HJR1089 By Steele. Sends to a vote of the people a measure that would prohibit the sale of tax credits, allow a person to find the identity of one that claimed a tax credit, and limit tax credits based on the amount one taxpayer could claim.
The Speaker said his bill gave a measure for tax credits and a guide for the creation of future tax credits. He said a tax credit had to have transparency, no transferability, sunsets, pre-approval, audits, a fiscal impact, and could not be considered in the last five days of the legislature.
The Chair noted that Dorman had two amendments and gave him the floor for discussion.
Dorman said his first amendment made the criteria non-applicable for tax credits for the income tax liability reduction of a person based on income or economic distress.
Speaker Steele moved to table the amendment; R. McDaniel seconded it. Dorman called for a recorded vote. The tabling motion passed 9-3.
Dorman said his second amendment exempted the income tax reduction credit for law enforcement or fire protection.
Speaker Steele asked if Dorman had spoken with him about his amendments. Dorman said he did not. The Speaker asked if Dorman understood that the tax credits had to meet certain criteria. Dorman said he knew of some who would argue that firefighters did not bring economic development.
Speaker Steele said the bill brought objective criteria for tax credits and moved to table the amendment; Dank seconded it. Dorman called for a recorded vote. The tabling motion passed 9-3.
Armes asked the Speaker if he believed tax credits were inherently evil. The Speaker said they were not, but without the criteria it was unclear if the tax credits were filling their purpose. Armes then asked about the future of transferable tax credits. The Speaker said if an entity claimed a tax credit, they had to be the recipient of the credit. He said the purpose was to eliminate those that did not provide a service to the state. Armes cautioned that they should be careful not to throw the baby out with the bath water, and the tax credits could hurt more than the help in the future. Dank conceded that some things had turned bad.
Dorman asked if they would preserve any of the wind farm tax credits. The Speaker said he did not want to put the state at a disadvantage, but they needed to be responsible with the taxpayer’s money. He said they needed to look at what the credit did to make sure it was not transferable.
Williams said he had been on both sides of the transferability debate and that he thought they could solve the problem by making sure a tax credit just created jobs. He asked if it was a work in progress in regards to the definition of “jobs.” The Speaker said the bill would have to go through both chambers, and he would fight to maintain the criteria that were set in the bill.
Glenn said he was concerned about wind energy losing their benefits. The Speaker said the bill’s purpose was to make sure they took politics out of the process.
Dank told the Speaker that they had ten task force meetings that was aired to the public and covered by various media outlets. He said he was disappointed in the lack of membership participation, but there was bipartisan membership of the committee. The members agreed on the criteria to avoid giving money away. The Speaker agreed.
Williams said that he liked what the Speaker had done thus far, but he wanted to know if the Speaker would allow language that defined jobs and job creation. The Speaker said he would entertain such language.
Dank moved do pass; R. McDaniel seconded it.
The Chair allowed Reynolds to ask some questions.
Reynolds asked the Speaker why he included line 14 on page two. The Speaker said referred him to page three, paragraph G, line 9-12 for the answer. Reynolds asked the Speaker to explain paragraph E. The Speaker said it established a limit for tax credits. Reynolds asked if this would be on a first come/first served basis. The Speaker said an expiration date would be set for the tax credit, and the paragraph gave it a monetary cap prior to the enactment. Reynolds asked if a person could take up all the tax credits. The Speaker said they would have to prove a credit created jobs before it was claimed.
The Chair allowed for debate, giving each member two minutes.
Dank debated for the bill saying they had a comprehensive task force that heard hours of testimony, and the abuse was beyond coping. He said it was taxpayer money, and they were not being responsible with it. They needed to have rules and criteria for tax credits and adopting criteria would help them spend money responsibility.
Dorman debated against the bill, saying he agreed the tax codes needed to be redone. He applauded Reynolds for the research he had done on the subject and said they needed to make sure they preserved credits that did good for the state . He said they needed the credits that helped Oklahomans in the lower income tax bracket and cautioned the committee to proceed slowly. He said he wished the title had been struck.
The Speaker said they were trying to establish objective criteria or tax credits and what was in the bill was recommended by the task force. It was responsible and prudent. He closed by saying that Mazzei was the senate author.
The bill passed 10-1.
via Committee News.
