otc email 5

8/6/2019 OTC Email 5

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o f

Dawn Cash

From: Dawn Cash

Sent: Monday, February 08, 20106:36 PMTo: Tony Mastin

Attachments: HB3038lntro.doc

I'm having her fix the 2131'Sversus 1/3rd deal at the end, but I'm wondering if you think we'reo ff inassuming that all these changes would create, generally, 75%of creditsgenerated/ claimed.

Dawn Cash, DirectorTax Poli cyand Research DivisionOklahoma Tax Commission

405.521.312 3

2122/2010



Page I of 1

Dawn Cash

From: DawnCash

Sent: Tuesday, February 02, 2010 9: 14 PM

To: TonyMastin

Subject: follow up

I got a response from at some point during the weekend that he would let his clientknow we need the cap co information for the three entities. They had committed to having theone to us by the end of this week but he didn't get me any time frame for the other two. I willcheck with him on that and let you know.

Dawn Cash, DirectorTax Policy and Research DivisionOklahoma Tax Commission

405.5 2 1.3123

2/22/2010



Page 1of2

Dawn Cash

From: DawnCash

Sent: Wednesday, January 27,20103:55 PM

To; Tony Mastjn

Subject: RE: cap co report

I poke with . They are working on the data for one cap co:or something along those Jines. They say they didn't even know about this until after the

December deadline when called for some information on one he was working.They had to call their client to track down the letter and just got the information from themthis week. They say they can have the data to you by late next week. ..could be earlierdepending on weather, etc. They will probably close at noon tomorrow.

The primary concern, however, is that you are asking after THREE cap cos and they are onlyaware of one that they need to be preparing so I told them I would get with you to clarify whichthree.

from: TonyMastinS en t: Wed ne sd ay, Ja nu ary27, 2010 10:28 AMTo: Dawn CashSubject: RE: cap co report

Also, please call . They have not completed the survey for the last three cap cos.Please tell her we need the information quickly. Thanks.

Tony MastinAdministrator

From: Dawn CashSent: WednesdaYt January 27, 2010 9:36 AMTo: Tony MastinSubject: cap co re po rt

As you know, many Senators have filed bills on the report and now are asking for the existingreport. I old Jeanie that the first report is just now due and that we received the data from theentities in December but, to my knowledge, it hasn't been consolidated/finalized into a singlereport. but that she could anticipate and pass on that it would be ready before March 1. Is that

okay?Also, on the one deal they had denied credits on from 2006 investment. I pointed out toMonty and Charlie that 1577 had a grandfather clause to exempt everything that closed beforeNov 1 007 but I've never heard back from them on it. I will follow up if you like or I'm happyto stay out of it.

Interesting MVarticle, by the way.

2122/2010



Page 20f2


405.521.3 12 3

2/22/2010



Page 1 of 1

Dawn Cash

From: Daw n C ash

Sent: Thursday, January 21,201010:16 AM

To! To n y Mas tin

Attachments: GR .95%rev.doc

This is real1yquick and dirty and I have no idea exactly where they started with electric cars, soI've left that blank. I'm not sure I matched ANYof her numbers and she's not sure which dealthey went with on the sales tax permit fee so she had me use the biggest.


2/22/2010



OR100% 95%

1. Little Cigars $ 386,000 367,000

2. Electric cars

3. Vending Machine Fees 3.0 mil 2,850,000

4. Beer Remittances 1.15 mil 1,092,500

5 . Liquor/Wine 840,000 798,000

6. Decouple 10,850,000 10,307,500

7. Sales Tax Permit Fee ].1 mil 1,045,000

8 . Delay MV apport 16.4 mil 15,580,000

9. Sales/Use remittances 2,926,350 2,780,000

10. Franchise 7.8 mil 7,410,000

I I . Motor Fuel - - - _.. _ - -

12. Rural Sm Bus Cap 32,042,000 30,440,000

13 Sm Bus Cap 9,474,000 9,000,000



Page 1 of

Dawn Cash

From: Dawn Cash

Sent: Thursday, January 14,20102;28 PM

To: Tony Mastin

Subject: FW: cap co LRs

There areA TON. I was surprised at how big the stack was.

From: Lisa HawsSent: Thursday, January 14, 2010 1:46 PMTo: Dawn CashSubject: RE: cap co LRs

Copies of redacted Capeo fetter rulings will be sent to Rep Reynolds this afternoon.

Lisa R. HawsTax Policy and Research DivisionOklahoma Tax Commission

(40 5) 52,1-313 3

From: D aw ncashSent: Wednesday, January 13,2010 10:03 AMTo: L isa H aw sCc: R ickMillerSubject: cap co LRs

Lisa,Please have redacted copied of all the cap co LRs for 2007-2009 sent to Rep. Reynolds officeper his request.ThanksDawn

DawnCash, DirectorTax Policy and Research DivisionOklahoma Tax Commission

405.5 21.312 3

2/22/2010



Page I of 1

Dawn Cash

From: Dawn Cash

Sent: Thursday, December 31, 2009 2: 14 PM

To: Tony Mastin

Attachments: LR09 w208, Dec31 st.request. doc

Attached is a draft response to the request you sent this morning. Since this isone of those where apparently sent you new information on Dec 14th and Lisa issuedit on the 15th, while I was out of town, I never had a draft of the LR he was asking us to startfrom. So I've cut and pasted as best I could in an attempt to replicate exactly what you and Lisadid before.


4 0 5.5 21.3123

2/23/20]0



Octo ber 1 3,2 00 9

R e: O ur file num ber LR - 09-208

Dear Mr.

This letter ruling is in responseto your letter ruling request d atedDecember 11,2009 sent via em ail Decem ber 31, 2009, wherein you poseda series of ru lin g requests

relating to the R ural Venture CapitalFormation Incentive Act (68 O,S, §2357,71 et seq.),Follow ing a verbatim restatem ent of the facts as outlined in your letter, are the specificrulings requested an d our responses thereto.

The client, , is an Oklahoma lim ited liabilitycom pany, that anticipates m eeting the requirem ents of a"qualified sm all business cap italcompany" as defined in th e Small Business C apital Form ation Incentive A ct, Tit.68 O.S. §2357.60 et, seq. an d a "qualified rural small bus ines s cap it alcompany" as defined in theRu ral Venture C ap ital Form ationIncentive Act, Tit. 68 O.S. § 2357.7] et, seq. (collect ivelyth e "B usin ess Incentive A cts") (the "C ap ital C omp any").

The Capital Company intends to organize another Oklahom a lim ited liabilitycompany, , as an Investm ent Fund (the "Fund") for thepurpose of allow ing investors and/or lending institutions to m ake investm ents through theF un d in to eith er:0) a "qualified rural sm all business capita! com pany" as defined in Tit. 68O.S. § 2357.72(8), w hich w illill turn invest such funds into, ,

a lim ited liability com pany that anticipates m eeting the requirem ents as an "O klahom arural sm all business venture" as defined in Tit. 68 O.S.§ 2 35 7.7 2( 6) ( th e "Ven tu re" );01 ' (ii)d irectly in to th e Ven tu re.It is intended for all investm ent proceeds contributed to the Fund toqualify for the Oklahom a tax credits provided for in theRural Ven tu re C ap ital F orma tio nIncentive Act, Tit. 68 O.S.§ 2357.71 et, seq. A diagram of the proposed structure of theinvestm ents is attached hereto as E xhibit "A ".

Before raising capital from investors, the Capital Com pany respectfully requests aletter ruling from theOklahoma Tax Comm ission that the proposed investm ents qualifyfor the state credits provided under the Business Incentive Acts. The Capital Com panyrequests that the Tax Policy and R esearch D ivision issue a letter ruling pursuant to R ule710: 1- 3- 73 (e) that, under the specific facts indicated, the investors w ill be eligible toutilize the state credits upon their investm ent in the Fund and as m ore specifically setforth below . The Capital Com pany m akes these requests on behalf of itself, the Fund} the



Owners, the Common Investors and Preferred Investors (each as defined herein), and theVenture.

STATEMENT OF FACTS:

] . The Venture is an Oklahoma limited liability company that intends to start a

medical services firm in County, Oklahoma. The Venture willacquire a complex including land, buildings, equipment and other assets. TheVenture needs financial assistance for the purchase of land and assets and to pay forworking capital associated with the project (the "Project"). The Venture's principle placeof business will be located in County, Oklahoma. The Venture will have within180 days at least 50% of its employees 01' assets located in Oklahoma. TIle Venture 1 8owned by two companies - 49% by' and 51% by

, is owned 100% by:. (collectively referred to as the "Owners"). As a startup

company the Venture needs financial assistance because neither the Venture nor theOwners have funds available for the Project.

2. The Fund will be formed as a limited liability company under Oklahoma law. TheFund will raise capital for the purpose of making venture capital investments in theVenture which, as discussed below, is intended to qualify as an "Oklahoma smallbusiness venture" as defined in the Business Incentive Acts. Investments will be madethrough the , an Oklahoma limited liability company(the "Capital Company.

3. The Capital Company is an Oklahomalimited liability companywith its principle placeof business within Oklahoma. The Capital Company is owned by

c , an Oklahoma series limited liability company, directly and through aseparate series known as , and I

an Oklahoma limited liability company. The Capital Companyis taxed as a partnership. The Capital Company is a for profit entity. One purpose of theCapital Company is to qualify as a "qualified small business capital company" and/or a"qualified rural small business capital company" as defined in the Business IncentiveActs and to make "Qualified Investments" of "equity,' "near equity" or "subordinateddebt;" in companies qualifying as "Oklahoma small business ventures" and "Oklahomarural small business ventures" as defined in the Business Incentive Acts. For purposes ofthis letter, the terms "equity," "near equity" or "subordinated debt," shall have the samemeanings as provided in the Business Incentive Acts.

4. The Capital Company will be capitalized with cash and contractual commitments tocontribute funds on demand to the Capital Company with a substantial penalty for breach ofthe commitments. The capitalization will be a minimum of $1 ,000.000 or such greater amountas required to meet the requirements of68 O.S. § 2357.61 (not more than twenty percent (20%)of the capitalization may be invested in anyone Oklahoma small business venture) and 68 a . s .§ 2357.72 (not more than twenty-five percent (25%) of the capitalization of the CapitalCompany be invested in anyone Oklahoma rural small business venture).



5. The Venture will be engaged in a lawful business activity under an IndustryNumber qualifying in 68 O.S. § 2357.72(6)(d) specifically Division I, Major Group ,Industry Group Number , Section of the Standard Industrial Codes and willqualify as a "small business" as defined by the federal Small Business Administration.

6. Neither the Fund nor the Capital Company shall own a direct voting interest in

the Venture other than the Qualified Investments.

7. The Fund will not borrow funds for its capital. The Fund will raise all of itscapital from investors. The Fund intends to issue two types of securities: (a) CommonUnits; and (b) Preferred Units. The subscription price for the Common Units may bemore or less per unit than the subscription price of the Preferred Units. The Fund mayissue multiple classes of Preferred Units. The subscription price for different classes ofPreferred Units may be different.

8. The Common Units will be purchased by " anOklahoma limited liability company (the "Common Investor"). The Common Investorwill be managed by the same manager of the Fund and the manager of the CapitalCompany. The Common Investor will be formed for the purpose of raising capital fromfinancial lending institutions to invest in the Fund. The Common Investor will invest inthe Fund in exchange for "Common Units" and will be the sole Common Unit holder.

9. The Common Investor will borrow all proceeds that it invests in the Fund from acommercial lending institution (the "Bank Loan"). It is expected that the Bank Loanmay have a guaranty issued by (the HUSDAGuaranties").The terms of the Bank Loan will require a loan guarantee from the Common Investor,the Preferred Investors, and the Owners. The Bank Loan will also be conditional uponthe Capital Company's Willingness to make the Venture Loan to the Venture and will becross collateralized with the Venture Loan.

10. To raise additional capital, the Fund intends to issue its Preferred Units to PreferredInvestors. Investors in the Preferred Units will also be admitted as Members of the Fund("Preferred Investors"). Prior to investing in the Fund, it is expected that certain of thePreferred Investors may borrow funds to purchase the units. Neither the Fund nor theCapital Company will be a borrower 01' guarantor of such borrowing.

11. The Fund will invest a portion of its capital in a special class of the CapitalCompany's membership interest (the "Fund's Investment"). The proceeds of the Fund'sinvestment in the Capital Company arc to be invested by the Capital Company into theVenture. The balance, if any, of any proceeds in the Fund after deduction for expenses andreserves, will be directly invested (the "Direct Investment") in the Venture pursuant to thedirect investment provisions of the Business Incentive Acts (68 O.S. § 2357.74). The DirectInvestment in the Venture will be under the same terms and conditions as the CapitalCompany's investment in the Venture. The Direct Investment will be limited to the lesserof 200% of the Fund's investment in the Capital Company or 200% of the investmentmade by the Capital Company in the Venture. The Fund's investment in the Venturedirectly or through the Capital Company is intended to qualify as a "QualifiedInvestment" as defined in the Business Incentive Acts.



, an Oklahoma limited liability company(the "Manager"). Neither the Preferred Investors nor the Common Investor shall beentitled to manage the Fund or the Capital Company.

17. Neither the Fund nor the Capital Company will elect to be treated ascorporations Neither the Fund nor the Capital Company will elect to be treated as

corporations for Federal income tax purposes and will therefore be classified as a"partnership" for federal and state income tax purposes and shall always be operated in amanner consistent with such classification. Both the Fund and the Capital Companyintend to be a "pass through entity" as that term is used in 68 O.S. § 2357.73 (g).

] 8. Offering materials involving the solicitation of any of the investments to bemade in the Fund shall include the disclaimer set forth in 680.S. § 2357.74 A (F).Contractual provisions shall be included in relevant documents which shall provide thatthe Qualified Investment shall not be transferred, withdrawn or otherwise returnedwithin five years of the closing of the transaction contemplated hereunder. The CapitalCompany w incomply with the requirements set forth in 68 o.S. § 2357.74 A (A) (2), (4) &

(5).

RULINGS REQUESTED:

Based onthese facts, the Venture respectfullyrequests a let ter rulingfrom the TaxPolicy and Research Division of the Oklahoma Tax Commission that:

1. The Venture will qualify as an "Oklahoma rural small business venture" asdefined in 68 O.S. § 2357.72(6).

It is th e ruling of the Tax Policy Division that J meets thedefinition of an "Oklahoma rural small business venture 1/ within the meaning of§2357.72(6), provided that at least seventy-five (75%) of J

gross annual revenues will be a result of activities conducted in areas deemed tobe non-metropolitan areas, based on the following representations:

a. . .... - will have at least 50% of its assets or employeeslocated in Oklahoma within 180 days after a qualified investment is made;

h. - . . - - - needs ftnanctalassistance in order to acquireland and assets as described in the letter ruling request;

c. . will qualify as a small business as defined by thefederal Small Business Administration,'

d. - - - is engaged in a lawful business activity underDivision I of the Standard Industrial Classification Manual; and

e. will expend within eighteen (18) months afterthe date of the qualified investment at least 50% of the investment for theacquisition of tangible or intangible assets which are used in the active conduct ofthe trade or business orfor working capital.



to the Preferred Investors which parties will be entitled to claim their pro rata share of thecredits.

The Tax Policy Division agrees that shareholders, partners or members of pass-throughentities that are entitled to a credit under § §2 357 . 7 3and 2357. 7 4of Title 68 may receive

an allocation of the credits from the pass-through entity provided the legal obligation torepay any borrowed funds must be unlimited and continuing, and must be equal to orgreater than the member's pro rata equity share of the pass-through entity and theallocation may not exceed the member's pro-rata equity share of the pass-through entity.

7. Immediately upon the statutory requirements being met, i.e, investmentinto the Capital Company and investment by it into the Venture or direct investment intothe Venture, the credits will pass through to the Preferred Investors and can beimmediately used by them against any tax then due for the Preferred Investor's currenttax year as well as future tax years under the carry-forward provisions of the statute.

Shareholders, partners or members of pass-through entities that are entitled to a creditunder § §2 357 . 7 3and 2357.74 of Title 68 may receive an allocation of the credits fromthe pass-through entity. Once allocated to the shareholders, partners or members, thecredits may immediately be used to offset various Oklahoma lax liability for the sameyear in which the investment was made, including Oklahoma income taxes, bankprivilege taxes and insurance company premium taxes when due. The credit may also beused to offset estimated income taxes; however, if the credit exceeds the amount of taxesdue, the amount of the claim not used may be carried forward to afuture taxable year butmay not be used to offset estimated tax liabilities to generate a refund of the credits.

This response applies only to the circumstances set out in your request datedDecember 11, 2009 sent via email to Tony Mastin on December 31, 2009. Pursuant toCommission Rule 71O:1-3-73(e), this Letter Ruling may be generally relied upon only bythe entity to whom it is issued and its investors, assuming that all pertinent facts havebeen accurately and completely stated, and that there has been no change in applicablelaw.

Please be advised that the issuance of this ruling does not preclude the OklahomaTax Commission from conducting an audit or examination under 68 Okla. Stat. §206 ofany report or return claiming a credit for the transactions outlined in this letter ruling. TheCommission reserves the right to issue any assessment, correction, or adjustmentauthorized under 68 Okla. Stat. §221.

Sincerely,

Oklahoma Tax Commission

Dawn Elizabeth Cash) DirectorTax Policy & Research Division



Page 1 o f 1

Dawn Cash

From: DawnCashSent: Thursday, December 3 t, 2009 11:50 AM

To: Tony Mastin

Subject: latest

Tony,This changes my answer to your question (yesterday) about whether negating the ability tospecially allocate would have a significant effect. Under this set up, special allocation becomescompletely unnecessary in order to market the deal.

In this scenario, I generate credits from a $100 investment where I put in $10 out of my pocketand co-sign a non-recourse loan for the other $90, which is actually collateralized by theventure. So for $10, I get back $30 in credits, based dollar for dollar on what is being termedmy "investment", In other words, I get two for one plus without a special allocation.

I went over this withHappy NewYear. and he confirmed that this is how it willwork.

Dawn Cash, DirectorTax Policy andResearch DivisionOklahoma Tax Commission

405·521.3123

2/23/2010



Page 1 of 1

Dawn Cash

From: DawnCash

Sent: Wednesday,December 30,20092:28 PMTo: Tony Mastin

I assume you still haven't heard from or anyone 011 that last LR request.


405.5 2 1.3123

2/23/2010



Page 1 of

Dawn Cash

F rom: Daw n C ash

Sent: Tuesday. November 24,20094;11 PMTo : To ny Mas tin

I also think the cap co numbers aren't reflective of what we would put on an impact regardlessof carryforward credits.


2123/2010



Page 1 of

Dawn Cash

F rom: Dawn C ashSent : Thursday,November 19, 20 09 1 1:0 0 AM

To: TonyMastin

Have we not interpreted the LR provision in 1577to mean we must issue an LR on the threeitems listed if the taxpayer insists?


405·521.3123

?i?1/?()1 ()



Page 1 of 1

Dawn Cash

From : Dawn Cash

Sent: Thurs day, November12,20092:42 PMTo: Tony MastinCc: Lisa Haws

Subject:

okay

Fro m: Ton y M astinSent: Thursday,November 12, 20092:39 PMTo: U sa H aw s, D aw ncashSubject:

How about 1Dam on Monday?

To ny MastinAdministrator

Fro m: Usa H awsSent: Thurs day, November12,20092:35 PMTo: Dawn Cash; Ton y M astinSUbject:

Just spen t the last hour with . W ish you bo th could have jo in ed me. He has several deals gettin g reaclo se an d is ho pin g fo r respo nses to her letter rulin g requests. C an w e get to gether sometim e n ext w eek

Lisa R. HawsTax Policy and Research Division

Oklahoma Tax Commission(405) 5ZI~3r33

2/23/2010



Page 1 of

Dawn Cash

From: Dawn Cash

Sent: Wednesday, November 11, 20099:44 PM

To: Tony Mastin

r have a list of things I need to discuss for whenever you're free.

I've reviewed the Division's survey request letter (cap co report) and I'm going to recommendthey change it significantly but I want to see what you think first. I'm concerned that thegeneral requests they are making are better suited to a potential audit review and would makeputting together a report a six month effort. I'm fine with making the general requests fordocuments supporting their answers as part of the request, but would prefer it besupplemental. In other words, I don't want to have to dig through the docs the cap cos give tofind answers. I want to ask the cap cos very specific questions that they answer for us so thatwe'll have consistent responses from them without having to interpret operating agreements,balance sheets or whatever,

Thanks


405.5 21.3 12 3

2/23/2010



Page 1 of

Dawn Cash

From: Dawn Cash

Sent: Wednesday, October 21,20093:40 PM

To: Ton y Mas tin

Subject: RE: Cap Co Credits Earned 06-07-0B.xls

y e s

F rom: To nyMastinSent: Wednesday, October 21,20093:19 PMTo: Dawn cashSubject: cap Co Credits Earned 06-07-0S.xls

Does this look right?

Also, please forgive me for losing my temper in the meeting.

2/24/2010



Page 1 of

Dawn Cash

From: Dawn Cash


To: Tony Mastin

Subject: RE:

It can wait until tomorrow, but I need to talk GP levy (going down to 4%) with you this week iwe can.

From: Tony MastinSent: Wednes da y, Octo b er21, 20092:26 PMTo: DawnCashSubject: RE:

That is what I wanted, Thanks.


From: Dawn cashSent: Wednes da y, Octo b er21, 20092:26 PMTo: Tony MastinSubject: RE:

r should have told you that this reflects total amount claimed on 511 CR

From: To ny MastinSent: Wednes da y, Octo b er21,20092:15 PMTo: Dawn CashSubject:

Please email me the actual amount of rural, small business, and venture capital credits takenin for tax year 2007.


2/24/2010



Page 1 of

Dawn Cash

From: Dawn Cash


To; Tony Mastin

Subject: RE:

rural: $49 milsmall: $14 milventure: $28 mil

From: Tony MastinSent: Wednesday, October 21, 2009 2: 15 PMTo: DawnCashSubject:

Please email me the actual amount of rural, small business, and venture capital credits takenin for tax year 2007.


2/2412010



Page 1 of 1

Dawn Cash

From: Dawn Cash

Sent: Thursday, October 15, 2009 1:25 PMTo: Tony Mastin

Attachments: Capeo Summary for 2006 10_14_2009, pdf; Capeo Summary for 200710_14_2009revised,pdf; Capeo Summary for200810_14_2009,pdf

Totals $417 million total exposure. I haven't sent these anywhere. Doug's in here, so I'm stuckfor a minute.


40 5.52 1.3123

2/24/2010



Page 1of2

Dawn Cash

From: DawnCashSent: Thursday, October 15, 2009 1 :14 PM

To: Tony Mastin

S ub ject: R E: Q uestio ns o n Tax C redit Pro gram s

now?

Fro m: Ton y M astinSent: Thurs da y, Oc to b er1S, 2009 1: 10 PMTo: Dawn CashSubject: FW: Questio ns o n Tax C reditPrograms

When you have time, please discuss this with me.


fr om: Mike Reyno ld s [ma ilt o :m ike reyno ld [email protected]]Sent: Thurs da y, Oc to b er1512009 12:08 PMTo: Ton y MastinCc: Mark Ha rte rSubject: Que stio n s o n Tax C re ditPrograms

Tony,

Would you please provide the following information with regard to all of the venture capital taxcredit programs (68 O.S. Section 2357.7 and the Small Business Capital Formation IncentiveAct and the Rural Venture Capital Formation Incentive Act.), collectively "credit programs":

1. Any written policy or procedure provided to or used by employees of the Tax Commissionwhich relates to the administration or enforcement of the credit programs (exclusive of anyadministrative rule);

2. The number of auditors currently assigned to work on the credit programs with a breakdownof the number of auditors assigned respectively to the Section 2357.7 credit, the SmallBusiness Capital Formation Incentive credit(s) and the Rural Venture Capital FormationIncentive Act credit(s);

3. The total number of audits performed by the Tax Commission involving;

a. the "original" venture capital tax credit authorized by 68 O.S. Section 2357,7;

b. the Small Business Capital Formation Incentive Act credit(s); and

c. the Rural Venture Capital Formation Incentive Act credit(s).

2/24/2010



Page 2 of2

4. The result of any audit identified in Question No.3, which was performed prior to theeffective date of Enrolled S8 No. 1577 (2006 Regular Session) including the specific actiontaken with regard to a credit claimed but disallowed in whole or in part (within the limit of 68O.S. Section 205);

5. The result of any audit identified in Question No.3, which was performed on or after theeffective date of Enrolled S8 No. 1577 (2006 Regular Session), including the specific action

taken with regard to a credit claimed but disallowed in whole or in part (within the limit of 68O.S. Section 205).

If this information is not readily available please provide an estimate of the time required toprovide responses to the questions.

If there is a written policy(Question 1) Please feel you need to wait to assemble the answers tothe other questions before sendlng me that item. Please forward it asap.

Thank you for your assistance.

Representative Mike Reynolds

2/24/2010



Page 1 o

Dawn Cash

From:

Sent:

To:

Subject:

Dawn Cash

Monday, August 24,20091:17 PM

Tony Mastin

FW: CAPeO Report for 2008 Activity

Attachments: CAPeO report for tRe 2008.xts

The Small Biz one is wrong because he calculated the wrong percentage, but it's close enoughto give you an idea (and I've asked him to fix it). About $150 million in credits generated intax year 2008.

F rom : M ik e Kau fmannSent: Monday, August 24,200912:56 PMTo : Dawn CashC c: R ick M ille r

Subject: CApeDReport for 2008 Activity

Dawn:

A ttached is summ ary by CAPeo (Ru ra l a nd Small Busin ess)of 2008 investment activity from OTeforms 526 and 527.

Michae l KaufmannTax Poli cy Analy stOkla homa Tax Comm i ssio nP ho ne : ( 40 5) 5 21 -3 13 3

email : [email protected] NOTE : T he m aterials in clu de din th is tra nsm i ssio n maycontain pr iv il eged and conf identi alinformation from th ef il es and reco rdsof the O klahom a Tax C omm ission. Ifyoua re n ot th e re cip ie nt n amed, b e awa re th at u na uth oriz eddisseminat ion , d isc losure ,copying, o r lise o f in fo rm atio n o btain ed from th e files of th e O klah om a Tax C omm issio nstrictprohibited an d subject to b oth civ il an dcrim in al p en alties u nd er state an d fed eral law s. If yo u h av ereceived this m essag ee rro l', p le as e noti fy th eAgency imm ed ia tely at the telep ho ne n umb er listed ab ov e. A rrang em en ts w ill b e m ad efo r it sre tr ieval. Thankyou,

112/2010



SUMMARF OF SMALL BUSINb"SS CAPITAL COMPANY scnvtrr FOR CALENDAR 2008

Amount invested inSmall Buainesses by

iI I Small Businesses in whichBnsincsses "in investments were

" d Tmall Business Capital Company Capital Companies couju notion ma c ( argcts)

1

Invcsrinu Entity: Am onnr invested- .. $2,166,666 $1,666,667

Tar~et Companies: Amount invested! ????

TOT!\L $0S460,507 $85,507 1.. ~cn

Ilnvcstill~ Entities Amount invested$250,000$42500$37,500$50,OGO

TOTAL $ 3BO 000

'farget Company: Amount investedS460,S07

TOTAL $460,507$47,050,000 $0 4

Investing Entity: Amount invested"_ ..

$47,050,000~.~TOTAL $47,050,000

Target Companies: Amount invested.. _ . . -.

S13100,OOO$13,100,000$13,100000$7,750,000

TOTAL $47,050,000S2,329,400 2

Invcsrinz Entities: Amount invested-- - - ._ - $87,453,217

- $1,790333

I----$1,790,333$1,790333

";h)TAL $92,824,216

Tarnet Companies: Amount invested

$829,400$1,500,000

TOTAL $2,329400



S UB ' C ' IC

Amount invested inSmall Businesses hyC . IC

in SmallBusinesses "in

"

Businesses in whichinvestments were

d (Tna usmesa apua ompany ,apu~ ompames conjuucuon rna c .argcts

..~~.~, .. .~.. .~~ ..~~~~..~. ~" ~~,~.~~ . " $1,040,078 2

IInvesting Entities; Amount invested~~r"'Tr ,,~ '. , ,.

; $250,000.. .. -- -- .. . .

S12,500. - ... . .

$12500$6,250

$31,250$9,375$9,375$7,500$7,500

: $7,500: $7,500

$7,500

$312,500, $12,500

$31,250$12,500

; S31,250$375,000$31,250$312,500$12,500

TOTA.L $1,500,000

-Target Companies Amount invested. $557,918 -$482,160

TOTAL $1,040,078$ l , OOQ , oOO 1

!Investing Entity: Amount invested"

$1,000,000

:'l'argct Companies: Amount invested.. .

$1,000 000TOTAL $1,000,000

$925,000 $0 1

Investing Entity Amount invested~ . . , .. .- $925,000

TOTAL $925000

Target Company: Amount invested$925,000

TOTAL $925,000



s

Amount invested il lSmall Businesses byC ' l C

ill Small Businesses in whichBusinesses "in investments were

"all Business Capital Company aprta ,ompanies conjunction made (Targets)

S7,000,000 $138J5,2(,7 1

Il1ve$tinll; Entity Amount invested- _ .. . . "_ ~ .. ~ ....

$7,000,000

TOTAL S7000,000

Target Company: Amount invested_ _ _ , - _.. _..$20,815,267

Total $20,815,267$642,160 S O 2

Inves tillJ!'Entities: Amount invested5175,000

MM

$875,000

TOTAL $875,000

Target Company: Amount invested$210,000$432,160

TOTAL $642,160$376,244 S666,667 2

Investing Entities: Amount InvestedS8,582.. ~p - S O- SI,716-

r--- $32,612$133333

t---:S100,000

TOTAL 5376,244

farget Companies: Amount invested

I- ..... _ -- 542,9115333,333

TOTAL $376,244$2,341,552 S O 2

l!nvesting Entities: Amount invested. - - .. _ - ~

$117,078$2,224,474

TOTAL $2,341,552Target Companies: Amount invested

$841,552

_ • T • · •

$1,500,000

TOTAL 82,341,552

TOTALPOTENTIAL CREDIT (30% of investment)TOTAL CREDITS (Regular and In Conjunct ion)

Amount invested in Amount invested # of SmallSmall BUSinesses by in Small Businesses in whichCapital Companies Busiuesses "til investments were

S 63,164,941 S 16,234,108 19S 18,949,482 5 4,870,232

S 23,819.715



Page I of 1

Dawn Cash

From: Dawn Cash

Sent: Tuesday, August 04,20092:53 PM

To: Tony Mastin

the spreadsheet I have for 2006 reports the small biz differently than the rural and I can'tfigure out why, so I'm hoping you have a better one


1./')1?010



Page 1 of I

Dawn Cash

From: Daw n C ashSent : Tuesday, July 21, 2009 9:48 AM

To: Tony Mastin

Cc: Rick Miller; Mark Hendrix

Mark has dropped off these spreadsheets with Audrey but they are tentative until we canconfirm from Carol the status ofthe "other rebates" and specifically cap cos; I assume thatshouldn't take more than a few minutes

}1 'Y I


405.521.31 2 3

1i?f?01 ()



Page 10f3

Dawn Cash

From: Dawn Cash

Sent: Thursday I July 02, 2009 1:41 PM

To: Tony Mastin

Subject: RE: Letter Ruling LR~08-167 Clarification

It looks good to me. I have made a clerical suggestion:

However, please note the credit is not a fully refundable credit. The statutes specifically provide that ifthe tax credit exceeds the amount of taxes due, the amount of the claim not used may be carried forwardto a future taxable year. Therefore, the credit may not be used to offset estimated tax liabilities to generatea refund of the credits upon filing of the applicable income tax return.

From: TonyMastinSent: Thursday,July 02, 2009 11: 16 AM

To : Dawn CashSubject: FW: Letter Ruling LR~08~167Clarification

Please review my response. I promised to send it out this afternoon.

Please accept this email to confirm that shareholders, partners or members of pass-through entities thatare entitled to a credit under §2357.73 and §2357.74 of Title 68 may be used to offset estimated taxliabilities. This corrects the previous ruling that you received.

However,please no te thecredit is not a fully refundable credi t. Thestatutes specifically provide the is thetax credit exceeds the amount of taxes due, the amount of the claim not used may be carried forward to afuture taxable year. Therefore, the credit may notbe used to offset estimated tax liabilities to generate arefund o fthe credits upon filing of the applicable income tax return.


from:S en t: T hu rsd ay, Ju ly 0 2,2009 10:24 AMTo: Ton y M astinSubject: fIN: Letter Ruling LR-08-167 Clarification

Tony,

Please confirm.

Thanks,

31212010



Page 2 of3

From:Sent: Thursday, July 02, 2009 10:09 AM

Cc: I

Subject: FW: Letter Ruling LR-08-J67 Clarification

- This is the email that sent to Tony. mentioned yesterday that he hadn't heard anythingacx, I hink if we can get even email confirmation from Tony it would help with concern. Ifwe.reed to clarify in the language that a taxpayer's ability to obtain a cash refund where the credit is used tomake estimated tax payments; we can do that but we thought they might prefer to draft that language ifthey think it's necessary. Let me know. Thanks.

From:Sent: Thursday, June 04) 200910:40 AM

To: [email protected]:Subject: Letter Ruling LR-08-167 Clarification

Sent from my BlackBerry® wireless device from U.S. Cellular

From:Date: TIm, 4 Ju n 2009 10:29:08 -0500To:Subject: Letter Ruling LR-08-167 Clarification

Dear Mr. Mastin,

The Oklahoma Tax Commission issued Letter Ruling LR-08-167 on February 20, 2009 with asupplemental ruling on May 20,2009. This email requests clarification of the ruling provided inparagraph 7 of the supplemental ruling, which states as follows:

Shareholders, partners or members of pass-through entities that are entitled 10 a credit under §2 357 . 7 3and §2357 . 7 4of Title 68 may receive an allocation of the credits from the pass-through entity. Onceallocated to the shareholders, partners or members, the credits may immediately be used to offsetvariousOklahoma tax liabilities for the same year in which the investment was made, including Oklahoma

income taxes, bank privilege taxes and insurance company premium taxes when due, but no testimatedincome tax payments, as well asfuture tax years under the carry-forwardprovisions of the statute.

After further discussions with your office, we understand that, a credit under § 2357.73 and § 2357.74ofTitle 68~once allocated to the shareholders) partners or members of a pass-through entity, mayimmediately be used to offset various Oklahoma tax liabilities for the same year in which the investmentwas made; including, to the extent of the amount of tax shown as due on the completed return of thetaxpayer filed for such year, estimated income tax payments.

3/2/2010

mailto:[email protected]




Page J 01 j

Could you p lease confirm that this understanding is correct or, ifit is not correct, please contact m e at. Thank you for yourattention.

Regards,

Inte rnal Vi rusDatabase is out ofdate.Checkedby AVO ~http://www.avg.comVersion: 8.0.1381 Virus Database: 270.9.1/1781 ~ReleaseDate: 11/11/20088:59 AM

3/2/2010

http://www.avg.com/

http://www.avg.com/



Page 1 o f

Dawn Cash

From: Dawn Cash

Sent : Thursday, June 25,20094:17 PMTo: Tony Mastin

I need to talk to you about a cap co issue. Will you be around tomorrow?


405.5 21.31 23

'V) n ()1 n



Page 1 of 1

Dawn Cash

Fro m: Dawn Cash

Sent: Friday, June 12, 2009 10:32 AM

To: TonyMastin

Cc: Lisa Haws

just called me with a cap co question that I didn't completely understand whereafter year one of part owner of the pass-through entity sells out and new owner is buying into itsolely for the federal new markets tax credits it's generated (which only get doled out in acertain percentage year after year for seven years or something) and where the new owner isn'ta guarantor as the previous owner was of any of the debt used to create the initial deal (whichgenerated the state credits).

He basically wants to know do we have a problem with this? My knee jerk was "no", because Idon't really care if they make business transactions for the sole purpose of tax credits if they aretalking about thefede1'al ones, but it also seems like tbis could be a slippery slope for us. I get

on the hook for the loan, credits are generated, then I ell out of my part the entity.. iscalling this sale one that is "for a legitimate business purpose" like that's good enough, but it'sjust a red flag to me. In fact, as I try to explain it to you, I become more convinced it could benot good.

Anyway, I old him that I was pretty hesitant to give him an answer without seeing it in writingbut he's, of course, in a rush to close something next week. So, sorry to do this to you, but I hadto suggest he talk to you next week.

Enjoy!Dawn Cash, DirectorTax Policy and Research DivisionOklahoma Tax Commission

3/2/2010



Page I of 1

D aw n C ash

From: Dawn C ash

Sent: Wednesday, May 20,200912:04 PM

To: Tony Mastin

I'll have a list this afternoon of bills we are tracking with decertifications. Also wanted to pointout to you that SB 244 is the cap co bill I mentioned to you last week that remains a shell.


40 5.52 1.312 3

3/2/2010



Page 1 of 1

Dawn Cash

From : Dawn Cash

Sent: Wedne sd ay, April29, 200910:00 AM

To: To ny Mastin

Subject: FW: Okla 8ml Biz Capftallncentive Tax Credit - SBA SizeStandards in 6 8 O .S. 2 357.7 2(6)(e)

Attachments: Rura l 8ml B iz C re dit 2 357 .7 2(6)(e) s ugge ste d la ngu ag e. PDF

keeps calling me 011 this and I need your input before I discuss with him.Thanks

Prom:Sen t: Friday , Feb ruary 27 ,20096:00 PMTo : [email protected] aw n C ashSubject: Okla Sml B iz C ap Jta l In ce ntive Tax C re dit - S BA S Ize S ta nd ard s In 6 8 O .S . 2 357 .7 2 (6 )(e)

Rep re sen t ative Hickman& Po lic y D ire cto r c as h,

Attached Is a draft o f the lan guage I suggested separately to each o f y ou this w eek In ten ded to slightly inth e s ize o f Sma ll B u sin es s c ompa n ie s e 1ig !b le f o r a C re dit tra n sa ctio n .

T han k y ou fo r co nsiderin g it an d an aly zIn g the po ssib le reven ue effect o n the S tate o f O klahoma fo r poin cre ase s in u se o f th e C red it b y sligh tly larger Sma ll B usin ess com pa nie s, w hich w ou ld a lso b rin g m o reemp lo y ee s to Ok la homa.

Please call m e w ith an y questio ns o r explan atio n o f the tho ught pro cess b ehin d the exact lan guage. A lsoa va ila ble to a ssist w ith a ny e xp lan atio n fo r o th er p erso n s w hich m igh t b ecom edesirable, Regards,

T his electro n ic message tran sm issio n con tain s in fo rmatio n from the law firm of which mco nfiden tial o r privileged. T he in fo rm atio n is in ten ded to b e fo r the use o f the in dividual o r en tity n amIf y ou are n ot the in ten ded recipien t, b e aw are that an y disclo sure, co py in g, distrib utio n o r use o f the coth is in fo rm atio n is p ro hib ited . If y ou h ave re ce ived this e le ctro n ic tran sm issio n in erro r, p lea se n o tify u

immediately by telephon e o r by electro n ic mail (reply).

3/3/2010





OSCN Found Document.Definitions Page 10f3

~2:l0klahoma Statutes Citationizedt51Title 68. Revenue and Taxation~~Chapter 1 - Tax Codes~Rural Venture Capital Formation Incentive Act~rticle Article 23 ~ Income Tax@hSection 2357.72 - Definitions

elle as: o.S.§. __

A e v - e :

As used in the R ural Ven ture C ap ital F orm atio n In cen tive A ct:

1 . "Acquisitio n " m ean s th e u se o f ca pital b y an Oklahom a ru ral sm all b usin ess ven ture w ithin six (6 ) mono b tain in g th e cap ita l to pu rchase fifty -o n e p ercen t (5 1% ) o r more o f the vo tin g in tere st e ntitled to ele ct thgo vern in g b o ard, o r Its equivale nt, o f an y o th erlegal en tity, re ga rdle ss o f th e lega l fo rm o f the en tity. A s used inthe R ural Ven ture C ap ital Fo rm atio n In ce ntive Act, "a cquisitio n " d oes n o t m ean the right to particip ate inthepro ceed s from sa le o f go o ds o r service s, w hethe r den omin ated a ro yalty, ro yalty in terest o r o the rw ise, ann o t m ean th e righ t to in telle ctua l p ro perty, w he th er the righ ts arise from co py right, trademark o r paten t law

2 . "Cap ita liza tio n " means th e amoun t o f:

a . an y fun ds tha t h ave a ctu ally b ee n co n trib ute d to the qua lified ru ral sm all b usin ess ca pital compan y,

b . an y co n tractual commitm en t to pro vide fun ds to the qualified rural sm all b usin ess ca pital compa nyto t he exten tthat such comm itm en t is p ay ab le o n d em an d an d ha s su bsta ntial eco nom ic pe naltie sfor breach of thecommitm en t to pro vide such fun ds,

c . any a llo c ationof ta x credit au th ority aw arded to th e qu alified ru ral sm all b usin ess ca pital compan y b ytheCommun ity Dev elo pmen t F in an cia l In stitu tio n s Fund purs ua ntto S ectio n 4 5D o f the In tern al R even ue C ode o f1 98 6, as am en ded, to the exten t such allo catio n has n ot b een previo usly design ated b ythe qua li fied rural smallb usin ess cap ital compa ny as co n templated b y S ectio n 4 5D (b )(1)(e) o f the In tern al R even ue C ode o f1986, asam en de d, an d

d. a ny fun ds lo an ed to th e qua lified ru ral sm all b usin ess cap ita l comp an y, w hich is licen se d as a rural b usin ve stmen t c ompany und er7 U .S .C ., S ectio n 2 00 9cc et se q., o r an y successo r statute,by th e U .S . Sma llBu sin es s Adm in is tra tio n o r U .S . Dep artmen tof Agriculture;

3 . "E quity an d n ear-e quity secu rity " m ea ns common sto ck , pre fe rre d sto ck , w arran ts o r o the r righ ts to subto stock orits equivalent, or an in te re st ina lim ite d lia bility c ompany, p artn ersh ip , o r s ub o rd in ate d d eb t th at isc on ve rtib le in to , o r e ntitle s th e h old erto re ce iv e u pon Its e xe rcis e, c ommon sto ck , p re fe rre d s to ck ,a royaltyor netp ro fits in te re st, o r a n in te re st in a lim ite d lia bility c ompany o r p artn ers hip ;

4. "Fin ancia l le nding in s titu tion " mean sa b an k, cred it u nio n , savin gs a nd lo an , commercial fin an ce compa nyo ther en tity p rin c ip ally engagedin th e e xte ns io n o f c re dit:

5 . "Non metro po lita n a re a" meansa U areas o f the state except a co un ty havin g a po pulatio n in excess o f o nehun dre d th ousa nd (1 00 ,0 00 ) perso n s a cco rdin g to the mo st recen t F ed era l D ece nn ia l C en sus;

6 . "O kla hom a rura l sm all b usin ess ven ture" m ea ns a b usin ess, in co rpo rated o r u nin co rpo rated , w hich:

a. has o r w ill have, w ithin o ne hun dred eighty (1 80) day s after a qualified in vestm en t is m ade b y a qualifiesm all b usin ess cap ita l compan y, a t lea stfifty pe rcen t (50%) o f its emplo ye es o r assets lo cated in O kla hom a,

b . n eeds fin an cial assistan ce in o rder to comm en ce o r expan d such b usin ess w hich pro vides o r in ten ds togoods o r s erv ic es ,

http://www.oscn.netlapplications/oscnJdeliverdocument.a sp ?cit eid=43 993O&Pr in tOnly ....rue 2 /27/

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OSCN Found Document.Definitions Page 2 of3

c has its p rin c ip al p la ceof busin e ss w ith in a nonmetropo lita narea o f th e s ta te a nd c ondu cts th e a ctiv ity re su ltin gin at le ast seven ty -five pe rcen t (7 5% ) o f its gro ss an n ua l reven ue from a n onmetro poUtan are a o f the state

d. excep t as o therw ise p ro vide d b y th is sub para gra ph, is e ngage d in a law ful b usin ess activity u nde r an y INum ber appearin g un der an y M ajo r G ro up Num ber o f D ivisio ns A, C ,D, E, F or I o f th e S tanda rd Indus tr ia lC la ss ific ation Manua l, 1987 revis ion w ith th e fo llow ing excep tion s:

(1) Majo r G ro up1 o f Divisio n A, an d o ,T tU t .- -' .. .Ss le « S1Cl.nJ.tI.".,J:r w~; t

r-ed.f!;+'-t- er'l..c..:r(2) Majo r G ro up2 of Div is ionA D.. r e ct\e ~1I t . ) .f\J 'f P ,, __ 6'0 %?_'t?;{;.._f_4 f~;-lIe BS./'::d

e . qualifie s as a sm all b usin ess a s de fin ed b y the fe dera l Sma ll B usin ess A dm in istratio { an dIi . , \". w e r: e. ,'.-(.f'e ei 0.... : r

f, expe nds w ithin e igh te en (1 8) mo nths afte r the d ate o f the qualifie d in ve stm en t at lea st fifty pe rcen t(50%)o fthe 1"p ro ce ed s o f th e qu alifie d in ve stmen t fo r th e a cqu isitio nof ta ngib le o r in tan gib le assets w hich a re used intheact ive conduc tof the trade o r b usin ess o rfor working cap it alfor the active co nduct o f such trade o r b usin ess fo rwhich the de te rmina tionof th e small bu sin e ss quaUfic ation pursuan tto sub para grap h e o f this paragra ph w asmad e. F or p urp os es o f th is su bp ara gra ph , "wo rk in g c ap ita l" s ha lt n o t in clu de co n su ltin g, b ro ke ra geor transactionfe es, P ro vid ed, th at th e O kla hom a Tax Commissio n, up on request an d d emon stra tio n b y a qua lified rura lb usin ess capital compan y o r an O klahoma rural sm all b usin ess ven ture, o r an in vesto r o r an autho rized a

an y such en tities, m ay e xten d the 1 8-mo nth p erio d o the rw ise re quired b y this sub paragra ph fo ra p erio d n o ttoexceed s ix(6) mon th s, P ro vid ed , th e e xp enditu re o f th e in ve ste d fu nd sby th e Okla homa ru ra l small b us in es ssha ll o therw ise comp ly w ith the re quirem en ts app licab le to the u sa ge o f tax credits fo r qu alifie d in ve stm enOkla homa rura l sm all b usin ess ven tu re, A s used in th is su bpa ragraph , "tan gib le a sse ts" sh all in clu de theacquisitio n o f rea l pro pe rty an d the co n stru ctio n o f im pro vem en ts u po n re al pro pe rty if such a cquisitio n ac on stru ctio n o th erw is e c omply w ith th e re qu irements a pp lica ble to th e u sa ge o f ta x c re dits fo r qu alifie d inin the Oklah om a ru ral sm all b usin ess ven ture , an d "in ta ngib le assets" sh all b e lim ited to comp uter so ftw arlic en s es . p aten ts , c opy rights and s im ila r items;

7. "Qua lifie d in ve stmen t" mea ns a n in ve stmen t o f fu nd sIn th e fo rmof "e qu ity " a nd "n ea r-e qu ity " a s d efin ed inpara gra ph 3 o f this sectio n o r "su bo rdin ate d d eb t" a s de fin ed in paragra ph 9 o f this sectio n ; p ro vide d, anin vestm en t w hich is co ntin gen t upo n the o ccurren ce o f an even t o r w hich is sub ject to b ein g refun ded o rin the ab sen ce o f such even t shall o nly b e deem ed to have b een m ade upo n the o ccurren ce o f the even t;

8. "Q ualified rura l sm all b usin ess cap ital comp an y" m ea ns a C co rpo ratio n o r a su bcha pterS co rpo ra tion , a sdefin ed b y the In tern al R even ue C ode o f1986, as am en de d, In co rpo rated p ursua nt to the laws o f O klah om a,limited l iab il ity companyor a re gis te re d b us in ess p artn ersh ip w ith a c ertific ate o f p artn ers hip flie d a s re qu ire db ylaw, which mee ts th e fo llow in g c rite ria :

a , th e c orp ora tio n , lim ite d lia bility c ompany o r p artn ers hip is o rg an ize d to p ro vid e th e d ire ct in ve stmen t oan d n ea r-equity fun ds to compa nie s w ithin this state,

b. the p rin cip al pla ce o f b usin ess o f the co rp ora tio n , lim ited liab ility comp an y o r partn ership is lo ca te d w istate,

c. the cap italizatio n o f th e co rp ora tio n , lim ited lia bility comp an y o r pa rtn ersh ip is n o t less tha n Five Hun dThousand Do lla rs($500,000.00), an d

d. the co rp ora tio n , lim ited lia bility compa ny o r pa rtn ersh ip ha s in ve stm en t o f n o t m ore tha n tw en ty -five p(25%) of Its capita lizatio n in a ny on e comp an y at a ny tim e du rin g th e calen da r y ea r o f the co rpo ratio n , limlia bility c ompany o r p artn ers hip ; a nd

9 , "S ub o rd in ate d de bt" m ea ns in de btedn ess w itha maturity date o f n ot less than five (5) y ears that Issub ordin ated to aU o ther in deb tedn ess o f the issuer that has b een issued o r is to b e issued to a fin an cial lenin stitu tio n, T he in deb te dn ess sh all n o t h ave a re paymen t sched ule th at is faster tha n a level p rin cipa l amoro ve r fiv e (5 ) y ea rs ,

http://www,Qscn,netJapplications/oscnldeliverdocument.asp?citeid=439930&PrintOnly::=true 2/27/2009

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OSCN Found Document.Defini tions Page 3 of3

Historical Data

Added by Laws2000, HB 2010, c. 339, § 2, eft . January1,2001; Amendedby laws 2001, HB 1904, c. 382, § 7,emerg . e ft. J un e4,2001 ( super seded document ava ilab le ); Amendedby laws 2004, HB 2124, c. 508, § 4,

emerg. eft. June 9, 2004 ( supers eded document ava ilab le ); Amendedby laws 2005, SB 905, c. 479, § 19,eme rg . e ft. J uly1,2005 ( super seded document ava ilab le ); Amendedby Laws2006, SB 1577, c. 281, § 18,emerg . e ff. J un e7,2006 ( super seded documen t ava ilab le ); Amendedby Laws2008, sa 2129, c. 440, § 7, eff.August 22,2008 ( super seded documen t ava ilab le ),

http://www .oscn.netlapplications/oscnldeliverdocument.asp?citeid=43 9930&PrintOnly=truc2127/2009

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Page I 01 !

Dawn Cash

From:

Sent:

To:

Cc:

Subject:

Dawn Cash

Saturday , Feb ruary 2 8, 2 00 9 1 2:41 PM

Tony Mastin

Lisa Haws

FW: O kla 8ml B iz C apital In cen tive Tax C redit - SBA Size Stan dards in 68 O .S. 2 357 .7 2Attachments: Rural 8ml B iz C redit 2 357 .7 2 (6 )(e) suggested lan guage. PDF

This is what, met with Chairman Hickman on this week He's got a client inwith about employees he's trying to fit in and he says he's had a couple of others

over the years for whom this has been an issue. He knows it willhave a revenue impactbecause he's opening the opportunity to more entities, but he) of course, wants it to be slight.

From:Sen t: Friday , February 27/ 20096:00 PM

To:S ub ject: O kla Sml B iz C apital In cen tive Tax C reditw SBA S ize S tan da rds In68 O .S . 2 35 7.7 2 (6 )(e )

Repr es en ta tiv e H ickman& Polic y D ire cto r Cas h,

Attached Is a draft o f the lan guage I suggested separately to each o f y ou this w eek in ten ded to slightly inthe size o f Sma ll B u sin ess compan ie s e ligib le fo r a C red it tra nsa ctio n .

T ha nk y o u fo r co n sid erin git an d an aly zin g the po ssib le reven ue effect o n the State o f O klahoma fo r po ssib lein creases In use o f the C redit b y slightly larger Small B usin ess compan ies, w hich w ould also b rin g m oreemplo y ee s to Ok lah oma.

Please call m e w ith an y questio ns o r explan atio n o f the tho ught pro cess b ehin d the exact lan guage. Also ,availab le to assist w ith an y explan atio n fo r o ther perso ns w hich m ight b ecome desirab le. R eqards,

This electron ic message tran smission con tain s in fo rmation from the law firm of - which mco nfiden tial o r privileged. T he In fo rm atio n is in ten ded to b e fo r the use o f the in dividual o r en tity n am eIf y ou are n ot the in ten ded recipien t, b e aw are that an y disclo sure, co py in g, distrib utio n o r use o f the co nthis in fo rm atio n Is pro hib ited. If y ou have received this electro nic tran sm issio n in erro r, please n otify usimmediately by telephone or by electron ic mall (reply).

3/3/2010




dOklahoma Statutes Citationizedt3Title 68. Revenue and TaxationSChapter 1 - Tax CodesdRural Venture Capital Formation Incentive Actt:1Article Article 23 - Income Tax!!lSection 2357.72 - Definitions

C ite a s: O .S .3 , _ _

As u se d In th e R ura l Ven tu re C ap ita l F orm atio n In ce ntive A ct:

1 . " Acqu isitio n" m ean s the u se o f ca pita l b y an O klah om a rura l sm all b usin ess ve nture w ithin six (6 ) m onob ta in in g th e c ap ita l to p urc ha se fifty -o n e p erc en t (5 1%) o r mo re o f th e vo tin g in te re st e ntitle d to e le ct th ego ve rn in g b oard , o r its e qu iva len t, o f an y o the r le gal e ntity , re gard le ss o f th e lega l fo rm o f th e e ntity . Asth e R ura l Ven tu re C ap ita l F orm atio n In ce ntive A ct, "a cq uis itio n " d oe s n o t m ea n th e righ t to p artic ip ate inp ro ce ed s from s ale o f go o ds o r s ervic es , w he th er d en omin ate d a ro y alty, ro y alty In te re st o r o th erw is e, a nn o t m ea n th e righ t to in te lle ctu al p ro pe rty, w he th er th e rig hts a ris e from c op yrig ht, tra dema rk o r p ate nt la

2 . "C ap ita liza tio n " m ea ns th e amo un t o f;

a . a ny fu nd s th at h ave a ctu ally b ee n c on trib ute d to th e qu alifie d ru ra l sma ll b u sin es s c ap ita l c ompa ny,

b . a ny c on tra ctu al c omm itm en t to p ro vid e fu nd s to th e qu alifie d ru ra l sma ll b us in es s c ap ita l c ompa ny toth at such comm itm en t is p ay ab le o n d em an d an d h as su bstan tial e co nomic p en altie s fo r b re ach o f th ec omm itm en t to p ro vid e s uc h fu nd s,

c . a ny a llo ca tio n o f ta x c re dit a uth ority awa rd ed to th e qu alifie d ru ra l sma ll b us in es s ca pita l c ompa ny b yCommun ity D eve lo pmen t F in an cia l In stitu tio n s F un d p urs ua nt to S ec tio n 4 5D o f th e In te rn a! R eve nu e C1 98 6, a s am en de d, to th e e xte nt su ch allo catio n h as n ot b ee n pre vio usly d esiqn ated b y th e qu alified ru rab usin ess ca pita l comp an y a s co ntemplated b y S ectio n 4 50 (b )(1 )(C ) o f th e In tern al R eve nue C ode o f 1 9ame nd ed , a nd

d . a ny fun ds lo an ed to the qua lifie d rura l sm all b usin ess ca pita l comp an y, w hich is licen sed as a ru ra l b uin ve stm en t c ompa ny u nd er 7 U .S .C ., S ec tio n200900 et seq., o r a ny successo r statute , b y th e U .S . Sma llBu sin e ss Adm in is tra tio n o r U .S . Depa rtment o f Agric ultu re ;

3, "E qu ity a nd n ea r-e qu ity s ec urity " m ea ns c ommon s to ck , p re fe rre d s to ck , w arra nts o r o th er righ ts to s uto sto ck o r its e qu iva le nt, o r a n in te re st in a lim ite d lia bility c ompa ny, p artn ers hip , o r s ub o rd in ate d d eb t tc on ve rtib le in to , o r e ntitle s th e h old er to re ce ive u po n Its e xe rc is e, c ommon s to ck , p re fe rre d s to ck , a ro yap ro fits in te re st, o r a n in te re st in a lim ite d lia b ility c ompany o r p artn e rs hip ;

4 . "F in an cia l le nd in g in stitu tio n " m ea ns a b an k, cre dit u nio n , s avin gs a nd lo an , c ommerc ia l fin an ce c omo th er e nU ty p rin cip ally e nga ge d in th e e xte ns io n o f c re dit;

5. "N onmetro po litan a rea " m ean s a ll a re as o f the state exce pt a co un ty ha vin g a po pu la tio n in exce ss o f o

hundr ed thousand(100,000) p ers on s a cco rd in g to th e mo st re ce nt F ed era l D ec en n ia l C en su s;

6 . "O kla homa ru ra l sma ll b us in es s ve ntu re " m ea ns a b us in es s, In co rp ora te d o r u nin co rp ora te d, w hic h:

a , h as o r w ill h ave , W Ith in o ne h un dre d eighty (1 80 ) d ay s after a qu alifie d in ve stm en t is m ade b y a qu alifisma ll b us in es s c ap ita l c ompa ny, a t le as t fifty p erc en t(50%) o f its emp lo ye es o r a ss ets lo ca te d in Okla homa,

b . n eed s fln an cia l a ssista nce in o rd er to comm en ce o r e xpa nd such b usin ess w hich p ro vide s o r in te nd s tog ood s o r s erv ic es ,

http://www.oscn.net/applications! oscnldeliverdocument.asp?citeid=43993 O&PrintOnly=true 2/27/2009

http://www.oscn.net/applications!

http://www.oscn.net/applications!




c. h as its p rin cip al place o f b usin ess w ith in a n o nmetro po utan a re a o f the state a nd co n du cts th e activIty rin a t le as t s even ty -fiv e per cen t(75%) of its gro ss a nn ua l re ven ue froma nonme tro p olita n a re a o f th e s ta te ,

d. e xce pt a s o the rw ise p ro vide d b y this su bp aragra ph , is e ngage d in a law fu l b usin ess activity u nd er a ny INum ber appearin g un der an y M ajo r G ro up N um ber o f D ivisio ns A,C, D, E , For I o f th e S tanda rd Indus tria lC lassif ica tion Manua! ,1987 revis ion w ith th e fo llow ing excep tion s :

(1) Majo r G ro up1 of Div is ionA, and o:t, l.' z , . ., . . ...9 $ / e e S 'to. PI d tt.. oj r : !.oJ& .J ..r-e & . .p i .(I -+ - e " . .c . .e ~

(2) Majo r Group2 of Div is ionA 6- r t: Cj'\.e. - J o - v.f'\ y P ., so %) a.f +Jv t> - -SMc..it Bu.'n1e

~- .-~~--"""\ ~·e,.e s+« .... d6e . qu alifies a s a sm all b usin ess as de fin ed b y the fe de ra l Sma ll B u sin ess A dm ln istraUo ,a ndL~~. /;...we r: e, I'

~.('~ e.. 0 .... ::s 'I '.I

f. e xpe nd s w ithin e igh tee n (1 6) mo nth s a fter the d ata o f th e qua lifie d in ve stm en t at le ast fifty p erce nT 5 0%p ro cee ds o f the qua lifie d in vestm en t fo r th e acquisitio n o f ta ngib le o r in ta ngib le a sse ts w hich a re use d Inactive co nduct o f the trade o r b usin ess o r fo r w orkin g capital fo rthe active co nduct o f such trade o r b usin ess fo rw hich th e d ete rm in atio n o f th e sm all b usin ess qu alificatio n pu rsu an t to sub pa ra grap h e o f th is p aragra phmad e. F or p urp os es o f th is s ub pa ra gra ph , "wo rk in g c ap ita l" s ha ll n o t in clu de c on su ltin g, b ro ke ra ge o r trafee s. P ro vide d, th at the O klah om a Tax Comm issio n , u po n re que st an d demo n stratio n b y a qu alified ruralb usin ess capital compan y o r an O klahoma rural sm all b usin ess ven ture, o r an in vesto r o r an autho rized a

a ny su ch en title s, m ay exte nd thets-monni p erio d o th erw is e re qu ire d b y th is s ub pa ra gra ph fo ra p erio d n o t toe xc ee d s ix(6) month s. Pro vid ed, th e exp en ditu re o f th e in veste d fu nd s b y the Okla hom a rural sm all b usin esh all o th erw ise comply w ith the re qu irem en ts a pp lica ble to the u sage o f ta x cre dits fo r qu alified in ve stm enOklah om a ru ra l sm all b usin ess ven ture, A s use d in th is sub pa ra grap h, "tan gib le a ssets" sha ll in clu de th eacquisition of re al p ro p erty a ndthe co n stru ctio n o f im pro veme nts u po n re al p ro pe rty if such a cquisitio n a ndc on stru ctio n o th erw is e c omply w ith th e re qu irements a pp lic ab le tothe u sa ge o f ta x c re ditsfor quali fied investmentin the O kla hom a rural sm all b usin ess ven ture, an d "in tan gib le a ssets" sh all b e lim itedto computer so ftware ,lic en se s, p ate nts , c op yrigh ts a nd s im ila r items ;

7. "Q ua lifie d in ve stm en t" m ea ns a n in vestm en t o f fun ds in th e fo rm o f "e qu ity " a nd "n ear-equ ity " a s d efinparagraph 3 o f this sectio n o r "sub ordin ated deb t" as defin ed in paragraph 9 o f this sectio n; pro vided, anin vestm en t w hich Is co ntin gen t upo n the o ccurren ce o f an even t o r w hich Is sub ject to b ein g refun ded o rin the ab sen ce o f such even t shall o nly b e deem ed to have b een m ade upo n the o ccurren ce o f the even t;

8 . "Q ualified rural sm all b usln ess capita! compan y" m ean s a C co rpo ratio n o r a sub chapter S co rpo ratio n,defin ed b y the In tern al R even ue C ode o f1986, as ame nd ed, in co rp orate d p urs ua nt to the laws o f O kla hom a,lim ited lia bility compa ny o r a re giste re d b usin ess p artn ersh ip w ith a ce rtifica te o f pa rtn ership file d as re qulaw, whic h mee ts th e fo llow in g c rite ria :

a. th e co rpo ra tio n , lim ite d lia bility comp an y o r pa rtn ership is o rga nize d to p ro videthe d ire ct Inves tmen t o f equ ityan d n ear-e qu lty fun ds to compa nies w ithin this sta te,

b. th e prin cipa l pla ce o f b usin ess o f th e co rp oratio n , lim ited lia blU ty comp an y o r p artn ersh ip is lo ca ted wstate,

c. th e c ap ita liza tio n o f th e c orp ora tio n , lim ite d lia bility c ompany o rpartnership is n o t le ss th an F ive Hun dredThousand Do lla rs($500,000.00). and

d. th e co rpo ra tio n , lim ited liab ility compan y o r p artn ersh ip h as in ve stm en t o f n o t m o re th antwenty-five percent(25%) o f its capitalizatio n In an yo ne compan y at an y tim e durin g the calen dar y ear o f the co rpo ratio n, limlia bility c ompany o r p artn ers hip ; a nd

9. "S ub ordin ated deb t" m ean s in deb tedn ess w ith a m aturity date o f n ot lessthan five (5) years th at issub o rd in ated to all o th er in de bte dn ess o fthe issuer that has b een issued o r Is tobe issued to a f inanc ia l lend ingin stitu tio n . The in de bte dn es s s ha ll n o t h av ea r epaymen t s chedulethat is fa ste r th an a le ve l p rin cip al amo rtiza tioover fiv e(5) years.

http://www.oscn.netiapplications/oscnldeliverdocument.asp?citeid=439930&PrintOnly=true 2/27/2009

http://www.oscn.netiapplications/oscnldeliverdocument.asp

http://www.oscn.netiapplications/oscnldeliverdocument.asp



rage 1 at 1

Dawn Cash

From: Dawn Cash

Sent: Thursday, February 19, 2009 9: 13 AM

To: Tony MastinSubject: RE: meeting

yeah. lisa point.ed that out to me. it's at 3; can you do 3?

Fro m: Ton y M astinsen t: 'rhursdey , Feb ruary 19, 20099:04 AMTo: Dawn CashSubject: RE: meeting

OK. By the way, the meeting email you sent me for next week did not have a time.

Tony Mastin

Administrator

From : Dawn CashSent: Wednesday, Feb rua ry181 20099:41 PMTo: Lisa H awsCc: Ton yMastinSubject: meeting

Lisa,is nreparing to send us an LR request. regarding an associated entity called

~who are going under. I've asked her to send it directly to you since they arewanting us to look at it quickly and I'm swamped. They feel that the statute doesn'tcontemplate a bankruptcy and selling off of the business or business and assets adequately.Obviously the biggie is that they fear this will trigger a recapture and investors suing overlosing their credits, etc. The LR request is specific to. But I think the meeting shewants is to cover this issue more generally. Apparently now has a number of entities whoare going through what she calls "work outs" where they are in default on their loans.Just FYI.ThanksDawn


405.5 2 1.3123

3/312010



Dawn Cash

From:Sent:To:Subject:

Dawn C ashWednesday, February 04,20094:00 PMTony MastinRE :

ok. I'll bring REIT language, too. :)

~----Original Message-----From: Tony MastinSent: Wednesday, February 04, 2009 3:58 PMTo: Dawn CashSubject: RE:

how about 4:30?

Tony Mastin

Administrator

-~---Original Message-----From: Dawn CashSent: Wednesday, February 04, 20093:54 PMTo: Tony MastinSubject: RE:

when is a good time? I also need to update you on the latest in GP counting.

-----Original Message-----

From: Tony MastinSent: Wednesday, February 04, 2009 3:38 PMTo: Dawn Cash; Lisa HawsSubject: FW:

Please review with me.


-----Original Message-----From.: ,_ _Sent: Wednesday, February 04,20092:2.5 PMTo: Tony MastinSubject: VW:

Tony,

Thanks for your time, but please review the below response and let me know your thoughts.

1



-----Original Message+-«From:Sent: Wednesday, February 04,200910:09 AMTo:Cc:Subject: RE:

The basic difference between a qualified leasing business under the SIC codes that qualify for taxcredits Under Division I "Services" in the 7000 series and leasing businesses that fal1under SIC codesin Division H : "Finance" in the 6000 series is whether or not the leases are shorter - annual-"operating'l leases or long term-l'capital't-finance leases.

The shalt term operating leases are a service. The long term capital leases are a credit tool thatessentially finances equipment for a customer. Under the tax credit statute SERVICES are eligible butFINANCE companies are 110t.

The basic question is - Ills a credit institution or a service provider?" That is whyit is important that our company is not in the finance business ie . does not offer long termfinancing lease or "capital" leases to its clients. As stated in paragraph 2 of our facts: "The Venturewill lease the stock to its clients pursuant to a standard, commercial, annual "operating lease",

will not engaged in long term leases, finance leases, or capital leases of its assets.

To clarify long term/financing/ capital leases have the followingcharacteristics: they are usually for the economic useful life of the asset, they have an interestcomponent, the lease payments build equity in the assets for the lessee, and there is usually the optionfor the lessee to buy the asset for little or nominal value at the end of thelease,

By contrast an operating lease is usually for a year 01' less, there is no interest component to the leasepayment, the lessee builds no equity in the asset, and the lessee has 110 right to buy the asset at the endof the lease term.

There are a multitude of Internal Revenue Code guidelines and Generally Accepted AccountingPrinciples guidelines that explain how to treat the difference in a capital lease from an operating lease.They are treated very differently from a legal, accounting, and tax perspective, For instance"ownership" ofthe asset is considered transferred to the lessee under a capital lease - the lessee haslegal ownership, potential legal liability, its records the assets as an asset onits books, and it gets totake depreciation expense as the owner. Under an operating lease legal ownership stays with the

2 .



lessor. The lessor shows the assets as an asset on its balance sheet, the lessor has the legal obligationsof ownership, and the lessor gets the depreciation expense.

It is vital to the business plan of (as outlined in our letter ruling request) that it be a sericeprovider not a credit facility. In order to offer the advantages to its clients of taking the legal liabilityand the financing liability of ownership of the Target Entities must offer only operating leases.If the leases were capital leases then the legal liability would still be with the Target Entity and theTarget Entity would be required to show the capital lease as an asset on its book and have acorresponding liability on its books.This defeats the purpose ofleasing the equipment in the first place.

Having said that it is important to note that according tofinancing entity they are a service provider.

business model they are not a

We classified under SIC 7359 "Equipment Rental and Leasing, Not elsewhere Classified", (andfor future reference if rents heavy equipment instead of stock to its next client then thatmay be under SIC 7353 "Heavy Construction Equipment Rental and Leasing"; also not ifrented exclusively :stock with-out drivers it would be under SIC 7513 "truck rental and Leasing-Without Drivers) because intends to rent a variety of different assets to different clients thebest overall SIC code is 7359. The bottom line is all of these SIC codes quality because they are allunder Divison I "Services".

The unqualified SIC code 6159 under Division H that Tony references is for "finance" leases only and

absolutely does not apply to because the type of lease arrangements described in the letterruling show that is not a credit or financing facility. The legislature may change the tax creditqualifications in the future to exclude operating rental/lease service provider lease companies (as wenas financing lease companies), but for now all operating lease codes under Division I are qualified.

If you have any questions 01' I can be of further assistance please contact me at

Regards..

3



From: '. _ ,,_ _Sent: Wednesday, February 04, 2009 9: 02 AMTo:Subject: FW:

Lets discuss

From: Tony Mastin [mailto:[email protected]]Sent: Wednesday, February 04, 2009 8:52 AMTo:

Subject: RE :

Sorry I didn't return your call. Things have been a little hectic. I still have the same concern about theproposal. The proposal submits that the venture is classified under SIC Code 7359 (Equipment Rentaland

Leasing) which is in Division I and qualifies the venture under the statute. However, that SIC Codespecifically states that it does not include "finance leasing" which is classified under SIC Code 6159.

SIC Code 6159 is for "establishments primarily engaged in furnishing intermediate or long-termgeneral and industrial credit, including the finance leasing of automobiles, trucks, and machinery andequipment. The classification specifically includes "machinery and equipment finance leasing" and"truck finance leasing". SIC Code 6159 is in Division H and does not qualify under the statute.

4



Hope this explains my concerns.

Tony Mastin

Administrator

From:Sent: Monday, February 02, 2009 10:00 AMTo: Tony Mastin

Subject:

Tony,

Take a look at the revisions and tell me your thoughts.

Thanks,

Internal Virus Database is out of date.

Checked by AVG~ http://www.avg.comVersion: 8.0.138/ Virus Database: 270.9.1/1781- Release Date:11/11/20088:59 AM

Internal Virus Database is out of date.Checked by AVG - http./jwww.avg.comVersion: 8.0.138/ Virus Database: 270.9.1/1781- Release Date: n/n/20088:59AM

5

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http://http./jwww.avg.com

http://www.avg.com/



Page 1 of 1

Dawn Cash

From: Dawn Cash

Sent: Thursday, January 29, 20093:48 PM

To: Tony Mastin

Cc: Lisa Haws

Subject: FW:

We can cover all but one ofthese questions. I know we've just discussed the last one a fewweeks ago, but I can't remember the result. So how do you want us to handle the question ofwhether one can buy in after the deal is done and still be allocated the credits from the dealthat occurred before they bought in to the business?

From : lisa H aw ssent: Thursday, January 29/ 2009 1:36 PMTo: Tony Mastin; Dawncash

Subject:called w J 2 questions:

1. They are in the process of distributing Form 526A to the partners who have earned tax credits. Do thepartners just attach that form to their state tax return filed on April15? (I am guessing that the investor includesthis form wI their annual tax return).2. If a partnership earns credits In 2008, must they allocate all of the credits in 2008? Or can they allocate themin 2009? Can they allocate 2008 credits to a new partner who joined the partnership in 2009?Thanks

Lisa R .HawsTax Policy and Research DivisionOklahoma Tax Commission

(405) 51.1~3l33

3/3/2010



Dawn Cash

From:Sent:To:Subject:

Dawn CashWednesday, December 31, 2008 12:04 PMTony MastinFW: Follow up

-----Original Message-----From:Sent: Tuesday, December 30,20086:03 PMTo: Dawn Cash;Subject: Re: Follow up

Dear Dawn,Thank you for the update. I very muchappreciate the communication that we have had with youduring the last weeks. It is unfortunate that our communication did 110tstart soon enough this year toresult in letter rulings for the three projects we discussed Monday, and that is our fault in that wewere not able to submit them until November.

It s also unfortunate that I did not receive your initial letter assigning the cases to Lisa because if Ihad them I could have been communicating with her much sooner than December 15. Again that wasour fault in that our mail delivery broke down during an office change.

Without knowing who to contact other than you from November 15 to December 15, I tried yournumber and left messages with the receptionist and voicernail at least twice a week for those fourweeks. I know that you said you only received one of those messages and Lisa told me how crazy yourof-ficearrangements have been with your remodel. I just want to be sure that you understand why wefelt on December 12 that we had no choice but to ask for help in establishing the initialcommunication with your office.

We appreciate all of your help during the last two weeks, and we are thankful to know how your letterruling process works especially concerning how and who we should be communicating with at eachstep.

Have a Happy New Year.Regards, ~ ,

Hope you have a happy new year.

------Original Message-~-~--From: Dawn CashTo: ..Sent: Dec 30, 2008 5:00 PMSubject: Follow up

- ,We enjoyed meeting with you and ~yesterday. To follow up on that conversation, I wanted to let



you know that we will not be able to provide any additional affirmative letter rulings before the end ofthe year. We look forward to working with you further, as needed, in 2009.

I ope you enjoy lots of football over the holiday.Dawn

Dawn Cash, DirectorTax Policy and Research Division

Oklahoma Tax Commission

40 5.52 1.312 3

Sent from myBlackBerry® wireless device from U.S. Cellular

2



Page 1 of

Dawn Cash

From: Dawn Cash

Sent: Monday, December 15, 20084:47 PM

To: Tony Mastin

Subject: RE: cap co GP number

Reese just told me the $200 million was for '09. They were trying to determine whether webusted the 5%built in. He has not added it all up yet to see whether this would be correct for '09.

From: Tony MastInSent: Monday, December 15, 2008 11:40 AMTo: Dawn CashSubject: RE:cap co GP number

I understand your reasoning. Do we really know that there were only $140 million potentialcredits? If you are comfortable with that as the ceiling then I am fine reducing the potential

payout

Ijust read your last email. Negative $200 million for what?


From: DawnCashSent: Monday, December 15, 2008 11:14 AMTo: Tony Mastin

Subject: cap co GP number

I think we should drop the number we are using on the potential cap co credits taken against GPby at least $25 million.

We know that no more than $140 million potential credits were generated in '06. We've alreadypaid out on approximately $25 million on the GP side, which leaves $115million. We deductalmost $22 million on the income side for each year's forecast. So, in other words, we'veassumed that at least $22 million of the $140 million generated that year WON'T be takenagainst GP. That would take us from assuming a payout of $133million in GP credits over thenext 18 months to as low as $93 million.

What do you think?


405·521.3123

3/3/2010



Page 1 o

Dawn Cash

From: Dawn Cash

Sent: Monday, December 15, 2008 11:14 AM

To: Tony Mastin

Subject: cap CD GP number

I think we should drop the number we are using on the potential cap co credits taken againstGP by at least $25 million.

We know that no more than $140 million potential credits were generated in '06. We'vealready paid out on approximately $25 million on the GP side, which leaves $115 million. Wededuct almost $22 million on the income side for each year's forecast, So, in other words,we've assumed that at least $22 million of the $140 million generated that year WON'T betaken against GP, That would take us from assuming a payout of $133 million in GP credits

< over the next 18 months to as low as $93 million.

What do you think?

Dawn Cash,DirectorTax Policy and Research DivisionOldahoma Tax Commission

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Page 1 of

Dawn Cash

From: Dawn Cash

Sent: Monday, December 15, 200810:27 AM

To: Tony Mastin

Subject: 06 cap co

If I can get my hands on all of it} I think we might can show that $133 million in claims againstGR can't be correct or paid out by showing the amount of potential credits generated that year.'What do you think?

Dawn Cash, DirectorTaxPolicy and Research DivisionOklahoma Tax Commission

3/312010



Dawn Cash

From: Dawn Cash

Sent: Thursday, December 04, 20083:20 PM

To: Tony Mastin

Subject: LRs

Lisa and I met today, but neither of us completely understood your drawings onstuff which is why weneed to all sit down on those. On· ~ ,the outstanding LR that

called about is a question that, as I recall, you had already answered verbally whichis why I had it in my mind that it was complete. And it's the answer to the October

question that has come up or a similar issue in the request. I'm sorry that Idon't handle more of these without bothering you but I am really gunshy that I w inmisssomething significant. Hope you're enjoying your time off. I'll be out tomorrow.Dawn

Dawn Cash, DirectorTax Policy and:Research DivisionOklahoma Tax Commission

otc email 5

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