In Re Oklahoma Development Finance Authority

2004 OK 26, 89 P.3d 1075, 2004 WL 728854
CourtSupreme Court of Oklahoma
DecidedMay 3, 2004
Docket99,745
StatusPublished
Cited by21 cases

This text of 2004 OK 26 (In Re Oklahoma Development Finance Authority) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Oklahoma Development Finance Authority, 2004 OK 26, 89 P.3d 1075, 2004 WL 728854 (Okla. 2004).

Opinions

HARGRAVE, J.

¶ 1 The Oklahoma Development Finance Authority (“ODFA”) has filed an application pursuant to 20 O.S. § 14.11 asking this Court to assume original jurisdiction and approve industrial development taxable revenue bonds to be issued pursuant to the Oklahoma Quality Jobs Incentive Leverage Act, 68 O.S. Supp.2002 § 3651 et seq. The purpose of the bonds is to provide funds to pay or reimburse The Goodyear Tire & Rubber Company and Michelin North America, Inc. for a portion of the costs of expanding and re-tooling their existing manufacturing plants in Oklahoma. The ODFA has authorized the issuance of Industrial Development Taxable Revenue Bonds (Goodyear Project) Series 2003 in a principal amount not to exceed $36,720,000 and Industrial Development Taxable Revenue Bonds (Michelin Project) Series 2003 in a principal amount not to exceed $29,615,000.

¶ 2 Section 3653 of the Oklahoma Quality Jobs Incentive Leverage Act (the Act), 68 O.S. Supp.2002 § 3651, et. seq., defines a qualifying establishment as a business: that has at least $115,000,000.00 in annual gross compensation paid with respect to jobs located in Oklahoma; that has an average salary of at least $40,000 paid annually to employees; that intends to add substantial gross compensation with respect to full-time-equivalent employment located in Oklahoma within three years of filing an irrevocable election with the Oklahoma Department of Commerce as provided in the Act; that has at least $200,000,000.00 total investment in Oklahoma; that intends to add investment for modernization and retooling of a facility located in the state of at least $50,000,000.00, within five years of filing an irrevocable election with the Oklahoma Department of Commerce as provided in the Act; that has and maintains at least 1,550 full-time employees in the state; that is described by Industry [1078]*1078Number 3011, Industry Group Number 301, Major Group, 30 of the Standard Industrial Classification Manual (SIC) latest revision; and that qualifies for proceeds under the Act and as of the date the irrevocable election is filed, has received or will receive funds as a result of a voter-approved economic development incentive derived from a tax levy as described in the definition. Two manufacturers have qualified under the Act, to date: The Goodyear Tire & Rubber Company and Miehelin North America, Inc. (referred to herein as “Goodyear” and “Miehelin”, or collectively as “qualifying establishments”).

¶3 Section 3652 of the Act states the legislative purpose behind its enactment:

“The Legislature finds that certain establishments which qualify for incentive payments pursuant to the Oklahoma Quality Jobs Program Act [68 O.S. § 3601 et seq.] are a source of economic benefits for the state, its political subdivisions and its residents that can only be achieved through the use of specialized economic incentives. The Oklahoma Quality Jobs Incentive Leverage Act is enacted in order to provide a mechanism for the leverage of incentive payments for the purpose of promoting and sustaining economic growth and activity within the State of Oklahoma. The Legislature finds that the use of the incentive payment, together with other fiscal resources, is a method that provides a beneficial correlation between the use of monies in the quality Jobs Program Incentive Leverage Fund and the total economic benefits to be derived from the use of proceeds from the sale of obligations provided by Section 4 of this Act. [68 O.S. Supp.2002 § 3654].”

¶ 4 The Act directs the ODFA to issue obligations in a principal amount determined as required by the section, upon certification by the Oklahoma Department of Commerce that an establishment has filed the irrevocable election described in the Act.2 The Act provides that no obligation issued by the ODFA pursuant to the Act shall be considered a general obligation of the State of Oklahoma for any purpose, and the indebtedness incurred shall be a debt of the ODFA and not a debt of the State of Oklahoma. 68 O.S. Supp.2002 § 3654(A).

¶ 5 The Act goes on to provide that the total principal amount of the indebtedness incurred by the ODFA shall not be greater than an amount required for proceeds equal to 14.4% of the maximum amount of projected investment for the facility of an establishment that will receive funds as a result of a voter-approved economic development incentive. 68 O.S. § 3654(B)(1). The voter-approved economic incentive is described in § 3653(l)(h).3

¶ 6 Miehelin and Goodyear have shown evidence that each has or will receive the voter approved local economic development incentive. Miehelin and Goodyear have filed the irrevocable election to forego the incentive payments that they are authorized to receive under the Oklahoma Quality Jobs Program Act, 68 O.S.2001 § 3601 et seq.4 The irrevocable election means that the in[1079]*1079centive payments that otherwise would have been paid to Michelin and Goodyear under the Oklahoma Quality Jobs Program Act will instead be deposited in the Quality Jobs Program Incentive Leverage Fund. 68 O.S. § 3658(B). That section specifically provides that such incentive payments shall be treated as an asset of the qualifying establishment that has been paid to the State of Oklahoma for purposes of the Act. In addition, .68 O.S. Supp.2002 § 3658(F), (H) and (I) prohibit the qualifying establishments from claiming certain tax credits or exemptions that otherwise would be available to them.5

¶ 7 Applicant states that the bonds are self-liquidating revenue bonds, payable solely from funds transferred from other, sources to the ODFA. Section 3657 of the Act creates a special fund within the State Treasury to be designated the “Quality Jobs Program Incentive Leverage Fund” (the Fund), and all amounts deposited into the Fund shall be used by ODFA solely as authorized by the Act, including payment of principal, interest and other costs associated with the issuance of the bonds under the Act. The ODFA is to maintain separate accounts within the Quality Jobs Program Incentive Leverage Fund for each qualifying establishment, and to provide for the deposit therein of the incentive payments and withholding taxes apportioned to the fund by the Act.

¶ 8 The bonds are secured first by transfers to the Fund of the incentive payments under the Oklahoma Quality Jobs Program Act that Michelin and Goodyear have elected to forego. The second level of security for payment of the bonds consists of transfers of withholding taxes attributable to a qualifying establishment, as provided in sections 3658(E) and 3659 of the Act. Those two sections provide that for each fiscal year during which any obligations issued by the ODFA under the Act remain unpaid, the Oklahoma Tax Commission is directed to compute the amount of withholding taxes attributable to employees of the qualifying establishment whose wages are subject to the levy, and transfer to the Fund an amount of withholding taxes required to equal the difference between the incentive payment deposit and the amount to be certified by the ODFA not later than January 1 and July 1 of each year that will be necessary for payment of principal interest and other costs for the succeeding six-month period.

¶ 9 Section 11 of the Act (Laws 2002, ch.

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Cite This Page — Counsel Stack

Bluebook (online)
2004 OK 26, 89 P.3d 1075, 2004 WL 728854, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-oklahoma-development-finance-authority-okla-2004.