Week 4 - Legislative Session Update

Tax Incentive Commission Meets, Begins Review of Nearly $2 Billion

 The Oklahoma Incentive Evaluation Commission met this week to begin reviewing more than $1.7 billion in annual tax credits, rebates and incentives in the most comprehensive effort ever undertaken to determine their effectiveness.

The Commission was established under House Bill 2182 by the late state Rep. David Dank, a Republican from Oklahoma City, with the goal of examining how the tax credits and incentives are being used and whether some should be eliminated or reformed. After Rep. Dank passed away during the legislative session, Oklahoma House Speaker Jeff Hickman spearheaded the effort to get the law passed.

The Commission is required to review each incentive once every four years, starting with the costliest incentives, and report its findings to the Legislature and governor each year. The Commission is made up of five voting and three non-voting members, including a private sector auditor, a professor of economics, a lay person, a certified public accountant and a representative from the Oklahoma Professional Economic Development Council. Hickman appointed Ron Brown, president and chief executive officer of the CSI Group, a private investigation company with experience in tracking down missing people and assets, to the Commission in January.

The members of the committee will work with outside experts to analyze the data.

House  Committee Approves Final Capitol Restoration Plan

 The House Appropriations and Budget Committee this week approved a plan to complete the restoration of the Oklahoma state Capitol. The measure, authored by Hickman (R-Fairview), would allow the state to issue up to $125 million in bonds to complete the Capitol Restoration Project, which began in 2015 and is scheduled to be finished by 2022. Under House Bill 3168, the bond would not be let until 2018 when other state bonds are paid off and those revenues will be directed to the Capitol bonds meaning no new state dollars will be needed as a current $350 million infrastructure bond funded by tobacco tax revenues will expire.

Legislation to serve as vehicle for pay raise for Oklahoma teachers passes committee

Oklahoma lawmakers passed legislation Wednesday to serve as a potential vehicle for a pay raise for public school teachers across the state.

The measure, House Bill 3129, passed a vote of the House Appropriations and Budget Committee. The bill is now eligible to be voted on by the entire Oklahoma House of Representatives.

 House Bill 3129 represents the intent of lawmakers to come to a consensus on funding mechanisms for a teacher pay raise. Funding options considered since the start of the legislative session include tax credit reform, tax exemption reform, spending reforms and other efforts to better allocate existing resources. 

On Feb. 16, a coalition led by University of Oklahoma Pres. David Boren announced it had begun gathering signatures to place on the ballot a proposal to increase Oklahoma’s combined state-and-local sales tax burden to 9.7 percent, which would be the highest in the U.S., in part to fund teacher pay raises.

Lawmakers said Wednesday many potential funding mechanisms are being considered as alternatives for providing recurring financing for a teacher salary increase.

Committee members said a salary increase would help retain quality educators. A teacher pay increase has been one of the priorities expressed most often by constituents in all corners of the state, according to legislators.

 Bill Aimed at Reforming Process for Selecting Judges Heads to House Floor

 A bill that would reform the process for nominating judges for the governor to appoint to judicial vacancies passed out of a House committee this week and now awaits consideration on the House floor.   

House Bill 3162, known as the “Oklahoma Appellate Courts Accountability Act” and introduced by House Speaker Jeffrey W. Hickman, would place a state question on the ballot to allow voters to change the section of the state Constitution that sets forth the authority of the Judicial Nominating Commission (JNC).

The JNC is a fifteen-member panel that receives and reviews all applications for judicial vacancies in all district and appellate level courts in Oklahoma and submits a list of three applicants to the governor for consideration. Six members of the panel are appointed by the governor, six members are selected by the Oklahoma Bar Association (OBA), one member is appointed by the Speaker of the House of Representatives and one member is selected by the President Pro-Tempore of the Senate. The final member is selected by the other members of the JNC.

Under Hickman’s proposal, all appointees to the JNC by the governor, Speaker of the House and Pro-Tempore of the Senate would serve at the pleasure of the appointing authority until replaced. The term limits of the six members appointed by the OBA and at-large selection would remain unchanged.  

The bill would also require the JNC, upon a vacancy in the Supreme Court, Court of Criminal Appeals or Court of Civil Appeals, to send a list of all applicants to the governor who meet the “constitutional and statutory qualifications” for judicial office, rather than only sending three applicants. The Governor’s appointment would require Senate approval, much like the Federal process and most other gubernatorial appointees.

Upon a vacancy in a district level court, the JNC would continue to review applicants and send three names to the governor for consideration as the commission does now. The only change to the process for district and associate district judges is clarifying the JNC send the names of all qualified applicants if there are only three or fewer applications.

The measure passed out of committee by a vote of 4-2 and now proceeds to the House floor where it will await consideration by the full House.

Protection for Oklahoma Retailers Passes House Committee

A House bill passed this week in committee is the latest effort to close a loophole which hurts retailers in Oklahoma. 

House Bill 2531, named the “Oklahoma Retail Protection Act,” was presented by Representative Chad Caldwell this week and would amend current law to allow the state to collect sales tax on transactions between a buyer from Oklahoma and out of state online retail sites. Oklahoma retailers have voiced complaints that Internet companies that don’t collect sales taxes have an unfair business advantage.  Businesses which have a physical presence in the state must collect and remit sales tax while out of state retailers do not.  Under current state law, Oklahomans are required to keep track of their purchases from out of state retailers and pay a use tax on their state tax return each year. Many taxpayers are unaware of this provision and it is rarely enforced as only 4 percent of taxpayers remit this tax each year. 

The bill passed the House Appropriations and Budget Committee 15-6 and is available for consideration by the whole House.

House Approves 9-1-1 Legislation

Legislation to reform and shore up the state 9-1-1 system was approved this week by the Oklahoma House of Representatives.

House Bill 3126, by state Rep. Josh Cockroft, increases the transparency and accountability for 9-1-1 fees and provides state coordination for improved 9-1-1 service delivery. The measure also replaces the funding that has been lost due to the drop in the use of landline phones with an increase to the individual 9-1-1 fee on each cellular contract. That fee would increase from 50 cents to 75 cents and is estimated to result in approximately $28 million.

Over the past decade, traditional landline fees have dipped an average of 45 percent due to users dropping their landline contracts. Over the same period of time, cellular fees have held steady resulting in a net loss for all systems. Currently, fees tend to disproportionately go to urban rather than rural municipalities, because they are tied to where calls are made, rather than where the individual calling resides, Cockroft said. 

Under the legislation, all 9-1-1 operations will be coordinated through a statewide director in the Oklahoma Department of Emergency Management. The legislation also:

  • Requires annual audits and reports from each dispatch center go to the Statewide 9-1-1 State Advisory Board.
  • Redirects the funding from fees to the dispatch center where the individual using 9-1-1 resides rather than where the contract was purchased;
  • Requires the fees to be paid to the Oklahoma Tax Commission and be distributed by the state advisory board; and
  • Requires the state advisory board to seek out efficiencies and cost savings.

The legislation was approved by a vote of 57-34 and will now advance to the Oklahoma Senate for consideration.

Bipartisan Bill Providing Insurance Mandate for Autism Coverage Heads to Full House

A bipartisan measure authored by more than 30 House Republicans and Democrats that would require health insurers to cover autism treatment for children cleared a House committee today.

House Bill 2962, by state Rep. Jason Nelson, would require a health benefit plan offered in Oklahoma to provide coverage for the screening, diagnosis and treatment of an autism spectrum disorder in children. The bill would limit the yearly maximum benefit to $25,000, but would place no limits on number of visits.

The Legislature last considered an autism insurance reform bill in 2008. Nelson said since then 43 states have implemented some form of reform to health plans to provide treatment for autism disorders.

House Bill 2962 passed out of the House Insurance Committee by a vote of 6-4 and now heads to the full House for consideration. 

Committee approves Task Force on Grocery Store Access

A House committee approved legislation this week to create a task force to examine the problem of healthy food access in both rural and urban communities with challenges for grocery retailers.

House Bill 2650, by Rep. Seneca Scott, creates the Task Force on Grocery Store Access. It was approved by a unanimous, bipartisan vote in the House Appropriations and Budget Committee.

Scott said that both urban neighborhoods and rural communities face challenges in attracting and retaining grocery stores. In urban areas, the challenges include constraints on physical space, urban design requirements and resident expectations of both the look and options available at the store. Both types of communities must have a grocery store that is more custom-tailored to their customer base.

Scott noted the recent closing of Wal-Mart locations in Oklahoma and elsewhere.

The legislation is now available for a hearing by the full Oklahoma House of Representatives.

Rep. Derby Introduces Liquor Modernization Measure

 State Rep. David Derby has introduced a measure that will allow voters to modernize Oklahoma’s liquor laws.

House Joint Resolution 1052, if approved by voters in the form of a state question, would simplify the marketing and sales of alcoholic beverages in the state by creating a three-tier system of manufacturers, wholesale distributors and liquor retailers.

The measure gives state legislators time to correct the many statutes involved if the state question is approved, Derby said. If they fail to make the necessary corrections, statutes in conflict with the new constitutional law would be rendered null and void.