2021 legislative session deemed a success from Chamber perspective

Heading into the 2021 legislative session, one of the Greater Oklahoma City Chamber’s top priorities was ensuring all critical economic development programs used by the Chamber to recruit new businesses and help existing companies expand were protected.

“We felt going into session there were concerns with several programs and the Legislature would look at making some modifications,” said Mark VanLandingham, the Chamber’s senior vice president of government relations and policy. “The Chamber agrees if an incentive program is not accomplishing its intended purpose and the state is not receiving a positive return on its investment, it should be scaled back or eliminated.”

State lawmakers examined several state incentive programs this session to ensure they were indeed accomplishing what was intended. No program is as important in helping the Chamber achieve its economic development mission than the Oklahoma Quality Jobs Act.

VanLandingham said an amendment to legislation was introduced late in session that would have increased by $20,000 the average wage requirement for new or expanding companies in Oklahoma and Tulsa counties to qualify for the Quality Jobs Act. If passed, the amended bill would have disqualified more than 50% of the projects in the Chamber’s recruiting pipeline from qualifying for the Quality Jobs Act, he said.

“I believe there may be a concern among some legislators that projects/expansions in Oklahoma and Tulsa counties are perhaps getting too many benefits under the Quality Jobs Act. And that as a result, economic development is occurring more in those counties than rural parts of the state,” said VanLandingham.

However, Oklahoma City competes with peer cities such as Denver, Fort Worth, Nashville, and Albuquerque for projects. The proposed amendment to the Quality Jobs Act likely would have resulted in those projects locating in one of those cities rather than rural communities in Oklahoma. 

The bill containing the amendment – Senate Bill 936 – was passed by the House but did not make it out of conference committee when conferees from the Senate were unable to agree to the House amendments, resulting in no substantive changes to the Quality Jobs Act this year. VanLandingham expects the program will be further evaluated even during the interim period between sessions and stated the Chamber would be happy to assist in efforts to bring more economic development to rural parts of the state.

Five-Year Ad Valorem Exemption for New and Expanding Manufacturing Facilities

Another bill important to the Chamber during the 2021 legislative session was SB 609. That bill increased the qualifying investment amount for construction, acquisition, or expansion for new or expanding companies from $250,000 to $500,000 during calendar year 2022 and then indexed to inflation in subsequent years.

“As the session ended last year, the House and Senate passed legislation repealing the Five-Year Ad Valorem Exemption for new and expanding manufacturing facilities. At the request of the Chamber and others, Gov. Stitt vetoed that legislation; therefore, we anticipated an effort to modify this program could occur again this year,” VanLandingham said.

Although the qualifying investment threshold doubled under SB 609, VanLandingham said the threshold change was acceptable because it applied to projects in all counties in the state, not just those in Oklahoma County and Tulsa County.

Another priority item for the Chamber in 2021 was to enact regional transit legislation. SB 967 will grant limited tort liability protection under the Governmental Tort Claims Act to the railroad (BNSF) which ultimately could “step into the shoes of government” and operate a commuter rail system on its right of way in central Oklahoma.

“We were asked by the Regional Transit Authority of Central Oklahoma to take the lead in getting this legislation passed and we were able to accomplish that,” said VanLandingham, expressing confidence the legislation likely would have passed in 2020 if not for the shortened session due to the pandemic.

In related legislative action, the $8.8 billion FY 2022 budget approved this session by state lawmakers and signed by Gov. Stitt includes full funding for AMTRAK’s Heartland Flyer, a move the Chamber supported wholeheartedly throughout the session. The Heartland Flyer, which runs between Downtown OKC and Fort Worth, operates under a cost-sharing agreement between the Oklahoma and Texas departments of transportation.

Efforts have been on-going for many years to try and reestablish AMTRAK service to the north between Oklahoma City and Newton, Kan., thereby linking OKC to communities in northern Oklahoma, Kansas City, St. Louis, Chicago and other points along AMTRAK’s national network.

“Should service on the southern route ever be eliminated, then another long-standing Chamber priority of reconnecting Oklahoma City to the north with Newton, Kan., would become almost impossible,” VanLandingham stressed.

The president has identified the OKC-to-Newton, Kan., route as a priority for federal funding under his transportation funding plan for AMTRAK.

“Whether or not the northern extension ends up being enacted into law at the federal level remains to be seen,” VanLandingham said, “but it is good to see that it is now on the radar and being discussed.”

Other critical economic development legislative priorities

• Extension of the Oklahoma Quality Events Act – The Chamber led an effort in 2010 to create the Quality Events Act, which allows communities to capture a portion of the incremental sales tax revenues generated by high-economic impact events, such as horse shows and sporting events. House Bill 1121 was recently signed by Gov. Stitt to extend the QEA program through 2026. It was set to expire this year.
• Aerospace Engineer Tax Credit – The Aerospace Industry Engineer Workforce Tax Credit program has been a tremendous success since its creation in 2008, helping attract engineers for Oklahoma’s burgeoning aerospace industry from both inside and outside the state. However, some past recipients of the tax credit may not have received the proper accreditation from their respective college or university. To address those concerns, state lawmakers passed Senate Bill 893 this session that allows undergraduate and graduate programs of the same discipline of engineering at an educational institution to qualify for the tax credit if either program is ABET (Accreditation Board for Engineering and Technology) SB 893 was recently signed into law by Gov. Stitt.

VanLandingham pointed to other legislation heard at the state Capitol this session that impacted the Chamber or its members:

• OKC-County Health Department protected – HB 2504 would have provided the State Commissioner of Health de facto appointment authority over the executive director of the Oklahoma City-County Health Department. The bill failed to advance in the Senate after passing the House, meaning local control of the Department will continue for at least another year. HB 2504 remains alive for consideration in 2022, however.
• Gun legislation – HB 2465, signed into law by Gov. Stitt, allows a city to host concerts in public parks so long as they are secured with proper fencing, uniformed peace officers and metal detectors. This will allow concerts (without guns) in Scissortail Park and other locations.
• Data privacy legislation – HB 1602 would have placed costly regulations/fines on many Oklahoma companies through the enactment of regulations exceeding the federal requirements. After passing the House, the bill did not receive a hearing, but will likely be considered again in 2022.
• Medicaid expansion – The Chamber supported State Question 802 last June to increase health insurance coverage by expanding Medicaid to cover approximately 200,000 more Oklahomans under the Affordable Care Act. Oklahoma is responsible for 10% of the costs, while the federal government will pay 90%. A funding source for Medicaid expansion was included in the FY 2022 budget recently approved by legislators.
• Broadband expansion – Access to high-speed internet service throughout the state, including in underserved urban areas, is an initiative the Chamber continues to support. The FY 2022 budget includes a $42 million tax incentive for providers of broadband in unserved and underserved parts of Oklahoma.
• ODOT eight-year construction plan – Full funding for the Oklahoma Department of Transportation’s Eight-year Construction Work Plan is included in the FY 2022 budget. Transportation investment is a critical driver of economic development activity and the Chamber consistently supports full funding for this plan.
• Criminal justice reform – A $12.5 million appropriation was approved for the Department of Mental Health and Substance Abuse Services from the Oklahoma Medical Marijuana Authority Revolving Fund. The funds will be used on county/local programs for drug rehabilitation, mental health treatment, job training and education. These programs have helped reduce the inmate population at the Oklahoma County Jail by 35% over the last five years. The appropriation was actively supported by the Chamber and the Oklahoma County Criminal Justice Advisory Council. In addition, legislators overwhelmingly passed, and Gov. Stitt signed, HB 1795 that makes it easier for certain offenders released from incarceration to obtain a driver’s license, therefore giving them the opportunity to drive to and from work and become productive members of the workforce.
• Charter School Funding – The Chamber has supported creation of a funding mechanism to provide charter schools with funding to improve buildings and infrastructure. During the 2021 legislative session, state lawmakers passed SB 229, the Redbud School Funding Act, to address those funding challenges. The measure would provide $38.5 million in state grants to all public school districts that receive below-average local funding for building and infrastructure, including charter schools. Virtual charter schools are excluded from receiving the funds.

The 2021 legislative session was successful for the Greater Oklahoma City Chamber, considering all that was at stake.  And even though the session has concluded, you can rest assured the Chamber’s Government Relations team will continue to engage the business community and government officials throughout the coming months in preparation for next year’s session.

 This article originally appeared in the June issue of The POINT!