The Business Advocate - May 4, 2018

View the 2018 Chamber Legislative Agenda

Business Advocate Newsletter

 

May 4, 2018
Inside this issue
 
  Introduction  
 

The 2018 Legislative Session began under challenging circumstances with the continuation of two special sessions that began last year and continued through April 10, 2018, and the early domination of the political environment by the "Step Up Oklahoma" Plan. This was a proposal by some of the state's most prominent business and civic leaders to address Oklahoma's ongoing budget shortfalls and provide an immediate pay raise for teachers. The stakes for the legislative session were further intensified by a nine-day teacher walkout in April that witnessed 30,000 teachers, support staff and public employees filling the Capitol daily.

Despite this political environment, the Chamber achieved success on all its major legislative priorities this year. This outcome can be contrasted with last session, where the Chamber was successful overall but failed to achieve two of its top priorities: a teacher pay increase and enactment of meaningful criminal justice reform legislation. This session teachers received a historic teacher pay increase and Oklahoma began to turn the tide against over-incarceration after the enactment of nine important criminal justice reform measures.

This End-of-Session edition of the Greater Oklahoma City Chamber Business Advocate will highlight the Chamber's performance in pursuing its legislative priorities during a memorable 2018 Legislative Session.

 

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  Legislature Passes Record Budget Agreement Prior to Adjourning On May 3  
 

The 2018 Legislative Session adjourned Sine Die on Thursday, May 3, following passage of the largest budget in state history which was signed into law by Governor Mary Fallin (R-Tecumseh) on April 30. SB 1600, the general appropriations bill, will provide approximately $7.6 billion to operate state government for FY 19 and, significantly, includes no agency cuts and provides many state agencies with increased appropriations.

For more information, please contact Mark VanLandingham.

 

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  Historic Teacher Pay Raise Achieved  
 

The achievement of a teacher pay increase of at least $5,000 per year has been a top priority for the Chamber the past two years. Although we were not in complete agreement with all of the new revenue measures which will be used to fund it, we are pleased an annual teacher pay increase of $6,100 (on average) was accomplished. It was desperately needed to retain and attract high quality teachers in Oklahoma. The $447 million revenue plan that passed the House on March 26 and Senate on March 28 represented a historic outcome: it was not only the first tax increase passed by the Legislature since State Question 640 was adopted in 1992, it also funded the largest teacher pay increase in state history.

Although the "Step-Up Oklahoma" plan was not enacted, it paved the way for the revenue-generating legislation that was ultimately enacted. The Step-Up proposal included a revenue package of approximately $700 million and would have provided teachers an immediate $5,000 pay raise. The plan was the product of significant compromise and was supported by many groups across the state including energy companies, the Chamber and the Oklahoma Education Association. However, HB 1033XX, the $581 million centerpiece revenue measure of Step-Up OK, failed to receive the supermajority required in the House on Feb. 12.

The revenue package ultimately enacted, contained primarily in HB 1010xx, raised the following taxes: 1) increased Gross Production Tax (GPT) from 2 percent to 5 percent for the first 36 months of production; 2) increased the cigarette tax by $1.00 per pack; 3) increased the gasoline tax by three cents per gallon and the diesel tax by six cents per gallon; 4) assessed a $5 per night hotel/motel occupancy tax (later repealed); 5) modified state tribal gaming compacts to allow Vegas-type gambling in the form of ball and dice games; and, 6) required internet sellers to collect and remit sales tax on Oklahoma sales.

For more information, please contact Mark VanLandingham.

 

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  Chamber/CVB Successfully Lobbies for Repeal of Hotel/Motel Tax  
 

The $447 million revenue package to fund the teacher pay increase originally contained a $5 per night hotel/motel occupancy tax that would have catapulted Oklahoma City from 71st highest occupancy tax among the 150 largest U.S. cities to the highest occupancy tax in the country (Tulsa would have moved up to #3). With Oklahoma City ready to break ground this summer on a state-of-the-art $200 million convention center and 605-room Omni Convention Center Hotel, the imposition of such a tax would have impacted our ability to recruit conventions. The Chamber/CVB engaged with partners in the tourism and hospitality industries and successfully lobbied for repeal of this $50 million tax, which was replaced in the revenue package by an online sales tax and the allowance of ball and dice games at tribal casinos.

For more information, please contact Mark VanLandingham.

 

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  Major Criminal Justice Reform Measures Signed Into Law  
 

The Chamber has been a strong advocate for legislation and funding for sentencing reform and rehabilitation/treatment programs to ease the financial drain on Oklahoma's criminal justice system, lessen the burden on jails and prisons throughout the state and allow non-violent, low-level offenders to enter the workforce more quickly. The Chamber was strongly supportive of the recommendations of the Governor's Task Force on Criminal Justice Reform and actively participated in the process that resulted in a number of important measures, which stalled last session, but advanced and became law this year.

The Chamber worked with Gov. Fallin, legislative leadership, the District Attorneys' Council, the State Chamber and others to negotiate legislation that allowed nine key reform measures to be signed into law by Gov. Fallin on April 26. There was clear recognition by all parties that Oklahoma cannot continue down an unsustainable path that was projected to increase Oklahoma's prison population 25 percent by 2026 and result in the need to construct three new prisons at a cost of $1.9 billion to taxpayers. The Chamber applauds all stakeholders involved for the enactment of these vital measures that demonstrate significant progress in a short time in changing the previous practices that led to the state becoming a national leader in incarceration. Following is a brief description of the key criminal justice measures:

  • SB 1098 - creates the Criminal Justice Reclassification Council to review and recommend changes to the Oklahoma Criminal Code to reduce the state's prison population.
  • SB 650 - authorizes no more than one nonviolent felony to apply for expungement if there are no new convictions within seven years.
  • SB 786 - eliminates the mandatory minimum sentence and allows a judge to sentence up to the current maximum sentence of seven years for burglary in the second degree, and creates a new felony offense, burglary in the third degree (defined as breaking into a vehicle), punishable by no more than five years in prison.
  • SB 649 - reduces enhanced sentences for certain repeat nonviolent felonies.
  • SB 689 - creates risk and needs assessment as a tool for sentencing.
  • SB 793 - changes the penalties for commercial drug offenses, and distinguishes conduct by possession with intent to distribute, distribution and manufacturing.
  • HB 2281 - adjusts penalties for many low-level property offenses, including larceny, forgery and other "paper crimes."
  • HB 2286 - creates an administrative parole process for nonviolent offenders who comply with case plans in prison so the Pardon and Parole Board can focus on more serious offenders, and establishes a geriatric parole release process for inmates 60 and older who have been determined to not be a public safety risk.

In addition, the state's budget agreement provides for $5 million to enhance criminal justice diversion programs, including $4 million for screening offenders in felony cases to assess whether a person is a high or low risk criminal, and $1 million to expand mental health and drug courts.

For more information, please contact Mark VanLandingham.

 

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  Chamber's Criminal Justice Measure on Pre-Trial Release Becomes Law  
 

The Chamber's Task Force on Criminal Justice Reform recommended two bills be pursued last session, one of which was delayed by need for an informal opinion by the Oklahoma Attorney General. This measure, SB 363 by Senator David Holt (R-Oklahoma City) (prior to his being sworn-in as mayor of Oklahoma City) and Representative Terry O'Donnell (R-Catoosa), sought to address the issue of jail overcrowding by giving special judges clear authority to grant pre-trial release to inmates who meet strict criteria. Significantly, the review by Attorney General Hunter's office determined that special judges did not have clear authority to grant pre-trial release under existing statutes. Increasingly, special judges are being called upon by district judges (who do have pre-trial release authority) to handle cases on lengthy criminal court dockets. SB 363 was passed in response to that review/informal opinion and provides special district court judges clear authority to issue pretrial release orders in appropriate cases. On March 8, SB 363 became the first policy bill signed by Governor Fallin this session.

For more information, please contact Mark VanLandingham.

 

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  Economic Development Incentives Protected  
 

As an economic development organization, the Chamber relies on a number of specific economic and community development programs to recruit companies to Oklahoma and promote the growth of our existing companies. All of these programs were protected this year. The critical programs the Chamber sought to defend include:

  • 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
  • Freeport (Inventory) Exemption
  • Five-year ad valorem abatement and sales tax exemption for manufacturing (except wind)
  • Oklahoma Regional Home Office Insurance Premium Tax Credit

The Chamber was concerned by HB 3225 introduced by Rep. Jadine Nollan (R-Sand Springs) that would have terminated all economic development incentive programs by Dec. 31, 2021. However, after passing the House Appropriations and Budget Subcommittee on Finance on Feb. 14, the bill was favorably amended to remove all language relating to a premature sunset date for incentives and replaced by innocuous provisions providing for the creation of a dashboard of information on cost and usage of individual incentives.

It was a favorable year for the Chamber's incentive programs as most lawmakers now understand their value as well as the Pew Evaluation Process, strongly supported by the Chamber, which continues to provide a data-driven, empirical analysis that supplies legislators with facts on incentives. Additionally, SB 923, authored by Sen. Roger Thompson (R-Okemah), was enacted to favorably amend the Small Employer Quality Jobs Act by increasing the number of employees a business may have to qualify for the incentive from 90 to 500.

For more information, please contact Mark VanLandingham.

 

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  Chamber-Led "Oklahomans for Business and Property Owners' Rights" Requests Veto of SB 1212  
 

For the second consecutive year, the Chamber led a group of 50 businesses, associations, law enforcement groups and universities to oppose irresponsible gun measures. The coalition, "Oklahomans for Business Owners' and Property Rights", opposed all gun legislation which would: 1) negate the rights of business and property owners to prohibit weapons; 2) jeopardize the right of event hosts to prohibit weapons at high-economic impact events; 3) eliminate or reduce the ability of colleges and universities to regulate weapons on campus; or, 4) lessen the ability of law enforcement officials to protect the public's safety.

This session began with 83 bills to expand gun rights in Oklahoma. Only one bill opposed by the Coalition was passed by the Legislature, SB 1212, which would allow for open or concealed carry without a permit, also known as Constitutional Carry. On May 3, the Coalition requested the Governor to veto this very damaging legislation.

For more information, please contact Mark VanLandingham.

 

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  Quality Events Act Extended and Improved  
 

The Chamber successfully achieved passage of legislation - SB 1252 by Senator Gary Stanislawski (R-Tulsa) and Representative John Pfeiffer (R-Mulhall) -- to improve and extend until 2021 the Oklahoma Quality Events Act, which first became law in 2010.

The QEA, which was set to expire this year, is designed to help Oklahoma communities attract and retain high-quality, high-economic impact events by allowing them to capture a portion of the sales tax revenue generated by a high-economic impact event. Primary improvements include eliminating the requirement that communities perform a costly economic impact study prior to the event and the designation of a point person at the Oklahoma Tax Commission to work directly with applicants under the QEA.

SB 1252 passed the Senate 29-5 on March 8, the House of Representatives 74-9 on April 26 and was signed by Governor Fallin on May 3.

For more information, please contact Mark VanLandingham.  

 

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  Chamber Opposes State Question 788 - Medicinal Marijuana  
 

The Chamber has taken an official position to oppose State Question 788 - Medicinal Marijuana, which will be on the Oklahoma Primary Ballot on June 26. The Chamber's opposition is not based on the uses of medicinal marijuana for appropriate pain management purposes. However, the question is written so broadly it provides no restrictions on the conditions for which medicinal marijuana could be prescribed or the type of physician who could prescribe it. And, even more importantly, should the question pass, businesses will lose their ability to maintain and enforce a drug-free workplace by making medicinal marijuana users a "protected class," which creates concerns in the areas of human resources, general liability, workers' comp and other issues.

For more information, please contact Mark VanLandingham.   

 

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  Legislation Leading to Increases in State Uninsured Population Defeated  
 

The Chamber joined with its health care partners to defeat SB 1030 by Senator Josh Brecheen (R-Coalgate) and Representative Sean Roberts (R-Hominy), which would have cut 43,000 low-income Oklahomans in the "parent/caretaker" group from Medicaid and increased the state's already large uninsured population. SB 1030 was defeated on April 3 in the House Appropriations and Budget Subcommittee on Health by a vote of 2-5.  

Oklahoma's uninsured population is a key driver of health care costs as those individuals access emergency rooms without the means to pay and generate hundreds of millions of dollars in uncompensated care that is either absorbed by hospitals or transferred to other consumers and businesses in the form of more costly premiums. The Chamber supports Oklahoma pursuing the use of all available funds to address this issue and will continue to oppose efforts such as SB 1030 which would exacerbate Oklahoma's low health care rankings.

For more information, please contact Derek Sparks.

 

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  ODOT 8-Year Plan, Transportation Funding Protected  
 

The Chamber is a long-standing supporter of maintaining adequate funding for the state's transportation system, an important driver of economic development. After experiencing significant funding cuts last year, the Oklahoma Department of Transportation (ODOT) delayed and removed projects from its 8-Year Construction Work Plan. Another round of such cuts would have proved devastating to the great strides ODOT has made in rebuilding the state's infrastructure over the past decade. Currently, there are a historic number of transportation projects under construction in central Oklahoma such as I-235/I-44; I-40/I-44 (Crossroads); and SH 77 that require steady, predictable funding. 

The FY19 ODOT appropriation is $165,853,359.00 which includes revenue for bond debt service and the state employee pay raise/benefits contained in HB 1010xx, the revenue bill which also funded teacher pay raises.

For more information, please contact Derek Sparks.

 

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  Heartland Flyer Funding Protected  
 

The Chamber has always supported protecting Oklahoma's primary passenger rail asset - the Heartland Flyer - which experienced a twenty year discontinuation of service (1979-99). The Heartland Flyer, which connects Oklahoma City with Fort Worth, TX, is the centerpiece of Oklahoma City's efforts to provide more multi-modal opportunities for its citizens. The existence of Amtrak passenger rail service was the central reason why the Santa Fe Station was chosen as the $30 million City of OKC Intermodal Hub. This facility will serve as the cornerstone for a potential Regional Commuter Rail System. The Chamber is also highly supportive of opportunities to extend the Heartland Flyer north to Newton, KS, to connect Oklahoma City with Kansas City, St. Louis, Chicago and other destinations on the national system.

Legislation (SB 1239) was introduced by Senator Nathan Dahm (R-Broken Arrow) which would have entirely eliminated funding for The Heartland Flyer. The Chamber would like to express our appreciation to Senator Stephanie Bice (R-Oklahoma City), who did not hear this bill in the Senate Appropriations, General Government and Transportation Subcommittee by the first legislative deadline. Additionally, the final budget agreement included full funding for The Heartland Flyer.

For more information, please contact Derek Sparks.

 

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  State Safety Oversight Program Established, Potential Loss of Federal Funding Averted  
 

The Chamber strongly supported passage of HB 3576 by Senator Adam Pugh (R-Edmond) and Representative Ryan Martinez (R-Edmond), which will allow Oklahoma to meet Federal Transit Administration (FTA) requirements through the creation of an "Oklahoma State Safety Oversight Program". HB 3576 further designates oversight of all private and public rail fixed guideway public transportation systems - including the Oklahoma City Streetcar - will be provided by the Oklahoma Department of Transportation.

Under Federal law, states failing to obtain state safety certification by April 15, 2018, would have been ineligible to receive FTA Federal public transportation funds. This would have resulted in the loss of millions in federal transit and rail funds for Oklahoma. The Chamber remains supportive of multi-modal transportation and ran the campaign for MAPS 3 (passed in December 2009) which included construction of a $131 million Oklahoma City Streetcar system connecting the core business district of Oklahoma City with Midtown and Bricktown. The streetcar is expected to begin service later this year.

HB 3576 overwhelmingly passed the Senate and House and was signed by Governor Fallin on April 12, in time to avert a loss of Federal transportation funding.

For more information, please contact Derek Sparks.

 

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  Legislation Passed to Create Career Ladder for Oklahoma Teachers  
 

SB 980, sent to the Governor, will create a new teaching career ladder to enable teachers to increase pay while staying in the classroom. The legislation creates a new process for teachers to earn Lead and Master Teaching certifications, which provide additional responsibilities and pay for highly qualified teachers.

For more information, please contact Drew Dugan.

 

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