Legislative Update: Chamber makes progress as first deadline passes

The Greater OKC Chamber Business Advocate reports on significant actions taken by the Oklahoma Legislature on the Chamber’s legislative priorities. This first edition of 2023 encompasses activity at the State Capitol through March 2, the deadline upon which House bills had to advance from a House committee and Senate bills from a Senate committee to remain alive in the legislative process.

The 2023 legislative session began on Feb. 6 when Gov. Kevin Stitt delivered his fifth “State of the State” address, and his first since he was convincingly reelected in November to a second term. In his remarks, Gov. Stitt called for tax reform including lowering the state’s personal income tax from 4.75% to 3.99%, reducing the state’s corporate tax rate from 4.25% to 3% and eliminating the state’s 4.5% grocery tax. Gov. Stitt also called for the state’s colleges and universities to produce more in-demand degrees for nursing, teaching and engineering professions. He also advocated for several common education reforms, including education savings accounts, performance pay for teachers and targeted funding to improve reading.

This session, 3,079 bills and joint resolutions (1,901 House bills, 44 joint resolutions; 1,116 Senate bills, 18 joint resolutions) were filed by Oklahoma legislators, a modern-day record. The 2023 legislative session began with Republicans holding an 81-20 super-majority in the House and a 40-8 super-majority in the Senate.

The Oklahoma Board of Equalization met on February 17 and certified nearly $12.7 billion will be available for the Legislature to spend during FY2024. That represents a $2 billion increase over the current fiscal year. However, that figure is approximately $600 million less than the December 2023 estimate. When accounting for various recurring expenses, it is believed the Legislature will have just over $1 billion in surplus to spend.

CHAMBER SEEKS TO PROTECT TARGETED ECONOMIC DEVELOPMENT INCENTIVES AND SUPPORTS LEGISLATION TO ATTRACT MORE INVESTMENT IN TOURISM PROJECTS

The Chamber uses several of the state’s economic development incentive programs to assist with the recruitment and expansion of businesses in Oklahoma. For Oklahoma to remain competitive with other states who use these incentives, these programs must not only be retained but also, not weakened or made less available to all communities and economic developers which use them. The list of priority incentives the Chamber seeks to protect includes:

• Quality Jobs Act, 21st Century QJA, Small Employer QJA and the Prime Contractor QJA
• Aerospace Engineer Tax Credit
• Investment/New Jobs Tax Credit
• Historical Building Rehabilitation Tax Credit
• Cybersecurity/Software Engineer Tax Credit
• Five-year Ad Valorem Abatement and Sales Tax Exemption for Manufacturing Facilities
• Regional Home Office Insurance Premium Tax Credit
• Tourism Development Act

This session, the Chamber is supporting legislation to increase the annual cap on the Tourism Development Act (TDA) from $15 million to $30 million. Tourism has become Oklahoma’s third largest industry, with $10.1 billion in direct visitor spending generated in 2021. The TDA has been a critical financing component in the development of Oklahoma City’s 21C Hotel, First National Center and The Oaks entertainment district. The TDA allows developers to receive a small rebate of state sales tax it generates for a limited period for new tourism projects such as entertainment districts, destination hotels, arenas, museums, theme parks, cultural centers and other projects where at least 25% of revenues come from out-of-state visitors. Raising the annual cap on this program will make Oklahoma even more attractive for developers seeking to strengthen our tourism economy.

SB 394, authored by Sen. Bill Coleman (R-Ponca City), and HB 2866, authored by House Appropriations and Budget Committee Chairman Kevin Wallace (R-Wellston), would raise the annual funding cap on the TDA from $15 million to $30 million. SB 394 advanced from the Senate Tourism and Wildlife Committee by a vote of 10-1, and from Senate Finance Committee by a vote of 10-0, and is now available to be considered by the full Senate. HB 2866 advanced from the House Appropriations and Budget by a unanimous vote on Feb. 15 and is now available to be heard by the full House.

CHAMBER WORKS TO PROTECT CONTINUED VIABILITY OF TAX INCREMENT FINANCE (TIF) DISTRICTS AS AN ECONOMIC DEVELOPMENT TOOL

HB 1379 by Representative Tom Gann (R-Pryor) was introduced this session to make it significantly more difficult for a municipal or county government to establish a Tax Increment Finance (TIF) district. Rep. Gann’s legislation sought to impose a solution to a local issue in the Pryor/Mayes County area onto the rest of the state and, specifically, metro areas like OKC and Tulsa where TIF’s have been used as a highly successful economic development tool. HB 1379 would have required an affirmative public vote of eligible city or county voters to form a TIF, and imposed onerous criteria as obstacles the TIF’s Review Committee would be required to consider before a TIF could even be recommended for approval by the City Council or Board of County Commissioners.

The Chamber has been a staunch supporter of protecting current state law on TIF Districts to ensure the continued viability of this valuable economic development tool. A sampling of transformative Oklahoma City TIF’s include the Skirvin Hotel, Devon Tower, First National Center and the First Americans Museum. When private investments within a TIF district generate higher property values, the resulting increase in property tax revenue is reinvested within the district. This reinvestment funds improvements promoting the success of private sector investments as well as benefiting the district and the city through job creation and economic growth. TIF’s allow local governments to finance up-front costs such as infrastructure needs.

The Chamber joined with the City of OKC, State Chamber, Tulsa Regional Chamber, Oklahoma Municipal League and others to oppose HB 1379. That legislation did not receive a second “do pass” motion and therefore did not proceed to a debate and vote in the House General Government Committee. This is a significant early session victory for economic development efforts statewide.

CHAMBER SUPPORTS CRIMINAL JUSTICE REFORM EFFORTS

The Chamber’s primary focus on criminal justice reform this session is to ensure significant funding is directed to achieve the objective, and mandate, of State Question 781, which was passed by voters in 2016. This funding would invest savings generated from the decreased prison population (achieved through provisions of SQ 780, also passed in 2016) into treatment and rehabilitation programs. Such funding will address two primary roots of crime – mental health and substance abuse. In Oklahoma County alone, diversion programs have prevented an estimated 900 individuals from entering the criminal justice system. SQ 780 savings should be returned to Oklahoma County and other counties statewide in the form of a rebate, which would then be directed to fund additional diversion programs and generate multi-year savings as prison populations continue to decrease. SB 844 by Senate Appropriations Committee Chairman Roger Thompson (R-Okemah), which provides a framework for funding of SQ 781, unanimously passed Senate Health and Human Services and Senate Appropriations and now advances to consideration by the full Senate.

The Chamber also supports the enactment of meaningful Sentencing Reform. Our burdensome and unfair system needs to be replaced with a new reclassification system that provides certainty and uniformity across the state. An individual being sentenced in Washington County should not receive 13 years when an individual in Cleveland County is sentenced to five years for the same crime. A reclassification system that is fair and consistent will be immediately impactful and safely reduce the length of prison sentences. HB 1792 by Rep. Mike Osburn (R-Edmond), which seeks to enact sentencing reform, unanimously passed House Rules Committee on February 21, and will advance for consideration by the full House.

LEGISLATION TARGETING STATE TURNPIKE PLAN FAILS TO ADVANCE

The Chamber supports the $5 billion, 15-year ACCESS Oklahoma Plan to expand and make safety improvements to Oklahoma’s turnpike system. This long-term transportation investment will promote economic development and enhance safety and access throughout the state. Many projects in the ACCESS plan are in the Oklahoma City region. As traffic and economic activity continue to increase, especially on I-35, it is imperative that steps be taken now to relieve pressure on our transportation system.

One proposed turnpike route within the plan – the South (Norman) Extension – continues to generate public controversy and has led to controversial anti-turnpike bills being introduced this session. Currently, litigation over this piece of the ACCESS Plan has led to a halt on the entire ACCESS plan. To express the Chamber’s position that ACCESS Oklahoma should move forward, the Chamber has taken the following steps:

• Delivered public comments before the Oklahoma Turnpike Authority (OTA) Board.
• Highlighted our support at the Chamber’s Legislative Kickoff.
• Co-authored a joint op-ed with the State Chamber and Tulsa Regional Chamber.
• Scheduled a Chamber Forum on ACCESS Oklahoma on March 22.

The most troubling legislation aimed at turnpikes this session, SB 970 by Senator Shane Jett (R-Shawnee) and HB 2606 by Representative J.J. Humphrey (R-Atoka), would have required a public vote of affected property owners before a turnpike construction project could proceed. This would set a dangerous precedent for all transportation projects. Additionally, legislation deleting statutory authority for specific turnpike routes, including the South Extension, was filed and language was added to legislation requiring legislative approval for a turnpike project after a certain period. However, none of these bills advanced past the March 2 deadline.

CHAMBER FOCUSED ON DEFEATING GUN MEASURES THREATENING BUSINESS AND PROPERTY OWNERS’ RIGHTS

This year, more than 100 bills were filed to expand gun owner rights in Oklahoma. Most of those bills will be unopposed and enacted into law. However, there is an important section of the Oklahoma Self-Defense Act called “Business Owners’ Rights”. Those statutes protect the property rights of business owners and event hosts to prohibit firearms if they choose to do so. The “no firearms allowed” signs you see at the entrance to many businesses and events are posted pursuant to those property rights. All states have some version of business owners’ rights written in their firearms laws, including states like Oklahoma which have enacted Constitutional Carry legislation.

The Chamber is committed to ensuring the rights of business and property owners are not threatened or watered down by legislation being considered at the State Capitol. The Chamber has led the “Oklahomans for Business and Property Owners’ Rights” coalition for the past six years. This group is comprised of approximately 50 businesses, associations, law enforcement organizations and educational institutions. This session, we are opposing bills to allow guns on college campuses, at the Oklahoma State Fair and several additional pieces of legislation in this area.

Under current Oklahoma law, firearms and other weapons are prohibited at the Oklahoma State Fair. HB 1021, by Rep. Jim Olsen (R-Roland), seeks to take away the right of that event host to prohibit firearms. Senator Shane Jett (R-Shawnee) has a similar bill in the Senate (SB 920).

We also oppose legislation to allow firearms to be carried on college campuses. There are procedures in place which provide each university discretion to implement its own rules and procedures as to when a student will be allowed to carry a firearm on campus. Senators Nathan Dahm (R-Broken Arrow) and Rob Standridge (R-Norman), as well as Rep. Denise Crosswhite-Hader (R-Yukon), have bills which would allow firearms to be carried on campuses.

All legislation to allow firearms at the State Fair or on college campuses failed to meet the March 2 committee deadline.

EDUCATION

Improving education outcomes and helping schools produce the high-quality workforce our employers need is a Chamber priority. The education agenda is focused on three key areas: 1) enabling career tech and higher education institutions to produce more graduates with in-demand skills, 2) recruiting and retaining teachers, and 3) addressing critical needs like early childhood, mental health and increased classroom learning.

Our community needs more engineers and those with technical skills. In 2022, we supported targeted funding to help higher education produce more in-demand employees such as teachers, health care workers and engineers. This year one of the most critical bills, HB 2555 by Rep. McBride (R-Moore), is waiting to be heard by the whole House. The Oklahoma Critical Needs Scholarship legislation will provide up to $15 million in scholarships, through public-private partnership, to help students pursue degrees in engineering, computer science, cybersecurity and technical pathways.

Oklahoma and the nation have a teacher shortage. The Chamber supports rewarding teachers for performance and experience. There are multiple proposals moving forward to give teachers a salary increase, but there are two prominent teacher-pay bills. SB 482 by Senator Adm Pugh (R-Edmond) establishes a minimum $40,000 salary and provides graduated raises based on service and performance. HB 277 by Speaker McCall (R-Atoka) will give teachers a $2,500 pay raise, plus add $300 million to the Education General Fund and $50 million to the Redbud School Finance Fund.

There are a variety of bills to address the critical needs of our students such as mental health and improved learning. The Chamber supports HB 2674 by Rep. Rhonda Baker (R-Yukon) that is waiting to be heard on the House floor. It requires subject matter standards for computer science programs and includes credit for aviation and aerospace competencies. The Chamber also supports two bills to address student and educator mental health issues. SB 175 by Sen. Kay Floyd (D-Oklahoma City), named Evan’s Law, provides suicide prevention, and HB 1424 by Rep. Mark Vancuren (R-Owasso) creates an Education Employee Assistance Program.

CHAMBER EXECUTIVE COMMITTEE MEETS WITH GOVERNOR STITT

Several members of the Chamber’s executive committee recently met with Governor Kevin Stitt to discuss the Chamber’s and Governor’s legislative priorities. Issues covered included economic development incentives; education and workforce; criminal justice reform; firearms legislation, and transportation and turnpikes. The Chamber’s leadership extends its appreciation to Governor Stitt for his participation in this discussion.

LEARN MORE ABOUT CHAMBER PRIORITIES

Earlier this year, the Chamber released its 2023 Public Policy Guide, an annual publication that includes a full listing of the pro-business priorities that the Chamber will pursue at the Capitol. The guide also includes contact information for elected officials at the federal, state and local level. Read the guide at www.okcchamber.com/ppg.

For more information, please contact Mark VanLandingham.  

The Chamber will advocate on behalf of its members at the State Capitol throughout the 2023 legislative session in pursuit of making Oklahoma a top ten state for economic development. Read the full list at OKCChamber.com/legislative. To stay informed of these efforts, sign up for alerts at okcbusinessadvocate.com.

For more information, please contact a member of our Government Relations or Education staff.