 2355 of this title, a credit for any taxpayer who makes a donation to an independent biomedical research institute and for tax years beginning after December 31, 2010, and ending before January 1, 2013, a credit for any taxpayer who makes a donation to a cancer research institute.  For tax years beginning on or after January 1, 2013, the credits provided for in this subsection shall not be allowed for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
2.  The credit authorized by paragraph 1 of this subsection shall be limited as follows:
a.	for calendar year 2007 and all subsequent years, the credit percentage, not to exceed fifty percent (50%), shall be adjusted annually so that the total estimate of the credits does not exceed Two Million Dollars ($2,000,000.00) annually.  The formula to be used for the percentage adjusted shall be fifty percent (50%) times One Million Dollars ($1,000,000.00) divided by the credits claimed in the preceding year for each donation to an independent biomedical research institute and fifty percent (50%) times One Million Dollars ($1,000,000.00) divided by the credits claimed in the preceding year for each donation to a cancer research institute,
b.	in no event shall a taxpayer claim more than one credit for a donation to any independent biomedical research institute and one credit for a donation to a cancer research institute in each taxable year nor shall the credit exceed One Thousand Dollars ($1,000.00) for each taxpayer for each type of donation,
c.	for tax year 2011, no more than Fifty Thousand Dollars ($50,000.00) in total tax credits for donations to a cancer research institute shall be allowed,
d.	in no event shall more than fifty percent (50%) of the Two Million Dollars ($2,000,000.00) in total tax credits authorized by this section, for any calendar year ~~after the effective date of this act~~ beginning on or after January 1, 2011, be allocated for credits for donations to a cancer research institute, and
e.	in the event the total tax credits authorized by this section exceed One Million Dollars ($1,000,000.00) in any calendar year for either a cancer research institute or an independent biomedical research institute, the Oklahoma Tax Commission shall permit any excess over One Million Dollars ($1,000,000.00) but shall factor such excess into the percentage adjustment formula for subsequent years for that type of donation.  However, any such adjustment to the formula for donations to an independent biomedical research institute shall not affect the formula for donations to a cancer research institute, and any such adjustment to the formula for donations to a cancer research institute shall not affect the formula for donations to an independent biomedical research institute.
3.  For purposes of this section, "independent biomedical research institute" means an organization which is exempt from taxation pursuant to the provisions of Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3) whose primary focus is conducting peer-reviewed basic biomedical research.  The organization shall:
a.	have a board of directors,
b.	be able to accept grants in its own name,
c.	be an identifiable institute that has its own employees and administrative staff, and
d.	receive at least Fifteen Million Dollars ($15,000,000.00) in National Institute of Health funding each year.
4.  For purposes of this section, "cancer research institute" means an organization which is exempt from taxation pursuant to the Internal Revenue Code and whose primary focus is raising the standard of cancer clinical care in Oklahoma through peer-reviewed cancer research and education or a not-for-profit supporting organization, as that term is defined by the Internal Revenue Code, affiliated with a tax-exempt organization whose primary focus is raising the standard of cancer clinical care in Oklahoma through peer-reviewed cancer research and education.  The tax-exempt organization whose primary focus is raising the standard of cancer clinical care in Oklahoma through peer-reviewed cancer research and education shall:
a.	either be an independent research institute or a program that is part of a state university which is a member of The Oklahoma State System of Higher Education, and
b.	receive at least Four Million Dollars ($4,000,000.00) in National Cancer Institute funding each year.
B.  In no event shall the amount of the credit exceed the amount of any tax liability of the taxpayer.
C.  Any credits allowed but not used in any tax year may be carried over, in order, to each of the four (4) years following the year of qualification.
D.  The Tax Commission shall have the authority to prescribe forms for purposes of claiming the credit authorized by this section.
SECTION 19.     AMENDATORY     68 O.S. 2011, Section 2357.46, is amended to read as follows:
Section 2357.46.  A.  Except as otherwise provided by subsection G of this section, for tax years beginning after December 31, 2005, there shall be allowed a credit against the tax imposed by Section 2355 of ~~Title 68 of the Oklahoma Statutes~~ this title for eligible expenditures incurred by a contractor in the construction of energy efficient residential property of two thousand (2,000) square feet or less.  The amount of the credit shall be based upon the following:
1.  For any eligible energy efficient residential property constructed and certified as forty percent (40%) or more above the International Energy Conservation Code 2003 and any supplement in effect at the time of completion, the amount of the credit shall be equal to the eligible expenses, not to exceed Four Thousand Dollars ($4,000.00) for the taxpayer who is the contractor; and
2.  For any eligible energy efficient residential property constructed and certified as between twenty percent (20%) and thirty-nine percent (39%) above the International Energy Conservation Code 2003 and any supplement in effect at the time of completion, the credit shall be equal to the eligible expenditures, not to exceed Two Thousand Dollars ($2,000.00) for the taxpayer who is the contractor.
B.  As used in this section:
1.  "Eligible expenditure" means any:
a.	energy efficient heating or cooling system,
b.	insulation material or system which is specifically and primarily designed to reduce the heat gain or loss of a residential property when installed in or on such property,
c.	exterior windows, including skylights,
d.	exterior doors, and
e.	any metal roof installed on a residential property, but only if such roof has appropriate pigmented coatings which are specifically and primarily designed to reduce the heat gain of such dwelling unit and which meet Energy Star program requirements;
2.  "Contractor" means the taxpayer who constructed the residential property or manufactured home, or if more than one taxpayer qualifies as the contractor, the primary contractor; and
3.  "Eligible energy efficient residential property" means a newly constructed residential property or manufactured home property which is located in the State of Oklahoma and substantially complete after December 31, 2005, and which is two thousand (2,000) square feet or less:
a.	for the credit provided pursuant to paragraph 1 of subsection A of this section, which is certified by an accredited Residential Energy Services Network Provider using the Home Energy Rating System to have:
(1)	a level of annual heating and cooling energy consumption which is at least forty percent (40%) below the annual level of heating and cooling energy consumption of a comparable residential property constructed in accordance with the standards of Chapter 4 of the 2003 International Energy Conservation Code, as such code is in effect on ~~the effective date of this act~~ November 1, 2005,
(2)	heating and cooling equipment efficiencies which correspond to the minimum allowed under the regulations established by the Department of Energy pursuant to the National Appliance Energy Conservation Act of 1987 and in effect at the time of construction of the property, and
(3)	building envelope component improvements which account for at least one-fifth of the reduced annual heating and cooling energy consumption levels,
b.	for the credit provided pursuant to paragraph 2 of subsection A of this section, which is certified by an accredited Residential Energy Services Network Provider using the Home Energy Rating System to have:
(1)	a level of annual heating and cooling energy consumption which is between twenty percent (20%) and thirty-nine percent (39%) below the annual level of heating and cooling energy consumption of a comparable residential property constructed in accordance with the standards of Chapter 4 of the 2003 International Energy Conservation Code, as such code is in effect on ~~the effective date of this act~~ November 1, 2005,
(2)	heating and cooling equipment efficiencies which correspond to the minimum allowed under the regulations established by the Department of Energy pursuant to the National Appliance Energy Conservation Act of 1987 and in effect at the time of construction of the property, and
(3)	building envelope component improvements which account for at least one-third of the reduced annual heating and cooling energy consumption levels.
C.  The credit provided for in subsection A of this section may only be claimed once for the contractor of any eligible residential energy efficient property during the taxable year when the property is substantially complete.
D.  If the credit allowed pursuant to this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of credit allowed but not used in any taxable year may be carried forward as a credit against subsequent income tax liability for a period not exceeding four (4) years following the qualified expenditures.
E.  For credits earned on or after ~~the effective date of this act~~ May 26, 2006, the credits authorized by this section shall be freely transferable to subsequent transferees.
F.  The Oklahoma Tax Commission shall promulgate rules necessary to implement this act.
G.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010 ~~for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 20.     AMENDATORY     68 O.S. 2011, Section 2357.47, is amended to read as follows:
Section 2357.47.  A.  1.  Except as otherwise provided in subsection D of this section, for tax years beginning after December 31, 2005, there shall be allowed against the tax imposed by Section 2355 of this title, a credit for eligible wages paid by an employer to an employee.  The amount of the credit shall be ten percent (10%) of the amount of the gross wages paid to the employee for a period not to exceed ninety (90) days but in no event shall the credit exceed Five Thousand Dollars ($5,000.00) for each employee of each taxpayer.  In no event shall the total credit claimed exceed Twenty-five Thousand Dollars ($25,000.00) in any one year for any taxpayer.
2.  Except as otherwise provided by subsection D of this section, for tax years beginning after December 31, 2005, there shall be allowed against the tax imposed by Section 2355 of this title, a credit for eligible modification expenses of an employer.  The amount of the credit shall be fifty percent (50%) of the amount of the funds expended for eligible modification expenses or new tools or equipment but in no event shall the credit exceed One Thousand Dollars ($1,000.00) for eligible modification expenses incurred for any single employee.  In no event shall the total credit claimed exceed Ten Thousand Dollars ($10,000.00) in any year for any taxpayer.
3.  As used in this section:
a.	"employee", "employer", "maximum medical improvement", "treating physician", and "wages" shall be defined as in Section 3 of Title 85 of the Oklahoma Statutes,
b.	"eligible wages" means gross wages paid by an employer to an employee who is injured as a result of an injury which is compensable under the Workers' Compensation Act and which are paid beginning when the employee returns to work with restricted duties as provided by the employee's treating physician or an independent medical examiner before the employee has reached maximum medical improvement, and ending after ninety (90) days or when the employee has reached maximum medical improvement, and
c.	"eligible modification expenses" means expenses incurred by an employer to modify a workplace, tools or equipment or to obtain new tools or equipment and which are incurred by an employer solely to enable a specific injured employee who is injured as a result of an injury which is compensable under the Workers' Compensation Act to return to work with restricted duties as provided by the employee's treating physician or an independent medical examiner before the employee has reached maximum medical improvement, and which workplace, tools or equipment are used primarily by the injured employee.
B.  In no event shall the amount of the credit(s) exceed the amount of any tax liability of the taxpayer.
C.  The Oklahoma Tax Commission shall have the authority to promulgate rules necessary to effectuate the purposes of this section.
D.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 21.     AMENDATORY     68 O.S. 2011, Section 2357.59, is amended to read as follows:
Section 2357.59.  A.  Except as otherwise provided by subsection F of this section, if any person, firm, corporation, partnership or other legal entity has made application or filed an information report on forms prescribed by the Oklahoma Tax Commission to receive a credit against the tax imposed by Section 2355 of this title or Section 624 of Title 36 of the Oklahoma Statutes pursuant to the provisions of Sections 2357.23, 2357.51, 2357.52, 2357.53, 2357.54, 2357.55, 2357.56, 2357.57 or 2357.58 of this title on or before July 1, 1993, such credit may be received notwithstanding the provisions of Section 51 of Senate Bill No. 459 of the 1st Session of the 44th Oklahoma Legislature or that the other requirements for allowance of such credit are not established until after July 1, 1993.
B.  Except as provided in this section, no person, firm, corporation, partnership or other legal entity shall qualify to receive any such credit after July 1, 1993.
C.  For any person, firm, corporation, partnership or other legal entity or its successor who has filed the information report specified in subsection A of this section, for taxable years beginning after December 31, 1995, and ending on or before December 31, 2000, there shall be allowed a credit against the tax imposed by Section 2355 of this title for fifteen percent (15%) of the investment cost of a new qualified recycling facility.  A person, firm, corporation, partnership or other legal entity or its successor which has withdrawn its application or information report specified in subsection A of this section shall not be eligible for such credit.  For purposes of this subsection, a "qualified recycling facility" shall mean buildings, land, improvements, machinery and equipment located in Oklahoma and used in manufacturing as defined by the Standard Industrial Classification Code and at which facility is produced a qualified finished product, provided that up to ten percent (10%) of the square feet of a building may be devoted to office space used to provide clerical support for the manufacturing operation.  Such ten percent (10%) may be in a separate building as long as it is part of the same contiguous tract of property on which the manufacturing facility is located.  For purposes of this subsection, a "qualified finished product" shall mean a marketable product or component thereof which has economic value to the consumer and ninety percent (90%) of which is composed of materials which have been separated, diverted or removed from the waste stream and incorporated into the finished product by any means or method.
D.  The credit provided for in subsection C of this section shall be subject to the following limitations:
1.  The credit shall apply to investment in a qualified recycling facility only if construction or on-site installation of the facility commences on or after January 1, 1996, and before December 31, 1999;
2.  The credit shall only be available if the total cost of the new qualified recycling facility exceeds Twenty Million Dollars ($20,000,000.00) and employs at least seventy-five new full-time-equivalent employees, as certified by the Oklahoma Employment Security Commission;
3.  The credit shall be initially allowed for the tax year in which the qualified recycling facility is placed in service.  However, any credit allowed but not used in any tax year due to the limitation provided in paragraph 4 of this subsection shall be carried over in order, but used only once, to each of the fourteen (14) years following the year of initial allowance; and
4.  The credit shall not be utilized in any tax year to reduce the income tax liability of the owner of the qualified recycling facility for such year by more than fifty percent (50%) of the tax liability calculated from the income of the qualified recycling facility.  For purposes of subsections C and D of this section, the "owner" shall include the user of a qualified recycling facility under a lease with a term of five (5) years or more.
E.  The Oklahoma Tax Commission may promulgate rules in order to implement the provisions of this section including requirements to submit any additional information as deemed necessary to implement and administer this credit.
F.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 22.     AMENDATORY     68 O.S. 2011, Section 2357.81, is amended to read as follows:
Section 2357.81.  A.  Subject to the limitation imposed pursuant to subsection C of Section 842 of Title 62 of the Oklahoma Statutes and except as otherwise provided by subsection F of this section, for taxable years beginning after December 31, 2000, there shall be allowed as a credit against the tax imposed pursuant to Section 2355 of ~~Title 68 of the Oklahoma Statutes~~ this title, an amount equal to one hundred percent (100%) of the amount of ad valorem taxes exempted pursuant to the provisions of Section 860 of Title 62 of the Oklahoma Statutes for an enterprise locating a new facility within or expanding an existing facility within an enterprise zone as designated pursuant to Section 690.2 of ~~Title 68 of the Oklahoma Statutes~~ this title if such facility is also located within an incentive district.
B.  The income tax credit authorized by this section shall only be available, to the extent otherwise allowable and except as otherwise provided by subsection F of this section, for ad valorem taxes for which an exemption has been provided pursuant to Section 860 of Title 62 of the Oklahoma Statutes on or after January 1, 2001.  The county assessor of the county in which the facility is located, or any part of the facility, shall provide an annual certification to the Oklahoma Tax Commission not later than January 31 of each calendar year as to the amount of ad valorem taxes which would have been payable by the owner of the facility without the exemption provided by Section 860 of Title 62 of the Oklahoma Statutes.
C.  In order to claim the credit authorized by this section, the taxpayer shall obtain a certification from the local governing body approving the incentive district which shall be acknowledged by the chief elected official of the local governing body.  The certification shall be signed by the Director of the Oklahoma Department of Commerce or designee, that the facility is located within an enterprise zone.  The signature required by this subsection shall be acknowledged in the manner provided by law.
D.  The credit authorized by this section shall be allowable only to the extent of ad valorem taxes which would have been levied upon the taxable value of real property and improvements physically attached to real property constituting the eligible facility without the exemption provided by Section 860 of Title 62 of the Oklahoma Statutes and shall not be allowable to the extent that the credit is claimed for ad valorem taxes which would have been levied upon the taxable value of personal property of the enterprise even if the incentive granted by the participating governmental entities in the incentive district includes personal property.
E.  If the tax credit authorized by this section exceeds the amount of taxes due or if there are no state taxes due of the taxpayer, the amount of the claim not used as an offset against the taxes of a taxable year may be carried forward for a period not to exceed ten (10) years.
F.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 23.     AMENDATORY     68 O.S. 2011, Section 2357.100, is amended to read as follows:
Section 2357.100.  A.  For taxable years beginning after December 31, 2004, and ending on or before December 31, 2009, there shall be allowed a credit against the tax imposed by Section 2355 of this title for the purchase and transportation of poultry litter.  Subject to the limitations provided in subsection C of this section, the credit shall be available to the purchaser of the poultry litter and shall equal Five Dollars ($5.00) per ton purchased and transported.
B.  Except as provided in subsection F of this section, for taxable years beginning after December 31, 2009, and ending on or before December 31, 2013, there shall be allowed a credit against the tax imposed by Section 2355 of this title for the purchase and transportation of poultry litter.  Subject to the limitations provided in subsection C of this section, the credit shall be available to the purchaser of the poultry litter and shall equal Ten Dollars ($10.00) per ton purchased and transported.
C.  1.  The total of the credits authorized by this section shall not exceed Three Hundred Seventy-five Thousand Dollars ($375,000.00) annually.  The amount of the credit for each purchaser shall be adjusted annually so that the total estimate of the credits authorized by this section does not exceed Three Hundred Seventy-five Thousand Dollars ($375,000.00).  The formula to be used for the percentage adjustment shall be Three Hundred Seventy-five Thousand Dollars ($375,000.00) divided by the credits claimed in the preceding year.  In no event shall the credit be claimed more than once by a taxpayer each taxable year.
2.  In the event the total tax credits authorized by this section exceed Three Hundred Seventy-five Thousand Dollars ($375,000.00) in any calendar year, the Oklahoma Tax Commission shall permit any excess over Three Hundred Seventy-five Thousand Dollars ($375,000.00) but shall factor such excess into the percentage adjustment formula for subsequent years.
D.  In order to qualify for the credit provided for in subsections A and B of this section:
1.  The poultry litter shall only be purchased from an Oklahoma-based poultry operation registered with the State Board of Agriculture and located within an environmentally sensitive and nutrient-limited watershed area as defined in the most recent Oklahoma Water Quality Standards;
2.  The poultry litter shall be used or spread in a watershed that is not environmentally sensitive and nutrient-limited as defined in the most recent Oklahoma Water Quality Standards; and
3.  The poultry litter shall be applied by a certified poultry waste applicator as defined by Section 10-9.1 of Title 2 of the Oklahoma Statutes and in accordance with the provisions of Sections 10-9.16 through 10-9.21 of Title 2 of the Oklahoma Statutes and any rules promulgated by the Oklahoma Department of Agriculture, Food, and Forestry.
E.  The credit allowed by this section shall be available to the taxpayer in the year in which the poultry litter was purchased and transported, provided the taxpayer is found by the Oklahoma Department of Agriculture, Food, and Forestry to have applied the poultry litter in a manner consistent with an Animal Waste Management Plan, as defined in Section 10-9.1 of Title 2 of the Oklahoma Statutes, specifically designed to restore and protect beneficial uses from impairment from nutrients.  If the credit exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of the credit not used as an offset against the income taxes for a year may be carried forward as a credit against subsequent income tax liability for a period not to exceed five (5) years.
F.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 24.     AMENDATORY     68 O.S. 2011, Section 2357.101, is amended to read as follows:
Section 2357.101.  A.  Except as otherwise provided in subsection E of this section, for taxable years beginning after December 31, 2004, there shall be allowed against the tax imposed by Section 2355 of ~~Title 68 of the Oklahoma Statutes~~ this title, a credit equal to twenty-five percent (25%) of the amount of profit made by a taxpayer from investment in an existing Oklahoma film or music project with a production company to pay for production costs that is reinvested by the taxpayer with the production company to pay for the production cost of the production company for a new Oklahoma film or music project.
B.  In no event shall the amount of the credit provided for in subsection A of this section for an eligible taxpayer exceed the tax liability of the taxpayer in a calendar year.
C.  The Oklahoma Tax Commission shall have the authority to prescribe forms for purposes of claiming the credit authorized in subsection A of this section.  The forms shall include, but not be limited to, requests for information that prove who the investment was with, the amount of the original investment and the amount of the profit realized from the investment.
D.  As used in this section:
1.  "Film" means a professional single media, multimedia program or feature, which is not child pornography as defined in subsection A of Section 1024.1 of Title 21 of the Oklahoma Statutes or obscene material as defined in paragraph 1 of subsection B of Section 1024.1 of Title 21 of the Oklahoma Statutes including, but not limited to, national advertising messages that are broadcast on a national affiliate or cable network, fixed on film or digital video, which can be viewed or reproduced and which is exhibited in theaters, licensed for exhibition by individual television stations, groups of stations, networks, cable television stations or other means or licensed for home viewing markets;
2.  "Music project" means a professional recording released on a national or international level, whether via traditional manufacturing or distributing or electronic distribution, using technology currently in use or future technology including, but not limited to, music CDs, radio commercials, jingles, cues, or electronic device recordings;
3.  "Production company" means a person who produces a film or music project for exhibition in theaters, on television or elsewhere;
4.  "Total production cost" includes, but is not limited to:
a.	wages or salaries of persons who have earned income from working on a film or music project in this state, including payments to personal services corporations with respect to the services of qualified performing artists, as determined under Section 62(a)(A) of the Internal Revenue Code,
b.	the cost of construction and operations, wardrobe, accessories and related services,
c.	the cost of photography, sound synchronization, lighting and related services,
d.	the cost of editing and related services,
e.	rental of facilities and equipment, and
f.	other direct costs of producing a film or music project;
5.  "Existing Oklahoma film or music project" means a film or music project produced after July 1, 2005;
6.  "Profit" means the amount made by the taxpayer to be determined as follows:
a.	the gross revenues less gross expenses, including direct production, distribution and marketing costs and an allocation of indirect overhead costs, of the film or music project shall be multiplied by,
b.	a ratio, the numerator of which is Oklahoma production costs, as defined in paragraph 7 of this subsection, and the denominator of which is total production costs, as defined in paragraph 4 of this subsection, which shall be multiplied by,
c.	the percent of the taxpayer's taxable income allocated to Oklahoma in a taxable year, and
d.	subtract from the result of the formula calculated pursuant to subparagraphs a through c of this paragraph the profit made by a taxpayer from investment in an existing Oklahoma film or music project in previous taxable years.  Profit shall include either a net profit or net loss;
7.  "Oklahoma production cost" means that portion of total production costs which are incurred with any qualified vendor;
8.	a.	"Qualified vendor" means an Oklahoma entity which provides goods or services to a production company and for which:
(1)	fifty percent (50%) or more of its employees are Oklahoma residents, and
(2)	fifty percent (50%) or more of gross wages, as reported on Internal Revenue Service Form W-2 or Form 1099, are paid to Oklahoma residents.
b.	For purposes of this paragraph, an employee shall include a self-employed individual reporting income from a qualified vendor on Internal Revenue Service Form 1040.
c.	The Oklahoma Tax Commission shall prescribe forms by which an entity may be certified to a production company as a qualified vendor for purposes of this section; and
9.  "Investment" means costs associated with the original production company.  Film or music projects acquired from an original production company do not qualify as investment under subsection A of this section.
E.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 25.     AMENDATORY     68 O.S. 2011, Section 2357.102, is amended to read as follows:
Section 2357.102.  A.  Except as otherwise provided by subsection G of this section, for taxable years beginning after December 31, 2005, there shall be allowed a credit against the tax imposed by Section 2355 of ~~Title 68 of the Oklahoma Statutes~~ this title for the cost of the purchase of a dry fire hydrant or the cost to provide an acceptable means of water storage for such dry fire hydrant including a pond, tank, or other storage facility with the primary purpose of fire protection within the State of Oklahoma.  The credit shall be equal to fifty percent (50%) of the purchase price of the dry fire hydrant or the actual expenditure for any new water storage construction, equipment, development and installation of the dry hydrant, including pipes, valves, hydrants, and labor for each installation of a dry hydrant or new water storage facility but in no event shall the amount of the credit exceed Five Thousand Dollars ($5,000.00) for each taxpayer.
B.  In order to qualify for the tax credit provided for in subsection A of this section, the dry fire hydrant or new water storage facility must meet the following minimum requirements:
1.  Each body of water or water storage structure must be able to provide two hundred fifty (250) gallons per minute for a continuous two-hour period during a fifty-year drought or freeze at a vertical lift of eighteen (18) feet;
2.  Each dry fire hydrant must be located within twenty-five (25) feet of an all-weather roadway and must be accessible to fire protection equipment; and
3.  Dry fire hydrants shall be located a reasonable distance from other dry or pressurized hydrants.
C.  In no event shall the amount of the credit exceed the amount of any tax liability of the taxpayer.
D.  Any credits allowed but not used in any tax year may be carried over, in order, to each of the four (4) years following the year of qualification.
E.  The Oklahoma Tax Commission and the State Fire Marshal Commission shall promulgate rules to establish the requirements for the construction of a dry fire hydrant or new water storage facility and permit verification of eligibility of a dry fire hydrant or new water storage facility for the credit provided for in subsection A of this section.
F.  As used in this section, "dry fire hydrant" means nonpressurized pipes permanently installed in lakes, farm ponds, and streams that provide a ready means of drawing water.
G.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 26.     AMENDATORY     68 O.S. 2011, Section 2357.104, is amended to read as follows:
Section 2357.104.  A.  Except as otherwise provided by subsection G of this section, for taxable years beginning after December 31, 2005, there shall be allowed a credit against the tax imposed by Section 2355 of this title equal to fifty percent (50%) of an eligible taxpayer's qualified railroad reconstruction or replacement expenditures.
B.  1.  Except as provided in paragraph 2 of this subsection, the amount of the credit shall be limited to the product of Five Hundred Dollars ($500.00) for tax year 2007 and Two Thousand Dollars ($2,000.00) for tax year 2008 and subsequent tax years and the number of miles of railroad track owned or leased within this state by the eligible taxpayer as of the close of the taxable year.
2.  In tax year 2009 and subsequent tax years, a taxpayer may elect to increase the limit provided in paragraph 1 of this subsection to an amount equal to three times the limit specified in paragraph 1 of this subsection for qualified expenditures made in the tax year, provided the taxpayer may only claim one third (1/3) of the credit in any one taxable period.
C.  The credit allowed pursuant to subsection A of this section but not used shall be freely transferable, by written agreement, to subsequent transferees at any time during the five (5) years following the year of qualification.  An eligible transferee shall be any taxpayer subject to the tax imposed by Section 2355 of this title.  The person originally allowed the credit and the subsequent transferee shall jointly file a copy of the written credit transfer agreement with the Oklahoma Tax Commission within thirty (30) days of the transfer.  The written agreement shall contain the name, address and taxpayer identification number of the parties to the transfer, the amount of credit being transferred, the year the credit was originally allowed to the transferring person and the tax year or years for which the credit may be claimed.  The Tax Commission shall promulgate rules to permit verification of the timeliness of a tax credit claimed upon a tax return pursuant to this subsection but shall not promulgate any rules which unduly restrict or hinder the transfers of such tax credit.  The Department of Transportation shall promulgate rules to permit verification of the eligibility of an eligible taxpayer's expenditures for the purpose of claiming the credit.  The rules shall provide for the approval of qualified railroad reconstruction or replacement expenditures prior to commencement of a project and provide a certificate of verification upon completion of a project that uses qualified railroad reconstruction or replacement expenditures.  The certificate of verification shall satisfy all requirements of the Tax Commission pertaining to the eligibility of the person claiming the credit.
D.  Any credits allowed pursuant to the provisions of subsection A of this section but not used in any tax year may be carried over in order to each of the five (5) years following the year of qualification.
E.  A taxpayer who elects to increase the limitation on the credit under paragraph 2 of subsection B of this section shall not be granted additional credits under subsection A of this section during the period of such election.
F.  As used in this section:
1.  "Class II and Class III railroad" means a railroad that is classified by the United States Surface Transportation Board as a Class II or Class III railroad;
2.  "Eligible taxpayer" means any Class II or Class III railroad; and
3.  "Qualified railroad reconstruction or replacement expenditures" means expenditures for:
a.	reconstruction or replacement of railroad infrastructure including track, roadbed, bridges, industrial leads and track-related structures owned or leased by a Class II or Class III railroad as of January 1, 2006, or
b.	new construction of industrial leads, switches, spurs and sidings and extensions of existing sidings by a Class II or Class III railroad.
G.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 27.     AMENDATORY     68 O.S. 2011, Section 2357.203, is amended to read as follows:
Section 2357.203.  A. As used in this section:
1.  "Nonqualified operating expenditures" means labor costs, salary and other compensation, whether direct or indirect, paid to directors, officers, limited liability company members, limited liability company managers, partners or other principals or employees of the business entity;
2.  "Qualified direct costs" means expenditures, other than nonqualified operating expenditures, to construct dog kennels, fences, pens, training areas for canines, structures for office space or other improvements to real property necessary for the proper training of a specially trained canine, including the cost of food, water, veterinary expenses and other costs directly related to the operation of the training facility; and
3.  "Specially trained canines" means dogs that are raised by a person who is officially licensed as a dog breeder by the United States Department of Agriculture.
B.  Except as provided in subsection F of this section, for taxable years beginning after December 31, 2005, there shall be allowed a credit against the tax imposed pursuant to Section 2355 of ~~Title 68 of the Oklahoma Statutes~~ this title in the amount of fifty percent (50%) of the qualified direct costs associated with the operation of a business enterprise the principal purpose of which is the rearing of specially trained canines.
C.  The provisions of this section shall not be applicable to nonqualified operating expenditures.
D.  The credit authorized by this section shall not be used to reduce the tax liability of the taxpayer to less than zero (0).  Any credits authorized by this section claimed for a taxable year which are unable to be used may be carried over, in order, to each of the five (5) subsequent taxable years.
E.  The Oklahoma Tax Commission shall be authorized to prescribe such forms as may be necessary in order to administer the tax credit authorized by this section.  The Tax Commission may request such additional documentation as may be required from the taxpayer in order to verify the eligibility for the credit authorized by this section.
F.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 28.     AMENDATORY     68 O.S. 2011, Section 2357.206, is amended to read as follows:
Section 2357.206.  A.  This act shall be known and may be cited as the "Oklahoma Equal Opportunity Education Scholarship Act".
B.  1.  Except as provided in subsection E of this section, after ~~the effective date of this act~~ May 16, 2011, there shall be allowed a credit for any taxpayer who makes a contribution to an eligible scholarship-granting organization.  The credit shall be equal to fifty percent (50%) of the total amount of contributions made during a taxable year, not to exceed One Thousand Dollars ($1,000.00) for single individuals, Two Thousand Dollars ($2,000.00) for married individuals filing jointly, or One Hundred Thousand Dollars ($100,000.00) for any taxpayer which is a legal business entity including limited and general partnerships, corporations, and limited liability companies; provided, if total credits claimed pursuant to this paragraph exceed the caps established pursuant to paragraph 2 of this subsection, the credit shall be equal to the taxpayer's proportionate share of the cap for the taxable year, as determined pursuant to subsection G of this section.
2.	a.	The total credits authorized by paragraph 1 of this subsection for all single individuals and married individuals filing jointly shall not exceed One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00) annually.
b.	The total credits authorized by paragraph 1 of this subsection for all other taxpayers not subject to subparagraph a of this paragraph shall not exceed One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00) annually.
c. 	Each cap on total credits as provided for in this paragraph shall be allocated by the Oklahoma Tax Commission as provided in subsection G of this section.
C.  1.  Except as provided in subsection E of this section, after ~~the effective date of this act~~ May 16, 2011, there shall be allowed a credit for any taxpayer who makes a contribution to an eligible educational improvement grant organization.  The credit shall be equal to fifty percent (50%) of the total amount of contributions made during a taxable year, not to exceed One Thousand Dollars ($1,000.00) for single individuals, Two Thousand Dollars ($2,000.00) for married individuals filing jointly, or One Hundred Thousand Dollars ($100,000.00) for any taxpayer which is a legal business entity including limited and general partnerships, corporations, and limited liability companies; provided, if total credits claimed pursuant to this paragraph exceed the cap established pursuant to paragraph 3 of this subsection, the credit shall be equal to the taxpayer's proportionate share of the cap for the taxable year, as determined pursuant to subsection G of this section.
2.  For any taxpayer who makes a contribution to an eligible educational improvement grant organization and makes a written commitment to contribute the same amount for two (2) additional consecutive years the credit shall be equal to seventy-five percent (75%) of the total amount of the contribution established in paragraph 1 of this subsection, not to exceed the amounts established in paragraph 1 of this subsection for the taxable year in which the credit provided in this subsection is claimed; provided, if total credits claimed pursuant to this paragraph exceed the cap established pursuant to paragraph 3 of this subsection, the credit shall be equal to the taxpayer's proportionate share of the cap for the taxable year, as determined pursuant to subsection G of this section.  The taxpayer shall provide evidence of the written commitment to the Oklahoma Tax Commission at the time of filing the refund claim.
3.	a.	The total credits authorized by paragraph 1 of this subsection for all single individuals, married individuals filing jointly and for all other taxpayers shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000.00) annually.
b.	The cap on total credits as provided for in this paragraph shall be allocated by the Oklahoma Tax Commission as provided in subsection G of this section.
D.  For credits claimed for eligible contributions made during tax year 2014 and thereafter, a credit shall not be allowed by the Oklahoma Tax Commission for contributions made to a scholarship-granting organization or an educational improvement grant organization if that organization's percentage of funds actually awarded is less than ninety percent (90%).  For purposes of this section, the "percentage of funds actually awarded" shall be determined by dividing the total amount of funds actually awarded as educational scholarships or educational improvement grants over the most recent twenty-four (24) months by the total amount available to award as educational scholarships or educational improvement grants over the most recent twenty-four (24) months.
E.  Any tax credits which are earned by a taxpayer pursuant to this section during the time period beginning on ~~the effective date of this act~~ May 16, 2011, through December 31, 2012, may not be claimed for any period prior to the taxable year beginning January 1, 2013.  No credits which accrue during the time period beginning on ~~the effective date of this act~~ May 16, 2011, through December 31, 2012, may be used to file an amended tax return for any taxable year prior to the taxable year beginning January 1, 2013.  For any tax credits which are earned by a taxpayer during the time period beginning on or after January 1, 2013, the credit provided for pursuant to this section shall not be allowed for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
F.  As used in this section:
1.  "Eligible student" means a child of school age who is lawfully present in the United States and who is a member of a household in which the total annual income during the preceding tax year does not exceed an amount equal to three hundred percent (300%) of the income standard used to qualify for a free or reduced school lunch or who, during the immediately preceding school year, attended or, by virtue of the location of such student's place of residence, was eligible to attend a public school in this state which has been identified for school improvement as determined by the State Board of Education pursuant to the requirements of the No Child Left Behind Act of 2001, P.L. No. 107-110.  Once a student has received an educational scholarship, as defined in paragraph 3 of this subsection, the student and any siblings who are members of the same household shall remain eligible until they graduate from high school or reach twenty-one (21) years of age, whichever occurs first;
2.  "Eligible special needs student" means a child of school age who has attended public school in our state with an individualized education program pursuant to the Individuals With Disabilities Education Act, 20 U.S.C.A., Section 1400 et seq.;
3.  "Educational scholarships" means:
a.	scholarships to an eligible student of up to Five Thousand Dollars ($5,000.00) or eighty percent (80%) of the average per-pupil expenditure in the school district where the recipient student resides, whichever is greater, to cover all or part of the tuition, fees and transportation costs of a qualified school which is accredited by the State Board of Education or an accrediting association approved by the Board pursuant to Section 3-104 of Title 70 of the Oklahoma Statutes, or
b.	scholarships to an eligible special needs student of up to Twenty-five Thousand Dollars ($25,000.00) to cover all or part of the tuition, fees and transportation costs of a qualified school for eligible special needs students which is accredited by the State Board of Education or an accrediting association approved by the Board pursuant to Section 3-104 of Title 70 of the Oklahoma Statutes;
4.  "Low-income eligible student" means an eligible student or eligible special needs student who qualifies for a free or reduced-price lunch;
5.  "Qualified school" means an elementary or secondary private school in this state, including schools which provide prekindergarten educational programs for four-year-olds, which:
a.	is accredited by the State Board of Education or an accrediting association approved by the Board pursuant to Section 3-104 of Title 70 of the Oklahoma Statutes,
b.	is in compliance with all applicable health and safety laws and codes,
c.	has a stated policy against discrimination in admissions on the basis of race, color, national origin or disability, and
d.	ensures academic accountability to parents and guardians of students through regular progress reports;
6.  "Qualified school for eligible special needs students" means an elementary or secondary private school in a county in this state;
7.  "Scholarship-granting organization" means an organization which:
a.	is a nonprofit entity exempt from taxation pursuant to the provisions of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
b.	distributes periodic scholarship payments as checks made out to an eligible student's or eligible special needs student's parent or guardian and mailed to the qualified school where the student is enrolled,
c.	spends no more than ten percent (10%) of its annual revenue on expenditures other than educational scholarships as defined in paragraph 3 of this subsection,
d.	spends each year a portion of its expenditures on educational scholarships for low-income eligible students, as defined in paragraph 4 of this subsection, in an amount equal to or greater than the percentage of low-income eligible students in the state,
e.	ensures that scholarships are portable during the school year and can be used at any qualified school that accepts the eligible student or at any qualified school for special needs students that accepts the eligible special needs student,
f.	registers with the Oklahoma Tax Commission as a scholarship-granting organization, and
g.	has policies in place to:
(1)	carry out criminal background checks on all employees and board members to ensure that no individual is involved with the organization who might reasonably pose a risk to the appropriate use of contributed funds, and
(2)	maintain full and accurate records with respect to the receipt of contributions and expenditures of those contributions and supply such records and any other documentation required by the Tax Commission to demonstrate financial accountability;
8.  "Annual revenue" means the total amount or value of contributions received by an organization from taxpayers awarded credits during the organization's fiscal year and all amounts earned from interest or investments;
9.  "Public school" means public schools as defined in Section 1-106 of Title 70 of the Oklahoma Statutes;
10.  "Eligible school" means any public school that is not located within a ten-mile radius of a qualified school in this state, or any public school that is located within a ten-mile radius of a qualified school in this state but offers grade-level instruction different from the qualified school or any public school located within a public school district with fewer than four thousand five hundred (4,500) students;
11.  "Early childhood education program" means a program provided to children who are at least four (4) years of age but not more than five (5) years of age on or before September 1;
12.  "Innovative educational program" means an advanced academic or academic improvement program that is not part of the regular coursework of a public school but that enhances the curriculum or academic program of the school or provides early childhood education programs to students;
13.  "Educational improvement grant" means a grant to an eligible public school to implement an innovative educational program for students, including the ability for multiple public schools to make an application and be awarded a grant to jointly provide an innovative educational program; and
14.  "Educational improvement grant organization" means an organization which:
a.	is a nonprofit entity exempt from taxation pursuant to the provisions of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3), and
b.	contributes at least ninety percent (90%) of its annual receipts as grants to eligible schools for innovative educational programs.  For purposes of this subparagraph, an educational improvement grant organization contributes its annual cash receipts when it expends or otherwise irrevocably encumbers those funds for expenditure during the then current fiscal year of the organization or during the next succeeding fiscal year of the organization.
G.  Total credits authorized by this section shall be allocated as follows:
1.  By January 10 of the year immediately following each calendar year, a scholarship-granting organization or an educational improvement grant organization which accepts contributions pursuant to this section shall provide electronically to the Tax Commission information on each contribution accepted during such taxable year.  At least once each taxable year, the scholarship-granting organization or the educational improvement grant organization shall notify each contributor that Oklahoma law provides for a total, statewide cap on the amount of income tax credits allowed annually;
2.	a.	If the Tax Commission determines the total combined credits claimed for contributions made to scholarship-granting organizations during the most recently completed calendar year by all single individual taxpayers and married individuals filing jointly are in excess of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00), plus any additional amount allocated pursuant to subsection H of this section, the Tax Commission shall determine the percentage of the contribution which establishes the proportionate share of the credit which may be claimed by any taxpayer so that the maximum credits authorized by subparagraph a of paragraph 2 of subsection B of this section are not exceeded.
b.	If the Tax Commission determines the total combined credits claimed for contributions made to scholarship-granting organizations during the most recently completed calendar year by all taxpayers not subject to subparagraph a of this paragraph are in excess of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00), plus any additional amount allocated pursuant to subsection H of this section, the Tax Commission shall determine the percentage of the contribution which establishes the proportionate share of the credit which may be claimed by any taxpayer so that the maximum credits authorized by subparagraph b of paragraph 2 of subsection B of this section are not exceeded.
c.	If the Tax Commission determines the total combined credits claimed for contributions made to educational improvement grant organizations during the most recently completed calendar year by all single individual taxpayers, married individuals filing jointly and all other taxpayers are in excess of One Million Five Hundred Thousand Dollars ($1,500,000.00), plus any additional amount allocated pursuant to subsection H of this section, the Tax Commission shall determine the percentage of the contribution which establishes the proportionate share of the credit which may be claimed by any taxpayer so that the maximum credits authorized by subparagraph a of paragraph 3 of subsection C of this section are not exceeded; and
3.  The Tax Commission shall publish the percentage of the contribution which may be claimed as a credit by contributors for the most recently completed calendar year on the Tax Commission website no later than February 15 of each calendar year for contributions made the previous year.  Each scholarship-granting organization or educational improvement grant organization shall notify contributors of that amount annually.
H.  The provisions of this subsection shall be applicable with respect to any calendar year for which any one of the tax credit pools is fully utilized and for which one or both of the remaining tax credit pool amounts are not fully utilized.
1.  If for any calendar year there is any amount of available credit remaining pursuant to the provisions of paragraph 2 of subsection G of this section, and only one of the other tax credit pools has been fully utilized, the remaining amount from the tax credit pool which was not fully utilized shall be allocated to and added to the total tax credit pool amount for the other tax credit.
2.  If for any calendar year there is any amount of available credit remaining pursuant to the provisions of paragraph 2 of subsection G of this section, and the other two tax credit pools have both been fully utilized, the remaining amount from the tax credit pool which was not fully utilized shall be divided by the whole number two (2) and the resulting amount shall be allocated to and added to the amount of available tax credits for each of the other tax credit pools.
I.  The credit authorized by this section shall not be used to reduce the tax liability of the taxpayer to less than zero (0).
J.  Any credits allowed but not used in any tax year may be carried over, in order, to each of the three (3) years following the year of qualification.
K.  1.  In order to qualify under this section, an educational improvement grant organization shall submit an application with information to the Oklahoma Tax Commission on a form prescribed by the Tax Commission that:
a.	enables the Tax Commission to confirm that the organization is a nonprofit entity exempt from taxation pursuant to the provisions of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3), and
b.	describes the proposed innovative educational program or programs supported by the organization.
2.  The Tax Commission shall review and approve or disapprove the application, in consultation with the State Department of Education.
3.  In order to maintain eligibility under this section, an educational improvement grant organization shall annually report the following information to the Tax Commission by September 1 of each year:
a.	the name of the innovative educational program or programs and the total amount of the grant or grants made to those programs during the immediately preceding school year,
b.	a description of how each grant was utilized during the immediately preceding school year and a description of any demonstrated or expected innovative educational improvements,
c.	the names of the public school and school districts where innovative educational programs that received grants during the immediately preceding school year were implemented,
d.	where the organization collects information on a county-by-county basis, and
e.	the total number and total amount of grants made during the immediately preceding school year for innovative educational programs at public school by each county in which the organization made grants.
4.  The information required under paragraph 3 of this subsection shall be submitted on a form provided by the Tax Commission.  No later than May 1 of each year, the Tax Commission shall annually distribute sample forms together with the forms on which the reports are required to be made to each approved organization.
5.  The Tax Commission shall not require any other information be provided by an organization, except as expressly authorized in this section.
L.  In consultation with the State Department of Education, the Tax Commission shall promulgate rules necessary to implement this act.  The rules shall include procedures for the registration of a scholarship-granting organization or an educational improvement grant organization for purposes of determining if the organization meets the requirements of this act, for the revocation of the
registration of an organization, if applicable, and for notice as required in subsection G of this section.
SECTION 29.     AMENDATORY     68 O.S. 2011, Section 2357.302, is amended to read as follows:
Section 2357.302.  A.  Except as provided in subsection F of this section, for taxable years beginning after December 31, 2008, and ending before January 1, 2015, a qualified employer shall be allowed a credit against the tax imposed pursuant to Section 2355 of this title for tuition reimbursed to a qualified employee.
B.  The credit authorized by subsection A of this section may be claimed only if the qualified employee has been awarded an undergraduate or graduate degree within one (1) year of commencing employment with the qualified employer.
C.  The credit authorized by subsection A of this section shall be in the amount of fifty percent (50%) of the tuition reimbursed to a qualified employee for the first through fourth years of employment.  In no event shall this credit exceed fifty percent (50%) of the average annual amount paid by a qualified employee for enrollment and instruction in a qualified program at a public institution in Oklahoma.
D.  The credit authorized by subsection A of this section shall not be used to reduce the tax liability of the qualified employer to less than zero (0).
E.  No credit authorized by this section shall be claimed after the fourth year of employment.
F.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2011.  Beginning July 1, 2011, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2011, according to the provisions of this section~~ except as provided in this subsection:
1.  Any event, transaction, investment, expenditure or other act occurring on or after July 1, 2011, but before June 30, 2012, for which the credit would otherwise be allowed, may be claimed as provided in subsections A through E of this section; and
2.  Any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, shall not be allowed for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 30.     AMENDATORY     68 O.S. 2011, Section 2357.303, is amended to read as follows:
Section 2357.303.  A.  Except as provided in subsection F of this section, for taxable years beginning after December 31, 2008, and ending before January 1, 2015, a qualified employer shall be allowed a credit against the tax imposed pursuant to Section 2355 of this title for compensation paid to a qualified employee.
B.  The credit authorized by subsection A of this section shall be in the amount of:
1.  Ten percent (10%) of the compensation paid for the first through fifth years of employment in the aerospace sector if the qualified employee graduated from an institution located in this state; or
2.  Five percent (5%) of the compensation paid for the first through fifth years of employment in the aerospace sector if the qualified employee graduated from an institution located outside this state.
C.  The credit authorized by this section shall not exceed Twelve Thousand Five Hundred Dollars ($12,500.00) for each qualified employee annually.
D.  The credit authorized by this section shall not be used to reduce the tax liability of the qualified employer to less than zero (0).
E.  No credit authorized pursuant to this section shall be claimed after the fifth year of employment.
F.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2011.  Beginning July 1, 2011, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2011, according to the provisions of this section~~ except as provided in this subsection:
1.  Any event, transaction, investment, expenditure or other act occurring on or after July 1, 2011, but before June 30, 2012, for which the credit would otherwise be allowed, may be claimed as provided in subsections A through E of this section; and
2.  Any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, shall not be allowed for any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 31.     AMENDATORY     68 O.S. 2011, Section 2358, is amended to read as follows:
Section 2358.  For all tax years beginning after December 31, 1981, taxable income and adjusted gross income shall be adjusted to arrive at Oklahoma taxable income and Oklahoma adjusted gross income as required by this section.
A.  The taxable income of any taxpayer shall be adjusted to arrive at Oklahoma taxable income for corporations and Oklahoma adjusted gross income for individuals, as follows:
1.  There shall be added interest income on obligations of any state or political subdivision thereto which is not otherwise exempted pursuant to other laws of this state, to the extent that such interest is not included in taxable income and adjusted gross income.
2.  There shall be deducted amounts included in such income that the state is prohibited from taxing because of the provisions of the Federal Constitution, the State Constitution, federal laws or laws of Oklahoma.
3.  The amount of any federal net operating loss deduction shall be adjusted as follows:
a.	For carryovers and carrybacks to taxable years beginning before January 1, 1981, the amount of any net operating loss deduction allowed to a taxpayer for federal income tax purposes shall be reduced to an amount which is the same portion thereof as the loss from sources within this state, as determined pursuant to this section and Section 2362 of this title, for the taxable year in which such loss is sustained is of the total loss for such year;
b.	For carryovers and carrybacks to taxable years beginning after December 31, 1980, the amount of any net operating loss deduction allowed for the taxable year shall be an amount equal to the aggregate of the Oklahoma net operating loss carryovers and carrybacks to such year.  Oklahoma net operating losses shall be separately determined by reference to Section 172 of the Internal Revenue Code, 26 U.S.C., Section 172, as modified by the Oklahoma Income Tax Act, Section 2351 et seq. of this title, and shall be allowed without regard to the existence of a federal net operating loss.  For tax years beginning after December 31, 2000, and ending before January 1, 2008, the years to which such losses may be carried shall be determined solely by reference to Section 172 of the Internal Revenue Code, 26 U.S.C., Section 172, with the exception that the terms "net operating loss" and "taxable income" shall be replaced with "Oklahoma net operating loss" and "Oklahoma taxable income".  For tax years beginning after December 31, 2007, and ending before January 1, 2009, years to which such losses may be carried back shall be limited to two (2) years.  For tax years beginning after December 31, 2008, the years to which such losses may be carried back shall be determined solely by reference to Section 172 of the Internal Revenue Code, 26 U.S.C., Section 172, with the exception that the terms "net operating loss" and "taxable income" shall be replaced with "Oklahoma net operating loss" and "Oklahoma taxable income".
4.  Items of the following nature shall be allocated as indicated.  Allowable deductions attributable to items separately allocable in subparagraphs a, b and c of this paragraph, whether or not such items of income were actually received, shall be allocated on the same basis as those items:
a.	Income from real and tangible personal property, such as rents, oil and mining production or royalties, and gains or losses from sales of such property, shall be allocated in accordance with the situs of such property;
b.	Income from intangible personal property, such as interest, dividends, patent or copyright royalties, and gains or losses from sales of such property, shall be allocated in accordance with the domiciliary situs of the taxpayer, except that:
(1)	where such property has acquired a nonunitary business or commercial situs apart from the domicile of the taxpayer such income shall be allocated in accordance with such business or commercial situs; interest income from investments held to generate working capital for a unitary business enterprise shall be included in apportionable income; a resident trust or resident estate shall be treated as having a separate commercial or business situs insofar as undistributed income is concerned, but shall not be treated as having a separate commercial or business situs insofar as distributed income is concerned,
(2)	for taxable years beginning after December 31, 2003, capital or ordinary gains or losses from the sale of an ownership interest in a publicly traded partnership, as defined by Section 7704(b) of the Internal Revenue Code of 1986, as amended, shall be allocated to this state in the ratio of the original cost of such partnership's tangible property in this state to the original cost of such partnership's tangible property everywhere, as determined at the time of the sale; if more than fifty percent (50%) of the value of the partnership's assets consists of intangible assets, capital or ordinary gains or losses from the sale of an ownership interest in the partnership shall be allocated to this state in accordance with the sales factor of the partnership for its first full tax period immediately preceding its tax period during which the ownership interest in the partnership was sold; the provisions of this division shall only apply if the capital or ordinary gains or losses from the sale of an ownership interest in a partnership do not constitute qualifying gain receiving capital treatment as defined in subparagraph a of paragraph 2 of subsection F of this section,
(3)	income from such property which is required to be allocated pursuant to the provisions of paragraph 5 of this subsection shall be allocated as herein provided;
c.	Net income or loss from a business activity which is not a part of business carried on within or without the state of a unitary character shall be separately allocated to the state in which such activity is conducted;
d.	In the case of a manufacturing or processing enterprise the business of which in Oklahoma consists solely of marketing its products by:
(1)	sales having a situs without this state, shipped directly to a point from without the state to a purchaser within the state, commonly known as interstate sales,
(2)	sales of the product stored in public warehouses within the state pursuant to "in transit" tariffs, as prescribed and allowed by the Interstate Commerce Commission, to a purchaser within the state,
(3)	sales of the product stored in public warehouses within the state where the shipment to such warehouses is not covered by "in transit" tariffs, as prescribed and allowed by the Interstate Commerce Commission, to a purchaser within or without the state,
the Oklahoma net income shall, at the option of the taxpayer, be that portion of the total net income of the taxpayer for federal income tax purposes derived from the manufacture and/or processing and sales everywhere as determined by the ratio of the sales defined in this section made to the purchaser within the state to the total sales everywhere.  The term "public warehouse" as used in this subparagraph means a licensed public warehouse, the principal business of which is warehousing merchandise for the public;
e.	In the case of insurance companies, Oklahoma taxable income shall be taxable income of the taxpayer for federal tax purposes, as adjusted for the adjustments provided pursuant to the provisions of paragraphs 1 and 2 of this subsection, apportioned as follows:
(1)	except as otherwise provided by division (2) of this subparagraph, taxable income of an insurance company for a taxable year shall be apportioned to this state by multiplying such income by a fraction, the numerator of which is the direct premiums written for insurance on property or risks in this state, and the denominator of which is the direct premiums written for insurance on property or risks everywhere.  For purposes of this subsection, the term "direct premiums written" means the total amount of direct premiums written, assessments and annuity considerations as reported for the taxable year on the annual statement filed by the company with the Insurance Commissioner in the form approved by the National Association of Insurance Commissioners, or such other form as may be prescribed in lieu thereof,
(2)	if the principal source of premiums written by an insurance company consists of premiums for reinsurance accepted by it, the taxable income of such company shall be apportioned to this state by multiplying such income by a fraction, the numerator of which is the sum of (a) direct premiums written for insurance on property or risks in this state, plus (b) premiums written for reinsurance accepted in respect of property or risks in this state, and the denominator of which is the sum of (c) direct premiums written for insurance on property or risks everywhere, plus (d) premiums written for reinsurance accepted in respect of property or risks everywhere.  For purposes of this paragraph, premiums written for reinsurance accepted in respect of property or risks in this state, whether or not otherwise determinable, may at the election of the company be determined on the basis of the proportion which premiums written for insurance accepted from companies commercially domiciled in Oklahoma bears to premiums written for reinsurance accepted from all sources, or alternatively in the proportion which the sum of the direct premiums written for insurance on property or risks in this state by each ceding company from which reinsurance is accepted bears to the sum of the total direct premiums written by each such ceding company for the taxable year.
5.  The net income or loss remaining after the separate allocation in paragraph 4 of this subsection, being that which is derived from a unitary business enterprise, shall be apportioned to this state on the basis of the arithmetical average of three factors consisting of property, payroll and sales or gross revenue enumerated as subparagraphs a, b and c of this paragraph.  Net income or loss as used in this paragraph includes that derived from patent or copyright royalties, purchase discounts, and interest on accounts receivable relating to or arising from a business activity, the income from which is apportioned pursuant to this subsection, including the sale or other disposition of such property and any other property used in the unitary enterprise.  Deductions used in computing such net income or loss shall not include taxes based on or measured by income.  Provided, for corporations whose property for purposes of the tax imposed by Section 2355 of this title has an initial investment cost equaling or exceeding Two Hundred Million Dollars ($200,000,000.00) and such investment is made on or after July 1, 1997, or for corporations which expand their property or facilities in this state and such expansion has an investment cost equaling or exceeding Two Hundred Million Dollars ($200,000,000.00) over a period not to exceed three (3) years, and such expansion is commenced on or after January 1, 2000, the three factors shall be apportioned with property and payroll, each comprising twenty-five percent (25%) of the apportionment factor and sales comprising fifty percent (50%) of the apportionment factor.  The apportionment factors shall be computed as follows:
a.	The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property everywhere owned or rented and used during the tax period.
(1)	Property, the income from which is separately allocated in paragraph 4 of this subsection, shall not be included in determining this fraction.  The numerator of the fraction shall include a portion of the investment in transportation and other equipment having no fixed situs, such as rolling stock, buses, trucks and trailers, including machinery and equipment carried thereon, airplanes, salespersons' automobiles and other similar equipment, in the proportion that miles traveled in Oklahoma by such equipment bears to total miles traveled,
(2)	Property owned by the taxpayer is valued at its original cost.  Property rented by the taxpayer is valued at eight times the net annual rental rate.  Net annual rental rate is the annual rental rate paid by the taxpayer, less any annual rental rate received by the taxpayer from subrentals,
(3)	The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the Oklahoma Tax Commission may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer's property;
b.	The payroll factor is a fraction, the numerator of which is the total compensation for services rendered in the state during the tax period, and the denominator of which is the total compensation for services rendered everywhere during the tax period.  "Compensation", as used in this subsection means those paid-for services to the extent related to the unitary business but does not include officers' salaries, wages and other compensation.
(1)	In the case of a transportation enterprise, the numerator of the fraction shall include a portion of such expenditure in connection with employees operating equipment over a fixed route, such as railroad employees, airline pilots, or bus drivers, in this state only a part of the time, in the proportion that mileage traveled in Oklahoma bears to total mileage traveled by such employees,
(2)	In any case the numerator of the fraction shall include a portion of such expenditures in connection with itinerant employees, such as traveling salespersons, in this state only a part of the time, in the proportion that time spent in Oklahoma bears to total time spent in furtherance of the enterprise by such employees;
c.	The sales factor is a fraction, the numerator of which is the total sales or gross revenue of the taxpayer in this state during the tax period, and the denominator of which is the total sales or gross revenue of the taxpayer everywhere during the tax period.  "Sales", as used in this subsection does not include sales or gross revenue which are separately allocated in paragraph 4 of this subsection.
(1)	Sales of tangible personal property have a situs in this state if the property is delivered or shipped to a purchaser other than the United States government, within this state regardless of the FOB point or other conditions of the sale; or the property is shipped from an office, store, warehouse, factory or other place of storage in this state and (a) the purchaser is the United States government or (b) the taxpayer is not doing business in the state of the destination of the shipment.
(2)	In the case of a railroad or interurban railway enterprise, the numerator of the fraction shall not be less than the allocation of revenues to this state as shown in its annual report to the Corporation Commission.
(3)	In the case of an airline, truck or bus enterprise or freight car, tank car, refrigerator car or other railroad equipment enterprise, the numerator of the fraction shall include a portion of revenue from interstate transportation in the proportion that interstate mileage traveled in Oklahoma bears to total interstate mileage traveled.
(4)	In the case of an oil, gasoline or gas pipeline enterprise, the numerator of the fraction shall be either the total of traffic units of the enterprise within Oklahoma or the revenue allocated to Oklahoma based upon miles moved, at the option of the taxpayer, and the denominator of which shall be the total of traffic units of the enterprise or the revenue of the enterprise everywhere as appropriate to the numerator.  A "traffic unit" is hereby defined as the transportation for a distance of one (1) mile of one (1) barrel of oil, one (1) gallon of gasoline or one thousand (1,000) cubic feet of natural or casinghead gas, as the case may be.
(5)	In the case of a telephone or telegraph or other communication enterprise, the numerator of the fraction shall include that portion of the interstate revenue as is allocated pursuant to the accounting procedures prescribed by the Federal Communications Commission; provided that in respect to each corporation or business entity required by the Federal Communications Commission to keep its books and records in accordance with a uniform system of accounts prescribed by such Commission, the intrastate net income shall be determined separately in the manner provided by such uniform system of accounts and only the interstate income shall be subject to allocation pursuant to the provisions of this subsection.  Provided further, that the gross revenue factors shall be those as are determined pursuant to the accounting procedures prescribed by the Federal Communications Commission.
In any case where the apportionment of the three factors prescribed in this paragraph attributes to Oklahoma a portion of net income of the enterprise out of all appropriate proportion to the property owned and/or business transacted within this state, because of the fact that one or more of the factors so prescribed are not employed to any appreciable extent in furtherance of the enterprise; or because one or more factors not so prescribed are employed to a considerable extent in furtherance of the enterprise; or because of other reasons, the Tax Commission is empowered to permit, after a showing by taxpayer that an excessive portion of net income has been attributed to Oklahoma, or require, when in its judgment an insufficient portion of net income has been attributed to Oklahoma, the elimination, substitution, or use of additional factors, or reduction or increase in the weight of such prescribed factors.  Provided, however, that any such variance from such prescribed factors which has the effect of increasing the portion of net income attributable to Oklahoma must not be inherently arbitrary, and application of the recomputed final apportionment to the net income of the enterprise must attribute to Oklahoma only a reasonable portion thereof.
6.  For calendar years 1997 and 1998, the owner of a new or expanded agricultural commodity processing facility in this state may exclude from Oklahoma taxable income, or in the case of an individual, the Oklahoma adjusted gross income, fifteen percent (15%) of the investment by the owner in the new or expanded agricultural commodity processing facility.  For calendar year 1999, and all subsequent years, the percentage, not to exceed fifteen percent (15%), available to the owner of a new or expanded agricultural commodity processing facility in this state claiming the exemption shall be adjusted annually so that the total estimated reduction in tax liability does not exceed One Million Dollars ($1,000,000.00) annually.  The Tax Commission shall promulgate rules for determining the percentage of the investment which each eligible taxpayer may exclude.  The exclusion provided by this paragraph shall be taken in the taxable year when the investment is made.  In the event the total reduction in tax liability authorized by this paragraph exceeds One Million Dollars ($1,000,000.00) in any calendar year, the Tax Commission shall permit any excess over One Million Dollars ($1,000,000.00) and shall factor such excess into the percentage for subsequent years.  Any amount of the exemption permitted to be excluded pursuant to the provisions of this paragraph but not used in any year may be carried forward as an exemption from income pursuant to the provisions of this paragraph for a period not exceeding six (6) years following the year in which the investment was originally made.
For purposes of this paragraph:
a.	"Agricultural commodity processing facility" means building, structures, fixtures and improvements used or operated primarily for the processing or production of marketable products from agricultural commodities.  The term shall also mean a dairy operation that requires a depreciable investment of at least Two Hundred Fifty Thousand Dollars ($250,000.00) and which produces milk from dairy cows.  The term does not include a facility that provides only, and nothing more than, storage, cleaning, drying or transportation of agricultural commodities, and
b.	"Facility" means each part of the facility which is used in a process primarily for:
(1)	the processing of agricultural commodities, including receiving or storing agricultural commodities, or the production of milk at a dairy operation,
(2)	transporting the agricultural commodities or product before, during or after the processing, or
(3)	packaging or otherwise preparing the product for sale or shipment.
7.  Despite any provision to the contrary in paragraph 3 of this subsection, for taxable years beginning after December 31, 1999, in the case of a taxpayer which has a farming loss, such farming loss shall be considered a net operating loss carryback in accordance with and to the extent of the Internal Revenue Code, 26 U.S.C., Section 172(b)(G).  However, the amount of the net operating loss carryback shall not exceed the lesser of:
a.	Sixty Thousand Dollars ($60,000.00), or
b.	the loss properly shown on Schedule F of the Internal Revenue Service Form 1040 reduced by one-half (1/2) of the income from all other sources other than reflected on Schedule F.
8.  In taxable years beginning after December 31, 1995, all qualified wages equal to the federal income tax credit set forth in 26 U.S.C.A., Section 45A, shall be deducted from taxable income.  The deduction allowed pursuant to this paragraph shall only be permitted for the tax years in which the federal tax credit pursuant to 26 U.S.C.A., Section 45A, is allowed.  For purposes of this paragraph, "qualified wages" means those wages used to calculate the federal credit pursuant to 26 U.S.C.A., Section 45A.
9.  In taxable years beginning after December 31, 2005, an employer that is eligible for and utilizes the Safety Pays OSHA Consultation Service provided by the Oklahoma Department of Labor shall receive an exemption from taxable income in the amount of One Thousand Dollars ($1,000.00) for the tax year that the service is utilized.
10.  For taxable years beginning on or after January 1, 2010, there shall be added to Oklahoma taxable income an amount equal to the amount of deferred income not included in such taxable income pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986 as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009 (P.L. No. 111-5). There shall be subtracted from Oklahoma taxable income an amount equal to the amount of deferred income included in such taxable income pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
B.  1.  The taxable income of any corporation shall be further adjusted to arrive at Oklahoma taxable income, except those corporations electing treatment as provided in subchapter S of the Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section 2365 of this title, deductions pursuant to the provisions of the Accelerated Cost Recovery System as defined and allowed in the Economic Recovery Tax Act of 1981, Public Law 97-34, 26 U.S.C., Section 168, for depreciation of assets placed into service after December 31, 1981, shall not be allowed in calculating Oklahoma taxable income.  Such corporations shall be allowed a deduction for depreciation of assets placed into service after December 31, 1981, in accordance with provisions of the Internal Revenue Code, 26 U.S.C., Section 1 et seq., in effect immediately prior to the enactment of the Accelerated Cost Recovery System.  The Oklahoma tax basis for all such assets placed into service after December 31, 1981, calculated in this section shall be retained and utilized for all Oklahoma income tax purposes through the final disposition of such assets.
Notwithstanding any other provisions of the Oklahoma Income Tax Act, Section 2351 et seq. of this title, or of the Internal Revenue Code to the contrary, this subsection shall control calculation of depreciation of assets placed into service after December 31, 1981, and before January 1, 1983.
For assets placed in service and held by a corporation in which accelerated cost recovery system was previously disallowed, an adjustment to taxable income is required in the first taxable year beginning after December 31, 1982, to reconcile the basis of such assets to the basis allowed in the Internal Revenue Code.  The purpose of this adjustment is to equalize the basis and allowance for depreciation accounts between that reported to the Internal Revenue Service and that reported to Oklahoma.
2.  For tax years beginning on or after January 1, 2009, and ending on or before December 31, 2009, there shall be added to Oklahoma taxable income any amount in excess of One Hundred Seventy-five Thousand Dollars ($175,000.00) which has been deducted as a small business expense under Internal Revenue Code, Section 179 as provided in the American Recovery and Reinvestment Act of 2009.
C.  1.  For taxable years beginning after December 31, 1987, the taxable income of any corporation shall be further adjusted to arrive at Oklahoma taxable income for transfers of technology to qualified small businesses located in Oklahoma.  Such transferor corporation shall be allowed an exemption from taxable income of an amount equal to the amount of royalty payment received as a result of such transfer; provided, however, such amount shall not exceed ten percent (10%) of the amount of gross proceeds received by such transferor corporation as a result of the technology transfer.  Such exemption shall be allowed for a period not to exceed ten (10) years from the date of receipt of the first royalty payment accruing from such transfer.  No exemption may be claimed for transfers of technology to qualified small businesses made prior to January 1, 1988.
2.  For purposes of this subsection:
a.	"Qualified small business" means an entity, whether organized as a corporation, partnership, or proprietorship, organized for profit with its principal place of business located within this state and which meets the following criteria:
(1)	Capitalization of not more than Two Hundred Fifty Thousand Dollars ($250,000.00),
~~(~~2)	Having at least fifty percent (50%) of its employees and assets located in Oklahoma at the time of the transfer, and
(3)	Not a subsidiary or affiliate of the transferor corporation;
b.	"Technology" means a proprietary process, formula, pattern, device or compilation of scientific or technical information which is not in the public domain;
c.	"Transferor corporation" means a corporation which is the exclusive and undisputed owner of the technology at the time the transfer is made; and
d.	"Gross proceeds" means the total amount of consideration for the transfer of technology, whether the consideration is in money or otherwise.
D.  1.  For taxable years beginning after December 31, 2005, the taxable income of any corporation, estate or trust, shall be further adjusted for qualifying gains receiving capital treatment.  Such corporations, estates or trusts shall be allowed a deduction from Oklahoma taxable income for the amount of qualifying gains receiving capital treatment earned by the corporation, estate or trust during the taxable year and included in the federal taxable income of such corporation, estate or trust.
2.  As used in this subsection:
a.	"qualifying gains receiving capital treatment" means the amount of net capital gains, as defined in Section 1222(11) of the Internal Revenue Code, included in the federal income tax return of the corporation, estate or trust that result from:
(1)	the sale of real property or tangible personal property located within Oklahoma that has been directly or indirectly owned by the corporation, estate or trust for a holding period of at least five (5) years prior to the date of the transaction from which such net capital gains arise,
(2)	the sale of stock or on the sale of an ownership interest in an Oklahoma company, limited liability company, or partnership where such stock or ownership interest has been directly or indirectly owned by the corporation, estate or trust for a holding period of at least three (3) years prior to the date of the transaction from which the net capital gains arise, or
(3)	the sale of real property, tangible personal property or intangible personal property located within Oklahoma as part of the sale of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership where such property has been directly or indirectly owned by such entity owned by the owners of such entity, and used in or derived from such entity for a period of at least three (3) years prior to the date of the transaction from which the net capital gains arise,
b.	"holding period" means an uninterrupted period of time.  The holding period shall include any additional period when the property was held by another individual or entity, if such additional period is included in the taxpayer's holding period for the asset pursuant to the Internal Revenue Code,
c.	"Oklahoma company", "limited liability company", or "partnership" means an entity whose primary headquarters have been located in Oklahoma for at least three (3) uninterrupted years prior to the date of the transaction from which the net capital gains arise,
d.	"direct" means the taxpayer directly owns the asset, and
e.	"indirect" means the taxpayer owns an interest in a pass-through entity (or chain of pass-through entities) that sells the asset that gives rise to the qualifying gains receiving capital treatment.
(1)	With respect to sales of real property or tangible personal property located within Oklahoma, the deduction described in this subsection shall not apply unless the pass-through entity that makes the sale has held the property for not less than five (5) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner, or shareholder of the pass-through entity in the tier immediately below it for an uninterrupted period of not less than five (5) years.
(2)	With respect to sales of stock or ownership interest in or sales of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership, the deduction described in this subsection shall not apply unless the pass-through entity that makes the sale has held the stock or ownership interest or the assets for not less than three (3) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner or shareholder of the pass-through entity in the tier immediately below it for an uninterrupted period of not less than three (3) years.
E.  The Oklahoma adjusted gross income of any individual taxpayer shall be further adjusted as follows to arrive at Oklahoma taxable income:
1.	a.	~~In~~ For taxable years beginning before January 1, 2013, if otherwise authorized by legislative enactment in the case of individuals, there shall be added or deducted, as the case may be, the difference necessary to allow personal exemptions of One Thousand Dollars ($1,000.00) in lieu of the personal exemptions allowed by the Internal Revenue Code.
b.	~~There~~ For taxable years beginning before January 1, 2013, if otherwise authorized by legislative enactment, there shall be allowed an additional exemption of One Thousand Dollars ($1,000.00) for each taxpayer or spouse who is blind at the close of the tax year.  For purposes of this subparagraph, an individual is blind only if the central visual acuity of the individual does not exceed 20/200 in the better eye with correcting lenses, or if the visual acuity of the individual is greater than 20/200, but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than twenty (20) degrees.
c.	There shall be allowed an additional exemption of One Thousand Dollars ($1,000.00) for each taxpayer or spouse who is sixty-five (65) years of age or older at the close of the tax year based upon the filing status and federal adjusted gross income of the taxpayer.  Taxpayers with the following filing status may claim this exemption if the federal adjusted gross income does not exceed:
(1)	Twenty-five Thousand Dollars ($25,000.00) if married and filing jointly;
(2)	Twelve Thousand Five Hundred Dollars ($12,500.00) if married and filing separately;
(3)	Fifteen Thousand Dollars ($15,000.00) if single; and
(4)	Nineteen Thousand Dollars ($19,000.00) if a qualifying head of household.
Provided, for taxable years beginning after December 31, 1999, amounts included in the calculation of federal adjusted gross income pursuant to the conversion of a traditional individual retirement account to a Roth individual retirement account shall be excluded from federal adjusted gross income for purposes of the income thresholds provided in this subparagraph.
2.	a.	For taxable years beginning on or before December 31, 2005, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by the Internal Revenue Code, in an amount equal to the larger of fifteen percent (15%) of the Oklahoma adjusted gross income or One Thousand Dollars ($1,000.00), but not to exceed Two Thousand Dollars ($2,000.00), except that in the case of a married individual filing a separate return such deduction shall be the larger of fifteen percent (15%) of such Oklahoma adjusted gross income or Five Hundred Dollars ($500.00), but not to exceed the maximum amount of One Thousand Dollars ($1,000.00),
b.	For taxable years beginning on or after January 1, 2006, and before January 1, 2007, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by the Internal Revenue Code, in an amount equal to:
(1)	Three Thousand Dollars ($3,000.00), if the filing status is married filing joint, head of household or qualifying widow; or
(2)	Two Thousand Dollars ($2,000.00), if the filing status is single or married filing separate.
c.	For the taxable year beginning on January 1, 2007, and ending December 31, 2007, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by the Internal Revenue Code, in an amount equal to:
(1)	Five Thousand Five Hundred Dollars ($5,500.00), if the filing status is married filing joint or qualifying widow; or
(2)	Four Thousand One Hundred Twenty-five Dollars ($4,125.00) for a head of household; or
(3)	Two Thousand Seven Hundred Fifty Dollars ($2,750.00), if the filing status is single or married filing separate.
d.	For the taxable year beginning on January 1, 2008, and ending December 31, 2008, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by the Internal Revenue Code, in an amount equal to:
(1)	Six Thousand Five Hundred Dollars ($6,500.00), if the filing status is married filing joint or qualifying widow, or
(2)	Four Thousand Eight Hundred Seventy-five Dollars ($4,875.00) for a head of household, or
(3)	Three Thousand Two Hundred Fifty Dollars ($3,250.00), if the filing status is single or married filing separate.
e.	For the taxable year beginning on January 1, 2009, and ending December 31, 2009, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by the Internal Revenue Code, in an amount equal to:
(1)	Eight Thousand Five Hundred Dollars ($8,500.00), if the filing status is married filing joint or qualifying widow, or
(2)	Six Thousand Three Hundred Seventy-five Dollars ($6,375.00) for a head of household, or
(3)	Four Thousand Two Hundred Fifty Dollars ($4,250.00), if the filing status is single or married filing separate.
Oklahoma adjusted gross income shall be increased by any amounts paid for motor vehicle excise taxes which were deducted as allowed by the Internal Revenue Code.
f.	For taxable years beginning on or after January 1, 2010, and ending December 31, 2012, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction equal to the standard deduction allowed by the Internal Revenue Code of 1986, as amended, based upon the amount and filing status prescribed by such Code for purposes of filing federal individual income tax returns.
3.  In the case of resident and part-year resident individuals having adjusted gross income from sources both within and without the state, the itemized or standard deductions and personal exemptions shall be reduced to an amount which is the same portion of the total thereof as Oklahoma adjusted gross income is of adjusted gross income.  To the extent itemized deductions include allowable moving expense, proration of moving expense shall not be required or permitted but allowable moving expense shall be fully deductible for those taxpayers moving within or into Oklahoma and no part of moving expense shall be deductible for those taxpayers moving without or out of Oklahoma.  All other itemized or standard deductions and personal exemptions shall be subject to proration as provided by law.  No itemized deductions shall be allowed for tax years beginning on or after January 1, 2013.
4.  ~~A~~ For tax years beginning before January 1, 2013, resident individual with a physical disability constituting a substantial handicap to employment may deduct from Oklahoma adjusted gross income such expenditures to modify a motor vehicle, home or workplace as are necessary to compensate for his or her handicap.  A veteran certified by the Department of Veterans Affairs of the federal government as having a service-connected disability shall be conclusively presumed to be an individual with a physical disability constituting a substantial handicap to employment.  The Tax Commission shall promulgate rules containing a list of combinations of common disabilities and modifications which may be presumed to qualify for this deduction.  The Tax Commission shall prescribe necessary requirements for verification.
5.	a.	Before July 1, 2010, the first One Thousand Five Hundred Dollars ($1,500.00) received by any person from the United States as salary or compensation in any form, other than retirement benefits, as a member of any component of the Armed Forces of the United States shall be deducted from taxable income.
b.	On or after July 1, 2010, and ending before January 1, 2015, one hundred percent (100%) of the income received by any person from the United States as salary or compensation in any form, other than retirement benefits, as a member of any component of the Armed Forces of the United States shall be deducted from taxable income.
c.	For the taxable year beginning on January 1, 2015, and every year thereafter, if the State Board of Equalization makes a determination pursuant to Section 2355.1D of this title that, for the purposes of this paragraph, revenue collections exceed revenue reductions, the one hundred percent (100%) deduction provided for in subparagraph b of this paragraph may be claimed.
d.	For the taxable year beginning on January 1, 2015, and every year thereafter, if the State Board of Equalization makes a determination pursuant to Section 2355.1D of this title that, for the purposes of this paragraph, revenue collections do not exceed revenue reductions, a deduction of the first One Thousand Five Hundred Dollars ($1,500.00) received by any person from the United States as salary or compensation in any form, other than retirement benefits, as a member of any component of the Armed Forces of the United States shall be allowed.
e.	Whenever the filing of a timely income tax return by a member of the Armed Forces of the United States is made impracticable or impossible of accomplishment by reason of:
(1)	absence from the United States, which term includes only the states and the District of Columbia;
(2)	absence from the State of Oklahoma while on active duty; or
(3)	confinement in a hospital within the United States for treatment of wounds, injuries or disease,
the time for filing a return and paying an income tax shall be and is hereby extended without incurring liability for interest or penalties, to the fifteenth day of the third month following the month in which:
(a)	Such individual shall return to the United States if the extension is granted pursuant to subparagraph a of this paragraph, return to the State of Oklahoma if the extension is granted pursuant to subparagraph b of this paragraph or be discharged from such hospital if the extension is granted pursuant to subparagraph c of this paragraph; or
(b)	An executor, administrator, or conservator of the estate of the taxpayer is appointed, whichever event occurs the earliest.
Provided, that the Tax Commission may, in its discretion, grant any member of the Armed Forces of the United States an extension of time for filing of income tax returns and payment of income tax without incurring liabilities for interest or penalties.  Such extension may be granted only when in the judgment of the Tax Commission a good cause exists therefor and may be for a period in excess of six (6) months.  A record of every such extension granted, and the reason therefor, shall be kept.
6.  Before July 1, 2010, the salary or any other form of compensation, received from the United States by a member of any component of the Armed Forces of the United States, shall be deducted from taxable income during the time in which the person is detained by the enemy in a conflict, is a prisoner of war or is missing in action and not deceased; provided, after July 1, 2010, all such salary or compensation shall be subject to the deduction as provided pursuant to paragraph 5 of this subsection.
7.  Notwithstanding anything in the Internal Revenue Code ~~or in the Oklahoma Income Tax Act~~ to the contrary, it is expressly provided that, in the case of resident individuals, amounts received before January 1, 2013, as dividends or distributions of earnings from savings and loan associations or credit unions located in Oklahoma, and interest received on savings accounts and time deposits from such sources or from state and national banks or trust companies located in Oklahoma, shall qualify as dividends for the purpose of the dividend exclusion, and taxable income shall be adjusted accordingly to arrive at Oklahoma taxable income; provided, however, that the dividend, distribution of earnings and/or interest exclusion provided for hereinabove shall not be cumulative to the maximum dividend exclusion allowed by the Internal Revenue Code.  Any dividend exclusion already allowed by the Internal Revenue Code and reflected in the taxpayer's Oklahoma taxable income together with exclusion allowed herein shall not exceed the total of One Hundred Dollars ($100.00) per individual or Two Hundred Dollars ($200.00) per couple filing a joint return.
8.	a.	An individual taxpayer, whether resident or nonresident, may deduct an amount equal to the federal income taxes paid by the taxpayer during the taxable year.
b.	Federal taxes as described in subparagraph a of this paragraph shall be deductible by any individual taxpayer, whether resident or nonresident, only to the extent they relate to income subject to taxation pursuant to the provisions of the Oklahoma Income Tax Act.  The maximum amount allowable in the preceding paragraph shall be prorated on the ratio of the Oklahoma adjusted gross income to federal adjusted gross income.
c.	For the purpose of this paragraph, "federal income taxes paid" shall mean federal income taxes, surtaxes imposed on incomes or excess profits taxes, as though the taxpayer was on the accrual basis.  In determining the amount of deduction for federal income taxes for tax year 2001, the amount of the deduction shall not be adjusted by the amount of any accelerated ten percent (10%) tax rate bracket credit or advanced refund of the credit received during the tax year provided pursuant to the federal Economic Growth and Tax Relief Reconciliation Act of 2001, P.L. No. 107-16, and the advanced refund of such credit shall not be subject to taxation.
d.	The provisions of this paragraph shall apply to all taxable years ending after December 31, 1978, and beginning before January 1, 2006.
9.  Retirement benefits not to exceed Five Thousand Five Hundred Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand Dollars ($10,000.00) for the 2006 tax year ~~and all subsequent tax years~~ through the 2012 tax year, which are received by an individual from the civil service of the United States, the Oklahoma Public Employees Retirement System, the Teachers' Retirement System of Oklahoma, the Oklahoma Law Enforcement Retirement System, the Oklahoma Firefighters Pension and Retirement System, the Oklahoma Police Pension and Retirement System, the employee retirement systems created by counties pursuant to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the Uniform Retirement System for Justices and Judges, the Oklahoma Wildlife Conservation Department Retirement Fund, the Oklahoma Employment Security Commission Retirement Plan, or the employee retirement systems created by municipalities pursuant to Section 48-101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt from taxable income.
10.  In taxable years beginning after December 3l, 1984, and ending before January 1, 2013, Social Security benefits received by an individual shall be exempt from taxable income, to the extent such benefits are included in the federal adjusted gross income pursuant to the provisions of Section 86 of the Internal Revenue Code, 26 U.S.C., Section 86.
11.  For taxable years beginning after December 31, 1994, and ending before January 1, 2013, lump-sum distributions from employer plans of deferred compensation, which are not qualified plans within the meaning of Section 401(a) of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which are deposited in and accounted for within a separate bank account or brokerage account in a financial institution within this state, shall be excluded from taxable income in the same manner as a qualifying rollover contribution to an individual retirement account within the meaning of Section 408 of the Internal Revenue Code, 26 U.S.C., Section 408.  Amounts withdrawn from such bank or brokerage account, including any earnings thereon, shall be included in taxable income when withdrawn in the same manner as withdrawals from individual retirement accounts within the meaning of Section 408 of the Internal Revenue Code.
12.  In taxable years beginning after December 31, 1995, and ending before January 1, 2013, contributions made to and interest received from a medical savings account established pursuant to Sections 2621 through 2623 of Title 63 of the Oklahoma Statutes shall be exempt from taxable income.
13.  For taxable years beginning after December 31, 1996, and ending before January 1, 2013, the Oklahoma adjusted gross income of any individual taxpayer who is a swine or poultry producer may be further adjusted for the deduction for depreciation allowed for new construction or expansion costs which may be computed using the same depreciation method elected for federal income tax purposes except that the useful life shall be seven (7) years for purposes of this paragraph.  If depreciation is allowed as a deduction in determining the adjusted gross income of an individual, any depreciation calculated and claimed pursuant to this section shall in no event be a duplication of any depreciation allowed or permitted on the federal income tax return of the individual.
14.	a.	In taxable years beginning after December 31, 2002, and ending before January 1, 2013, nonrecurring adoption expenses paid by a resident individual taxpayer in connection with:
(1)	the adoption of a minor, or
(2)	a proposed adoption of a minor which did not result in a decreed adoption,
may be deducted from the Oklahoma adjusted gross income.
b.	The deductions for adoptions and proposed adoptions authorized by this paragraph shall not exceed Twenty Thousand Dollars ($20,000.00) per calendar year.
c.	The Tax Commission shall promulgate rules to implement the provisions of this paragraph which shall contain a specific list of nonrecurring adoption expenses which may be presumed to qualify for the deduction.  The Tax Commission shall prescribe necessary requirements for verification.
d.	"Nonrecurring adoption expenses" means adoption fees, court costs, medical expenses, attorney fees and expenses which are directly related to the legal process of adoption of a child including, but not limited to, costs relating to the adoption study, health and psychological examinations, transportation and reasonable costs of lodging and food for the child or adoptive parents which are incurred to complete the adoption process and are not reimbursed by other sources.  The term "nonrecurring adoption expenses" shall not include attorney fees incurred for the purpose of litigating a contested adoption, from and after the point of the initiation of the contest, costs associated with physical remodeling, renovation and alteration of the adoptive parents' home or property, except for a special needs child as authorized by the court.
15.	a.	In taxable years beginning before January 1, 2005, retirement benefits not to exceed the amounts specified in this paragraph, which are received by an individual sixty-five (65) years of age or older and whose Oklahoma adjusted gross income is Twenty-five Thousand Dollars ($25,000.00) or less if the filing status is single, head of household, or married filing separate, or Fifty Thousand Dollars ($50,000.00) or less if the filing status is married filing joint or qualifying widow, shall be exempt from taxable income.  In taxable years beginning after December 31, 2004, and ending before January 1, 2013, retirement benefits not to exceed the amounts specified in this paragraph, which are received by an individual whose Oklahoma adjusted gross income is less than the qualifying amount specified in this paragraph, shall be exempt from taxable income.
b.	For purposes of this paragraph, the qualifying amount shall be as follows:
(1)	in taxable years beginning after December 31, 2004, and prior to January 1, 2007, the qualifying amount shall be Thirty-seven Thousand Five Hundred Dollars ($37,500.00) or less if the filing status is single, head of household, or married filing separate, or Seventy-Five Thousand Dollars ($75,000.00) or less if the filing status is married filing jointly or qualifying widow,
(2)	in the taxable year beginning January 1, 2007, the qualifying amount shall be Fifty Thousand Dollars ($50,000.00) or less if the filing status is single, head of household, or married filing separate, or One Hundred Thousand Dollars ($100,000.00) or less if the filing status is married filing jointly or qualifying widow,
(3)	in the taxable year beginning January 1, 2008, the qualifying amount shall be Sixty-two Thousand Five Hundred Dollars ($62,500.00) or less if the filing status is single, head of household, or married filing separate, or One Hundred Twenty-five Thousand Dollars ($125,000.00) or less if the filing status is married filing jointly or qualifying widow,
(4)	in the taxable year beginning January 1, 2009, the qualifying amount shall be One Hundred Thousand Dollars ($100,000.00) or less if the filing status is single, head of household, or married filing separate, or Two Hundred Thousand Dollars ($200,000.00) or less if the filing status is married filing jointly or qualifying widow, and
(5)	in the taxable year beginning January 1, 2010, and subsequent taxable years, there shall be no limitation upon the qualifying amount.
c.	For purposes of this paragraph, "retirement benefits" means the total distributions or withdrawals from the following:
(1)	an employee pension benefit plan which satisfies the requirements of Section 401 of the Internal Revenue Code, 26 U.S.C., Section 401,
(2)	an eligible deferred compensation plan that satisfies the requirements of Section 457 of the Internal Revenue Code, 26 U.S.C., Section 457,
(3)	an individual retirement account, annuity or trust or simplified employee pension that satisfies the requirements of Section 408 of the Internal Revenue Code, 26 U.S.C., Section 408,
(4)	an employee annuity subject to the provisions of Section 403(a) or (b) of the Internal Revenue Code, 26 U.S.C., Section 403(a) or (b),
(5)	United States Retirement Bonds which satisfy the requirements of Section 86 of the Internal Revenue Code, 26 U.S.C., Section 86, or
(6)	lump-sum distributions from a retirement plan which satisfies the requirements of Section 402(e) of the Internal Revenue Code, 26 U.S.C., Section 402(e).
d.	The amount of the exemption provided by this paragraph shall be limited to Five Thousand Five Hundred Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand Dollars ($10,000.00) for the tax year 2006 and for all subsequent tax years when the exemption is in effect.  Any individual who claims the exemption provided for in paragraph 9 of this subsection shall not be permitted to claim a combined total exemption pursuant to this paragraph and paragraph 9 of this subsection in an amount exceeding Five Thousand Five Hundred Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand Dollars ($10,000.00) for the 2006 tax year and all subsequent tax years.
16.  In taxable years beginning after December 31, 1999, and ending before January 1, 2013, for an individual engaged in production agriculture who has filed a Schedule F form with the taxpayer's federal income tax return for such taxable year, there shall be excluded from taxable income any amount which was included as federal taxable income or federal adjusted gross income and which consists of the discharge of an obligation by a creditor of the taxpayer incurred to finance the production of agricultural products.
17.  In taxable years beginning December 31, 2000, and ending before January 1, 2013, an amount equal to one hundred percent (100%) of the amount of any scholarship or stipend received from participation in the Oklahoma Police Corps Program, as established in Section 2-140.3 of Title 47 of the Oklahoma Statutes shall be exempt from taxable income.
18.	a.	In taxable years beginning after December 31, 2001, and before January 1, 2005, there shall be allowed a deduction in the amount of contributions to accounts established pursuant to the Oklahoma College Savings Plan Act.  The deduction shall equal the amount of contributions to accounts, but in no event shall the deduction for each contributor exceed Two Thousand Five Hundred Dollars ($2,500.00) each taxable year for each account.
b.	In taxable years beginning after December 31, 2004, and ending before January 1, 2013, each taxpayer shall be allowed a deduction for contributions to accounts established pursuant to the Oklahoma College Savings Plan Act.  The maximum annual deduction shall equal the amount of contributions to all such accounts plus any contributions to such accounts by the taxpayer for prior taxable years after December 31, 2004, which were not deducted, but in no event shall the deduction for each tax year exceed Ten Thousand Dollars ($10,000.00) for each individual taxpayer or Twenty Thousand Dollars ($20,000.00) for taxpayers filing a joint return.  Any amount of a contribution that is not deducted by the taxpayer in the year for which the contribution is made may be carried forward as a deduction from income for the succeeding five (5) years.  For taxable years beginning after December 31, 2005, and ending before January 1, 2013, deductions may be taken for contributions and rollovers made during a taxable year and up to April 15 of the succeeding year, or the due date of a taxpayer's state income tax return, excluding extensions, whichever is later.  Provided, a deduction for the same contribution may not be taken for two (2) different taxable years.
c.	In taxable years beginning after December 31, 2006, and ending before January 1, 2013, deductions for contributions made pursuant to subparagraph b of this paragraph shall be limited as follows:
(1)	for a taxpayer who qualified for the five-year carryforward election and who takes a rollover or nonqualified withdrawal during that period, the tax deduction otherwise available pursuant to subparagraph b of this paragraph shall be reduced by the amount which is equal to the rollover or nonqualified withdrawal, and
(2)	for a taxpayer who elects to take a rollover or nonqualified withdrawal within the same tax year in which a contribution was made to the taxpayer's account, the tax deduction otherwise available pursuant to subparagraph b of this paragraph shall be reduced by the amount of the contribution which is equal to the rollover or nonqualified withdrawal.
d.	If a taxpayer elects to take a rollover on a contribution for which a deduction has been taken pursuant to subparagraph b of this paragraph within one year of the date of contribution, the amount of such rollover shall be included in the adjusted gross income of the taxpayer in the taxable year of the rollover.
e.	If a taxpayer makes a nonqualified withdrawal of contributions for which a deduction was taken pursuant to subparagraph b of this paragraph, such nonqualified withdrawal and any earnings thereon shall be included in the adjusted gross income of the taxpayer in the taxable year of the nonqualified withdrawal.
f.	As used in this paragraph:
(1)	"non-qualified withdrawal" means a withdrawal from an Oklahoma College Savings Plan account other than one of the following:
(a)	a qualified withdrawal,
(b)	a withdrawal made as a result of the death or disability of the designated beneficiary of an account,
(c)	a withdrawal that is made on the account of a scholarship or the allowance or payment described in Section 135(d)(1)(B) or (C) or by the Internal Revenue Code, received by the designated beneficiary to the extent the amount of the refund does not exceed the amount of the scholarship, allowance, or payment, or
(d)	a rollover or change of designated beneficiary as permitted by subsection F of Section 3970.7 of Title 70 of Oklahoma Statutes, and
(2)	"rollover" means the transfer of funds from the Oklahoma College Savings Plan to any other plan under Section 529 of the Internal Revenue Code.
19.  For taxable years beginning after December 31, 2005, and ending before January 1, 2013, retirement benefits received by an individual from any component of the Armed Forces of the United States in an amount not to exceed the greater of seventy-five percent (75%) of such benefits or Ten Thousand Dollars ($10,000.00) shall be exempt from taxable income but in no case less than the amount of the exemption provided by paragraph 15 of this subsection.
20.  For taxable years beginning after December 31, 2006, and ending before January 1, 2013, retirement benefits received by federal civil service retirees, including survivor annuities, paid in lieu of Social Security benefits shall be exempt from taxable income to the extent such benefits are included in the federal adjusted gross income pursuant to the provisions of Section 86 of the Internal Revenue Code, 26 U.S.C., Section 86, according to the following schedule:
a.	in the taxable year beginning January 1, 2007, twenty percent (20%) of such benefits shall be exempt,
b.	in the taxable year beginning January 1, 2008, forty percent (40%) of such benefits shall be exempt,
c.	in the taxable year beginning January 1, 2009, sixty percent (60%) of such benefits shall be exempt,
d.	in the taxable year beginning January 1, 2010, eighty percent (80%) of such benefits shall be exempt, and
e.	in the taxable year beginning January 1, 2011, and subsequent taxable years when the exemption is in effect, one hundred percent (100%) of such benefits shall be exempt.
21.	a.	For taxable years beginning after December 31, 2007, and ending before January 1, 2013, a resident individual may deduct up to Ten Thousand Dollars ($10,000.00) from Oklahoma adjusted gross income if the individual, or the dependent of the individual, while living, donates one or more human organs of the individual to another human being for human organ transplantation.  As used in this paragraph, "human organ" means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow.  A deduction that is claimed under this paragraph may be claimed in the taxable year in which the human organ transplantation occurs.
b.	An individual may claim this deduction only once, and the deduction may be claimed only for unreimbursed expenses that are incurred by the individual and related to the organ donation of the individual.
c.	The Oklahoma Tax Commission shall promulgate rules to implement the provisions of this paragraph which shall contain a specific list of expenses which may be presumed to qualify for the deduction.  The Tax Commission shall prescribe necessary requirements for verification.
22.  For taxable years beginning after December 31, 2009, and ending before January 1, 2013, there shall be exempt from taxable income any amount received by the beneficiary of the death benefit for an emergency medical technician or a registered emergency medical responder provided by Section 1-2505.1 of Title 63 of the Oklahoma Statutes.
23.  For taxable years beginning after December 31, 2008, taxable income shall be increased by any unemployment compensation exempted under Section 85 (c) of the Internal Revenue Code, 26 U.S.C., Section 85(c)(2009).
24.  For taxable years beginning after December 31, 2008, and ending before January 1, 2013, there shall be exempt from taxable income any payment in an amount less than Six Hundred Dollars ($600.00) received by a person as an award for participation in a competitive livestock show event.  For purposes of this paragraph, the payment shall be treated as a scholarship amount paid by the entity sponsoring the event and the sponsoring entity shall cause the payment to be categorized as a scholarship in its books and records.
F.  1.  For taxable years beginning after December 31, 2004, and ending before January 1, 2013, a deduction from the Oklahoma adjusted gross income of any individual taxpayer shall be allowed for qualifying gains receiving capital treatment that are included in the federal adjusted gross income of such individual taxpayer during the taxable year.
2.  As used in this subsection:
a.	"qualifying gains receiving capital treatment" means the amount of net capital gains, as defined in Section 1222(11) of the Internal Revenue Code, included in an individual taxpayer's federal income tax return that result from:
(1)	the sale of real property or tangible personal property located within Oklahoma that has been directly or indirectly owned by the individual taxpayer for a holding period of at least five (5) years prior to the date of the transaction from which such net capital gains arise,
(2)	the sale of stock or the sale of a direct or indirect ownership interest in an Oklahoma company, limited liability company, or partnership where such stock or ownership interest has been directly or indirectly owned by the individual taxpayer for a holding period of at least two (2) years prior to the date of the transaction from which the net capital gains arise, or
(3)	the sale of real property, tangible personal property or intangible personal property located within Oklahoma as part of the sale of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership or an Oklahoma proprietorship business enterprise where such property has been directly or indirectly owned by such entity or business enterprise or owned by the owners of such entity or business enterprise for a period of at least two (2) years prior to the date of the transaction from which the net capital gains arise,
b.	"holding period" means an uninterrupted period of time.  The holding period shall include any additional period when the property was held by another individual or entity, if such additional period is included in the taxpayer's holding period for the asset pursuant to the Internal Revenue Code,
c.	"Oklahoma company," "limited liability company," or "partnership" means an entity whose primary headquarters have been located in Oklahoma for at least three (3) uninterrupted years prior to the date of the transaction from which the net capital gains arise,
d.	"direct" means the individual taxpayer directly owns the asset,
e.	"indirect" means the individual taxpayer owns an interest in a pass-through entity (or chain of pass-through entities) that sells the asset that gives rise to the qualifying gains receiving capital treatment.
(1)	With respect to sales of real property or tangible personal property located within Oklahoma, the deduction described in this subsection shall not apply unless the pass-through entity that makes the sale has held the property for not less than five (5) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner, or shareholder of the pass-through entity in the tier immediately below it for an uninterrupted period of not less than five (5) years.
(2)	With respect to sales of stock or ownership interest in or sales of all or substantially all of the assets of an Oklahoma company, limited liability company, partnership or Oklahoma proprietorship business enterprise, the deduction described in this subsection shall not apply unless the pass-through entity that makes the sale has held the stock or ownership interest for not less than two (2) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner or shareholder of the pass-through entity in the tier immediately below it for an uninterrupted period of not less than two (2) years.  For purposes of this division, uninterrupted ownership prior to the effective date of this act shall be included in the determination of the required holding period prescribed by this division, and
f.	"Oklahoma proprietorship business enterprise" means a business enterprise whose income and expenses have been reported on Schedule C or F of an individual taxpayer's federal income tax return, or any similar successor schedule published by the Internal Revenue Service and whose primary headquarters have been located in Oklahoma for at least three (3) uninterrupted years prior to the date of the transaction from which the net capital gains arise.
G.  1.  For purposes of computing its Oklahoma taxable income under this section, the dividends-paid deduction otherwise allowed by federal law in computing net income of a real estate investment trust that is subject to federal income tax shall be added back in computing the tax imposed by this state under this title if the real estate investment trust is a captive real estate investment trust.
2.  For purposes of computing its Oklahoma taxable income under this section, a taxpayer shall add back otherwise deductible rents and interest expenses paid to a captive real estate investment trust that is not subject to the provisions of paragraph 1 of this subsection.  As used in this subsection:
a.	the term "real estate investment trust" or "REIT" means the meaning ascribed to such term in Section 856 of the Internal Revenue Code of 1986, as amended,
b.	the term "captive real estate investment trust" means a real estate investment trust, the shares or beneficial interests of which are not regularly traded on an established securities market and more than fifty percent (50%) of the voting power or value of the beneficial interests or shares of which are owned or controlled, directly or indirectly, or constructively, by a single entity that is:
(1)	treated as an association taxable as a corporation under the Internal Revenue Code of 1986, as amended, and
(2)	not exempt from federal income tax pursuant to the provisions of Section 501(a) of the Internal Revenue Code of 1986, as amended.
The term shall not include a real estate investment trust that is intended to be regularly traded on an established securities market, and that satisfies the requirements of Section 856(a)(5) and (6) of the U.S. Internal Revenue Code by reason of Section 856(h)(2) of the Internal Revenue Code,
c.	the term "association taxable as a corporation" shall not include the following entities:
(1)	any real estate investment trust as defined in paragraph a of this subsection other than a "captive real estate investment trust", or
(2)	any qualified real estate investment trust subsidiary under Section 856(i) of the Internal Revenue Code of 1986, as amended, other than a qualified REIT subsidiary of a "captive real estate investment trust", or
(3)	any Listed Australian Property Trust (meaning an Australian unit trust registered as a "Managed Investment Scheme" under the Australian Corporations Act in which the principal class of units is listed on a recognized stock exchange in Australia and is regularly traded on an established securities market), or an entity organized as a trust, provided that a Listed Australian Property Trust owns or controls, directly or indirectly, seventy-five percent (75%) or more of the voting power or value of the beneficial interests or shares of such trust, or
(4)	any Qualified Foreign Entity, meaning a corporation, trust, association or partnership organized outside the laws of the United States and which satisfies the following criteria:
(a)	at least seventy-five percent (75%) of the entity's total asset value at the close of its taxable year is represented by real estate assets, as defined in Section 856(c)(5)(B) of the Internal Revenue Code of 1986, as amended, thereby including shares or certificates of beneficial interest in any real estate investment trust, cash and cash equivalents, and U.S. Government securities,
(b)	the entity receives a dividend-paid deduction comparable to Section 561 of the Internal Revenue Code of 1986, as amended, or is exempt from entity level tax,
(c)	the entity is required to distribute at least eighty-five percent (85%) of its taxable income, as computed in the jurisdiction in which it is organized, to the holders of its shares or certificates of beneficial interest on an annual basis,
(d)	not more than ten percent (10%) of the voting power or value in such entity is held directly or indirectly or constructively by a single entity or individual, or the shares or beneficial interests of such entity are regularly traded on an established securities market, and
(e)	the entity is organized in a country which has a tax treaty with the United States.
3.  For purposes of this subsection, the constructive ownership rules of Section 318(a) of the Internal Revenue Code of 1986, as amended, as modified by Section 856(d)(5) of the Internal Revenue Code of 1986, as amended, shall apply in determining the ownership of stock, assets, or net profits of any person.
4.  A real estate investment trust that does not become regularly traded on an established securities market within one (1) year of the date on which it first becomes a real estate investment trust shall be deemed not to have been regularly traded on an established securities market, retroactive to the date it first became a real estate investment trust, and shall file an amended return reflecting such retroactive designation for any tax year or part year occurring during its initial year of status as a real estate investment trust.  For purposes of this subsection, a real estate investment trust becomes a real estate investment trust on the first day it has both met the requirements of Section 856 of the Internal Revenue Code and has elected to be treated as a real estate investment trust pursuant to Section 856(c)(1) of the Internal Revenue Code.
SECTION 32.     AMENDATORY     68 O.S. 2011, Section 54006, is amended to read as follows:
Section 54006.  A.  Except as provided in subsection F of this section, for taxable years beginning after December 31, 1992, and before January 1, 2003, and for taxable years beginning after December 31, 2005, there shall be allowed a credit against the tax imposed by Section 2355 of this title for a net increase in the number of full-time-equivalent employees engaged in computer services, data processing or research and development as defined in Section 54003 of this title, in this state including employees engaged in support services.
B.  The credit provided for in subsection A of this section shall be allowed in each of the four (4) subsequent years only if the level of new employees is maintained in the subsequent year; provided, such credit shall be allowed in each of the eight (8) subsequent years only if the level of new employees is maintained in the subsequent year and if the credit is taken for taxable years beginning after December 31, 2005.  In calculating the credit by the number of new employees, only those employees whose paid wages or salary were at least Thirty-five Thousand Dollars ($35,000.00) during each year the credit is claimed shall be included in the calculation.  The number of new employees shall be determined by comparing the monthly average number of full-time employees subject to Oklahoma income tax withholding for the final quarter of the taxable year with the corresponding period of the prior taxable year, as substantiated by such reports as may be required by the Tax Commission.
C.  For credits taken for taxable years beginning after December 31, 1992, and before January 1, 2003, in order to be eligible to receive the credit provided for in subsection A of this section, a new or expanding business shall not include the existing employee positions of any business enterprise that is directly or beneficially owned by a corporation, trust, joint venture, proprietorship, or partnership doing business in this state as of January 1, 1992.  For credits taken for taxable years beginning after December 31, 2005, in order to be eligible to receive the credit provided for in subsection A of this section, a new or expanding business shall not include the existing employee positions of any business enterprise that is directly or beneficially owned by a corporation, trust, joint venture, proprietorship, or partnership doing business in this state as of January 1, 2005.
D.  The credit allowed by subsection A of this section shall be Five Hundred Dollars ($500.00) for each new employee, but not to exceed fifty new employees.
E.  Any credits allowed but not used in any taxable year may be carried over in order to each of the four (4) years following the year of qualification and to the extent not used in those years in order to each of the five (5) years following the initial five-year period.
F.  No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010~~, for which the credit would otherwise be allowable.  The provisions of this subsection shall cease to be operative on July 1, 2012.  Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section~~ by any taxpayer subject to the tax imposed by subsection B of Section 2355 of this title.
SECTION 33.     REPEALER     68 O.S. 2011, Sections 2357.43, 2357.304, 2358.3, 2358.7, 2906, 2907 and 5011 and hereby repealed.
SECTION 34.  Sections 1 through 30, 32 and 33 of this act shall become effective July 1, 2012.
SECTION 35.  Section 31 of this act shall become effective January 1, 2013.
SECTION 36.  It being immediately necessary for the preservation of the public peace, health and 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.

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