The 2005 legislative session ended up being an overall positive session for business issues. Action was taken in the 2005 Oklahoma Legislature that will benefit our state and business sector. The following is a recap of the business issues that were addressed this session.

Workers' Compensation - A significant workers' compensation bill was passed this session. The House and Senate could not reach an agreement in time to get a bill passed in the regular session, so a special session was called to take up the issue of workers' compensation. SB 1X, a measure which included language reflecting a compromise reached between the Governor, Speaker Hiett and President Pro Tempore Morgan, was passed in special session and signed into law by the Governor.

SB 1X, while not a perfect bill, does include substantial reform to the current workers' compensation system in our state. The bill has been estimated to save the businesses of this state as much as $120 million a year. SB 1X includes language to address attorney fees on that portion of a settlement that an injured worker's attorney has been able to secure, or value added. Attorneys will not base their charges on the part of the settlement to be paid by the injured worker's employer, but only on that part the claimant attorney was able to secure in addition to. Choice of physician will be selected by the employer. If the injured worker disagrees, he or she can provide a list of 3 doctors to the employer, and if the employer disagrees, the choice of physician then goes to the court for selection on a random list.

Click here to view an overview of SB 1X or click here to view the full text version of SB 1X.

Lawsuit Reform - Unfortunately, lawsuit reform was not achieved in the 2005 legislative session. HB 2047, lawsuit reform by Representative Todd Hiett and Senator Glenn Coffee, passed out of the House as a significant lawsuit reform bill. The Senate did pass the bill, but not before replacing the existing language with the language of Governor Brad Henry's "Texas Plus" tort reform proposal as originally introduced in House Judiciary from last session. HB 2047 went to conference committee along with two other lawsuit reform bills, SB 692 and HB 1554. No lawsuit reform bill emerged from conference committee. Lawsuit reform is vital to the business community, and we will continue to push for meaningful lawsuit reform next session.

Quality Investment Act - SB 755 did get final approval by the state legislature, but last minute changes were made to the measure to allow this issue to go to the state voters in the November 2006 General Election. The future of this program now rests with the voters of this state, and if passed, will enact the program based on $80 million minimum balance in the Rainey Day Fund and the State Equalization Board certifying growth revenue in the upcoming fiscal year over the last year. Click here to view the enrolled version of SB 755. HB 1619, which is the companion bill to SB 755 and contains the enabling legislation, was passed by the House too late to reach the Senate before they adjourned sine die. We will continue to work for passage next session and will have time to do it in that the measure itself will now be on the November 2006 ballot.

Health - A one year solution to the Medicaid funding crisis in our state was accomplished with the passage of HB 1088. This measure, which calls for the use of $63 million of one-time state revenue dollars, with no increase in fees or taxes for the state's hospitals, passed and was signed into law by the Governor. Use of these revenue dollars will allow Oklahoma to garner the federal Medicaid matching funds, while still giving state leaders enough time to work out a better long-term solution. The $63 million will be matched with $126 million in Federal dollars, for $197 increase in Medicaid funding.

Click here to view the full text of HB 1088.

Education - Significant education measures also passed this session. HB 1191 Higher Education Bond Proposal, which authorizes a $475 million bond issue for the college presidents' project list and another $25 million for a permanent bond bank for future projects on university campuses, passed and was signed into law by the Governor.

Other education bills that passed during the final week of the session provided not only funding, but they also implemented important reforms related to increased accountability and higher standards.

The final appropriations for common education totaled over $2.15 billion, which was the highest appropriations for education in state history. Some of the key spending provisions were:

• $1000 teacher salary increase ( $57.7 million)
• Full state funding for teacher health care ($32.8 million)
• Funding for education employee health care ($10 million
• Additional funding of state aid formula ($21.6 million)
• Funding for math and reading remediation ($7 million)

SB 982 - "Achieving Classroom Excellence" included several reforms designed to improve accountability and raise standards. The legislation mirrored the priorities established by the Oklahoma Business & Education Coalition (OBEC). The Chamber Executive Committee and the Education & Workforce Steering Committee endorsed the following concepts that were included in the final language:

• Full Day Kindergarten - Provided for a phase in of full day kindergarten throughout the state.
• High Stakes Testing- Created a task force to study, develop and implement end-of-instruction tests that students must pass in order to advance. The testing regime also provided remediation for students who do not pass the initial tests.
• Increased Math Standards - Requires completion of 3 years of higher math.
• 8^th Grade Math Exams - Standards requiring 8th graders to show mastery of key math and literacy skills. The language provides incentives and training programs for middle school math teachers and creates new middle school math labs.
• College Preparatory Curriculum - We supported making the OHLAP curriculum the standard diploma for all students unless parents "opt-out" and release students from taking the challenging curriculum.
• Concurrent enrollment in higher education courses - Provided incentives to encourage high school seniors to enroll in college level courses.

Click here to view the full text of SB 982.

Transportation - The legislature passed HB 1078, which increases funding for the Oklahoma Department of Transportation, adding $17.5 million in funding for next year, which includes $15 million for road maintenance, $2 million for the Heartland Flyer, and $500,000 for public transit. The funding will gradually increase over five to 10 years to a sustained level of $170 million a year.

Initiative Petition - Additional funding for maintenance and repair of Oklahoma's roads and bridges will be sought through State Question 723. "Oklahomans for Safe Bridges and Roads" has already kicked off their campaign to pass SQ 723. SQ 723 will appear on a September 13^th special election ballot. This measure will allow the voters of this state to decide if they want to increase the gas (5 cents) and diesel (8 cents) a gallon in state fuel taxes in order to raise $150 million a year to address our state's $7.5 billion backlog in road and bridge maintenance. The Chamber supports the passage of State Question 723 and has made a financial contribution to the campaign to promote its passage. Click here to learn more about SQ 723.

Federal Level - On May 19^th a personal visit was made to Washington, D.C., to visit with Senator Inhofe, Senator Coburn, Congressman Istook and Congressman Cole. Chamber Chairman Fred Hall was joined by Oklahoma City Mayor Mick Cornett, former Oklahoma City Mayor Kirk Humphreys, Chamber President Roy Williams and Dean Schirf, Vice President of Government Relations. Purpose of the meetings was to thank each member for their support in voting for the multi-year surface transportation plan and to request their respective support for additional funding to complete the I-40 Crosstown Realignment project that needs $180 million to complete. The measure is now in conference, with final language and amounts to be determined.

Tax Relief -Tax relief was delivered this session with a permanent reduction in state income tax rate from 6.65 percent to 6.25 percent plus an increase in the state's standard deduction from $2000 to $4000. This measure also provided an income tax cut exemption for retirees from $7500 to $10,000. Capital gains were also cut by allowing an elimination of the capital gains tax for property owned by Oklahoma corporations. Additionally, the state franchise tax for any business owing $10 or less annually was eliminated. Those qualifying would also be freed from having to file a state franchise tax return.