May 21, 2012
May 21, 2012
The Legislature enters the last week of the Second Session of the 53rd Oklahoma Legislature on Monday.
Sine die adjournment will occur no later than this Friday, May 25, at 5 p.m.
Republican legislative leaders and the governor said Friday evening they are close to finalizing a $6.6 billion budget, but an agreement won’t be finalized until Monday. In addition to determining how to fund state agencies and services, lawmakers are talking about whether to issue bonds to repair and restore the state Capitol, build a state veterans office, finish the American Indian Cultural Center and Museum in Oklahoma City and build the OKPOP museum in Tulsa. Building a new headquarters for the state medical examiner’s office also is being discussed.
Budget committees in the House of Representatives and Senate are ready to take up several bills that will be part of the 2013 budget, which takes effect July 1. After committees approve the bills, the measures will go to the House and Senate. Getting the budget bills started in committee Monday gives lawmakers enough time to get the legislation passed by Friday’s deadline, but they don’t have a lot of extra time in case any problems are encountered.
A robust state economy should prevent major cuts to agencies. Most state agencies have been cut the past three years as the state dealt with declining revenues caused by the national recession and natural gas prices that are lower than estimates used for this fiscal year’s budget. High oil prices have fueled drilling activity in the state and are a major factor in the state’s reviving economy. Lawmakers have about $168 million, or 2.6 percent, more to spend this year compared with a year ago. This fiscal year’s budget is $6.4 billion.
Fallin and GOP legislative leaders have said they intended to keep core services at least at present funding levels. Core services are described as education, public safety, transportation and health and human services. They make up nearly 90 percent of the budget.
General Revenue Report
General Revenue Fund (GRF) collections in April showed robust growth again, confirming the Oklahoma economy is marching toward a banner year with two months remaining in FY-2012. Earlier this year, the governor and lawmakers agreed to a supplemental appropriation redirecting $92.6 million in surplus oil funds to meet special needs such as restoring $5,000 bonuses for Nationally Certified teachers and reimbursing local governments for disaster assistance. The bill also funded common education insurance benefits and a State Trooper Academy.
Total collections to the General Revenue Fund through April were $4.6 billion. This amount was $434.6 million and 10.6 percent above collections for the first ten months of FY-2011 and $353.6 million, or 8.4 percent above the total estimate for the same period of FY-2012.
If the $33.7 million in redirected oil taxes had been counted, year-to-date collections would be 11.4 percent above the prior year and 9.2 percent higher than the estimate. Totals for the month would be $67.9 million or 11.8 percent above last year and $46.6 million or 7.8 percent above the estimate.
In April, total collections for the General Revenue Fund, minus the diverted oil revenue, were $611 million, an increase of $34.2 million and 5.9 percent from a year ago. The amount collected for the month was $12.9 million and 2.2 percent more than projected.
Personal Income Tax Reduction
An agreement to cut the state’s top personal income tax rate of 5.25 percent down to 4.8 percent next year was announced Thursday evening by GOP legislative leaders and Gov. Mary Fallin. The plan also includes a one-time additional tax cut tied to a revenue growth trigger in the 2015 fiscal year. If state revenue grows by at least 5 percent in that year, the income tax rate would be reduced further to 4.5 percent effective Jan. 1, 2015, but if revenue doesn’t grow by that amount, the tax rate would not change. The 5 percent trigger is based on the growth of personal income, sales, use, motor vehicle and corporate tax collections, but doe not include energy tax revenue.
House Speaker Kris Steele, R-Shawnee, and Senate President Pro Tem Brian Bingman, R-Sapulpa, said they expect legislators to approve the plan. Republicans have a 67-31 advantage in the House of Representatives and a 32-16 majority in the Senate.
More about the plan
The proposal also simplifies the tax code by dropping the total number of tax brackets from seven to three. New rates will be set at 1 percent, 3.3 percent and 4.8 percent. The agreement represents a tax cut of more than $218 million to taxpayers when fully implemented in the 2014 fiscal year. It would cut taxes by an additional $121.4 million in the 2015 fiscal year should the growth trigger be reached, Fallin said.
Lost revenue is partially offset by eliminating 33 tax credits, certain deductions and eliminating the personal exemption for single filers making more than $35,000 and joint filers making more than $70,000. No major economic tax credits are being eliminated; retirement and veteran tax exemptions for individual taxpayers are safe.
The plan leaves alone credits available to low-income taxpayers, such as earned income credits, child and child care credits and sales tax relief credits.
The plan will cost the state $32.7 million in the 2013 fiscal year, which will be paid for with growth revenue from this fiscal year. Revenue collections through April are $350 million higher than originally expected. The plan is expected to cost the state $102 million in the 2014 fiscal year.
According to the plan, core services, such as transportation, public safety, health and human services and education, will not see a change in their budgets.
However, opponents question whether tax cut supporters were taking a “responsible” approach in their proposals that are based on revenue on growth triggers. Under triggers, automatic tax cuts would go into effect whenever revenues increase by a certain percentage. Supporters say that triggers promote fiscal responsibility because they prevent us from cutting taxes during a recession. Opponents say triggers do not protect Oklahomans from cutting taxes when they cannot afford it.
According to an example by the OK Policy Institute, revenues could rise by 1 percent in 2013 and then stay flat for the next four years. Historically, many expenses will go up over that time due to inflation, rising health care costs, and increased caseloads and enrollment. To cover those expenses, the state would be forced to make significant cuts to core services. Yet by the trigger’s definition, that would be enough “growth revenue” to force another tax cut.
Other Tax Matters
Property Taxes – HJR1001 by Rep. David Dank and Senator Mike Mazzei directs the Secretary of State to refer a proposed constitutional amendment to a vote of the people. The constitutional amendment would allow people aged 65 and older, regardless of their income level, to qualify for a property tax benefit so long as they own and occupy the property. For the purposes of property taxes, beginning January 1, 2013 the fair cash value of the property would not increase above the value placed on the property in the year the owner turned 65 years old; any improvements made would be added to the assessed value. The conference committee report, which has been submitted, puts the tax benefit under $150,000 for the freeze.
2012 Bond Talk
Budget talks include whether the state should issue a bond issue to repair and restore the state Capitol, which could cost as much as $160 million. Fallin said she supports a bond issue for the Capitol but hasn’t decided on an amount. She also supports a $40 million bond issue for the American Indian Cultural Center and Museum in Oklahoma City. Lawmakers have shown lackluster support for any bond issues this year, although a financial package to repair the Capitol, which has plumbing, electrical and exterior problems, has received some support.
American Indian Cultural Center and Museum
Sens. Patrick Anderson and Cliff Aldridge said this week there are enough votes in hand to defeat a measure that authorizes a $40 million bond issue to help pay for the completion of the American Indian Cultural Center and Museum in Oklahoma City. They said they don’t oppose the project, but Oklahoma taxpayers shouldn’t have to pay for it.
The 16 Democrats in the Senate have earlier said they oppose any bond issue if there is a cut in the personal income tax rate. Republican legislative leaders and the governor announced Thursday evening they have reached an agreement to cut the state’s top personal income tax rate of 5.25 percent down to 4.8 percent next year.
The state has provided $67.4 million already for construction of the cultural center. In addition, the state appropriates $1.5 million to run the Native American Cultural and Educational Authority and $5.5 million in debt service payments for bond issues for the center.
Gov. Fallin backs a bond issue for the center, but many Republican lawmakers have expressed concern about supporting bond issues this year because it would increase the state’s bonding debt. It would cost the state about $2.7 million a year to pay the debt service for a $40 million bond issue spread over 20 years and about $2.2 million for a 30-year bond issue.
OK POP Museum
Mayor Dewey Bartlett committed on Friday to use a city-parking fund of nearly $3 million to help build the proposed Oklahoma Popular Culture Museum in downtown Tulsa. The project – popularly referred to as OK POP – would be a 90,000-square-foot museum in the Brady Arts District dedicated to Oklahoma popular creative arts, including music, film and television. Key to the project moving ahead is a $42.5 million state bond issue, which is pending before the Oklahoma Legislature. Bartlett said he would insist on the Legislature’s approving the Tulsa project if lawmakers OK a proposed $40 million bond issue to benefit the Native American Cultural Center in Oklahoma City. In addition to the $40 million for the cultural center, Oklahoma City could be the beneficiary of a bond issue of as much as $200 million to repair the state Capitol. Tulsa Metro Chamber President and CEO Mike Neal said the POP museum would create 392 jobs over the four years of construction, would have a $49 million economic impact on the community after it opens and pay for itself. The city money raises the local commitment to the project to more than $6 million. The George Kaiser Family Foundation has made a $1 million challenge grant to the project, and the Bank of Oklahoma has donated land valued at $2.5 million.
Reducing Physician Shortages – HB 3058 and SB 1280
House Bill 3058 by Speaker Kris Steele and Senator Pro Tempore Brian Bingman and a similar bill, Senate Bill 1280 by Senator Mike Schulz and Speaker Kris Steele intend to increase access to medical care and include funding for residency slots in hospitals located in rural and underserved areas. Both measures are waiting to be heard in House and Senate GCCA.
Budget discussions include $3.7 million that is needed to pay for legislation that requires at least nine months of post-release supervision of all felons, which should reduce the recidivism rate at the state prisons; establishes mental health and substance abuse assessments and evaluations before convicted felons are sentenced; and develops intermediary revocation facilities for nonviolent offenders who violate drug court regulations or conditions of probation and parole, which should ease prison overcrowding.
Eight-year construction plan and State Bridges - House Bill 2248, by Rep. T.W. Shannon and Sen Bryce Marlatt (Combined with SB 1643), would increase road funding in the coming fiscal year. Current law calls for an annual increase of $41.7 million in road funding. Shannon’s bill would increase that amount to $56.7 million, directing an additional $15 million to the Rebuilding Oklahoma Access and Driver Safety Fund. The bill directs that the fund continue receiving an additional $56.7 million each year until the total increase equals $550 million HB 2248 is scheduled to be heard by the House GCCA this week.
County Bridges – House Bill 2249, by Rep. Shannon and Senator Marlatt, (Combined with SB 1642) would direct the vehicle licensing fees and penalties to the County Improvements for Roads and Bridges (CIRB) Fund to increase to 20 percent by 2013. The CIRB program is currently funded with 15 percent of the motor vehicle taxes and fees. House Bill 2249 would increase the estimated annual funding for the CIRB program from approximately $80 million to more than $105 million. Currently, 706 of nearly 6,800 bridges on the state highway system are identified as structurally deficient. Of the 706 bridges, 413 are scheduled to be replaced in the next seven years, but 293 remain unfunded. Many of those bridges will be replaced if Shannon’s legislation becomes law. HB 2249 is scheduled to be heard by the House GCCA this week.
Weigh Station Improvement Revolving Fund: The House approved HB 2391 this week that would allow money to be used from an existing 1-cent tax on a gallon of gasoline to pay for three remaining port of entry truck weighing and inspection stations. House Bill 2391 would extend a plan approved by lawmakers about four years ago that diverted money from the gasoline tax to build the new weigh stations. The gasoline tax money goes to the Oklahoma Corporation Commission’s underground storage tank fund, used to pay for replacing leaking underground fuel tanks. About $16.5 million is in the fund. The gasoline tax generates about $6 million a year; the original legislation authorized $51 million to go to the weigh stations. HB 2391 increases the total amount of gasoline tax money going to the weigh stations to $81 million. The additional $30 million should be enough to pay for the last three weigh stations that don’t have a funding source. The House of Representatives voted 70-16 to pass HB 2391. It now goes to the full Senate for consideration.
Sunset for Petroleum Storage Tank Indemnity Fund: Senate Bill 1336 by Senator Cliff Branan and Rep. T.W. Shannon modifies date that administrators shall notify Tax Commission for below maintenance level requirements of the Petroleum Storage Tank Indemnity Fund to December 31, 2022. SB 1336 has passed from Senate and House GCCA and will now be considered on the House Floor.
Corporation Commission Duties: House Bill 1952 separates and clarifies the duties of the Corporation Commission with size and weight enforcements and establishes that employees can enforce size and weight requirements at scale facilities. HB 1952 has been signed into law by the Governor.
Petroleum Storage Tank Indemnity Fund: HB 2390 by Rep. Guy Liebmann and Senator Brian Bingman allows for reimbursement from the Petroleum Storage Tank Indemnity Fund for costs incurred as a result of a release from a storage tank system owned or operated by the state. The measure removes a minimum cost requirement of $5,000 for state agency reimbursement and removes language relating to the transfer of funds from the Petroleum Storage Tank Indemnity Fund by the Administrator of the Corporation Commission. HB 2390 is waiting to be heard by the House GCCA on Monday.
Oklahoma Energy Initiative – SB 1627 by Senator Bingman and Rep. Ron Peters creates the Oklahoma Energy Initiative designed to advance new research and development efforts relating to energy. SB 1627 has been signed into law.
GRDA Transmission Participation – SB 1506 by Senator Eddie Fields and Rep. Weldon Watson authorizes the Grand River Dam Authority (GRDA) to participate in the Southwest Power Pool Integrated Marketplace or other programs established by a regional transmission organization of which it is a member. It also authorizes the GRDA to engage in the buying and selling of electricity products, fuel commodities and financial instruments and specifically excludes any expansion of retail activities of the district. The measure directs the board of directors to adopt a hedging policy to enable the district to take advantage of standard market products to reduce risk while preventing speculative trading and potential abuses. SB 1506 has been signed into law.
SB 1246 by Senate Pro Tempore Brian Bingman and Rep. Fred Jordan requires pending workers’ compensation proceeding to be stayed until the final disposition of the criminal case in the event a claimant is charged with workers’ compensation fraud. SB 1246 has been signed into law.
Responding to concerns about the alleged maltreatment of children in state care, lawmakers Monday announced plans to streamline the Department of Human Services, replace its nine-member commission with four citizen advisory panels and allow the governor to appoint the agency’s director. Speaker Kris Steele, R-Shawnee, and four House members who worked on the proposals, announced the legislative proposals. Steele said the language will be inserted into the following measures by the end of this week.
· House Bill 2736: Authorizes the Department of Human Services (DHS) to provide information to a federally recognized Indian tribe that is relevant to any individual who has applied to become a foster care, adoptive or guardianship placement through the tribe. The measure requires DHS to contract with private child-placing agencies for the recruitment, training and retention of foster care services. DHS will retain responsibility for child abuse and neglect investigations, referrals to law enforcement, participation in the court system, case management and adoptions. The measure establishes a steering committee responsible for submitting to the Legislature an advisory plan for the outsourcing of recruitment, training and retention of foster care providers and to monitor the implementation of the plan and make recommendations on the implementation of outsourcing statewide.
· House Bill 3134: Would restructure the child welfare division to put officials in charge of policy also in charge of implementation.
· House Joint Resolution 1092: Would ask voters to abolish the Commission for Human Services.
· House Bill 3137: Would require the DHS commissioner to be appointed by the governor and confirmed by the Senate. It would also establish four volunteer advisory panels – composed of five members each – to monitor different divisions of the agency. The meetings and business would fall under the state’s Open Meeting and Records acts.
· House Bill 3135: Would open more records to the public related to previous DHS involvement when a child dies or nearly dies by abuse or neglect.
· House Bill 3136: Would establish hiring and continued employment criteria for child welfare workers and would create a revolving fund for future pay raises for those employees.
The legislation will be acted on as DHS awaits approval of its Pinnacle Plan, the child welfare services improvement plan the agency is developing with a panel of national experts. The plan was developed as a result of a federal lawsuit that accused DHS of harming children in its foster homes and state shelters. The Pinnacle Plan calls for a series of reforms that include hiring 200 child welfare workers and 40 supervisors, recruiting 1,000 traditional foster families, granting pay raises to foster parents and child welfare workers and eliminating the use of state shelters for young abused and neglected children. It’s estimated to cost the state about $100 million more a year and the federal government about $50 million more a year once all the reforms are in place. The plan is expected to cost about $30 million more in the 2013 fiscal year.
Legislators will also take up measures next week in response to the settlement of a federal lawsuit in Tulsa. The class-action agreement is intended to create changes and improvements to the state’s child-welfare system. The settlement between DHS and New York-based nonprofit Children’s Rights creates a three-person panel to oversee progress in a plan addressing 15 areas, including caseload, number of placements and recruitment of foster homes.
Pet Breeders: The House of Representatives approved House Bill 2921 by a 89 to 1 vote, which mostly transfers the pet board’s duties to another state agency. However, the House rejected the conference committee report. The House rejected Senate amendments to House Bill 2721 after the Governor’s Office objected to one section of the law. The section would have split unspent donations to the Oklahoma Commercial Pet Breeders Board among the donors after the agency is eliminated, but the Governor’s Office questioned the legality of that move. The bill will be taken back to committee, and the section in question will be eliminated. Then the House will take up the remainder of the bill, which would eliminate the pet breeders board and move its responsibilities to the state Department of Agriculture. Pet breeders who get their state licenses by Sept. 1 would be exempt from having to comply with any guidelines stricter than what are currently allowed under the latest version of the bill eliminating the Board of Commercial Pet Breeders and transferring its duties to another state agency. Those who apply by Sept. 1 won’t be required to meet any cage-size requirement more stringent than U.S. Agriculture Department standards, according to the measure. Any commercial pet breeder replacing or adding cages after Sept. 1 would have to comply with any updated requirements. HB 2921 now goes back to the Senate for consideration.
Gov. Mary Fallin has signed a bill into law that will allow Oklahomans with concealed handgun permits to carry their weapons in the open. Senate Bill 1733 would allow anyone possessing a license to carry a firearm under the Oklahoma Self Defense Act to carry the weapon either openly or concealed. It also would allow a property owner to openly carry a handgun on his or her land. No concealed carry permit would be required. The Senate voted 33-10 to pass it and the House of Representatives passed it 85-3. The measure takes effect Nov. 1. Oklahoma will become the 26th state to allow open carrying of handguns
With only 10 days remaining in the 2012 session, most legislation creating regional water planning groups has died and probably won’t be heard this session.
· House Bill 1337 died in the House Agriculture, Wildlife and Environment committee. The measure would have created 13 regional water-planning groups.
· A similar measure, sponsored by state Sen. Jerry Ellis, D-Valliant, would have required the members of the planning groups to be elected. Senate Bill 1327 includes an amendment by Ellis that requires a public election for members of the planning group. However, that bill – which cleared the Oklahoma House of Representatives by a 59-30 vote – is currently locked up in a conference committee.
· A third measure, House Bill 2202 by state Rep. Ed Cannaday, D-Porum, and Ellis would have tightened the restrictions on stream adjudication lawsuits and current stream adjudication statutes to set conditions that must be met before a lawsuit could be filed. Like its companion, HB 2202 died in committee.
Water-related legislation signed into law
· House Bill 2835 encourages the use of gray water – untreated wastewater that has not come in contact with toilet waste or water from a kitchen sink – in private homes. The measure creates a permit exemption for gray water systems using than 250 gallons of gray water per day for gardening, composting or landscape maintenance. The new law takes effect Nov. 1
Oklahoma Bridge to Literacy Program - House Bill 2676 by Rep. Jabar Shumate and Senator Judy Eason McIntyre directs the Oklahoma State Board of Education to establish the Oklahoma Bridge to Literacy Program to improve reading skills of children through the fourth grade. The State Department of Education must issue a request for proposals by October 1, 2012, and each October 1 after that, seeking applications for the program. Eligible applicants include nonprofit organizations; community-based programs, centers, organizations or services; and churches or religious organizations. Programs must establish reading programs for children through the fourth grade and may be offered before school, after school, on Saturdays or during summer months. The programs must focus on enabling children to read at the appropriate level and provide assessments and measure of reading skills to determine success. The state board must award grants by February 1 each year. The department also must provide reading instruction training, resource materials on reading instruction and remediation and other assistance. The board must provide for independent evaluations of programs and report to the governor, speaker of the House and pro tempore of the Senate each year. The conference committee report has been reported from GCCA.
Screening Instruments – House Bill 2511 by Rep. Ann Coody and Senator Ron Justice removes the cap of three on the number of screening instruments that the State Board of Education must approve for use at the beginning of the school year for monitoring progress and measurement of reading skills at the end of the year. HB 2511 has been signed into law.
Graduation Requirements: The House General Conference Committee on Appropriations signed out House Bill 3130, which would allow local school districts to exempt up to 3 percent of their graduating classes from a requirement that they pass four of seven end-of-instruction exams. To qualify for the exemption, seniors would have to pass at least three of those exams. The Senate GCCA will now consider HB 3130.
2012 Legislative and Election Calendar and Deadlines
May 25 – HOUSE & SENATE – Sine Die Adjournment, no later than 5:00 p.m.
June 26 – Primary Election
August 29, 2012 – Runoff Primary Election
November 6, 2012 – General ElectionAERO BILL TRACKING REPORT 5/21/12
05-21-2012 – 09:57:26
Dank Mazzei Requires tax credits to identify recipients, create jobs, and limits number of credits allowed to be claimed by one entity.
General Remarks: Tax credit vehicle
05-01-12 H House appointed a conference committee:GCCA
05-02-12 S Senate appointed a conference committee: GCCA
05-04-12 H Referred to House Committee on House: GCCA
05-17-12 S Meeting set for 1:00 p.m.Rm 432A State Capital House:GCCA
05-17-12 H Reported from House GCCA House GCCA
Adelson Sears Adds Oklahoma Capital Formation Act where needed; Requires a list for all dollar obtained by sale of tax credits from investee companies and from venture funds be
made available to the financial community; EMERGENCY.
05-07-12 H Meeting set for 1:00p.m., Room 432 A, State Capital, House: GCCA
05-17-12 H Not heard in committee House: GCCA
05-18-12 H Meeting set for 1:00p.m., Roome432A State Capital, House: GCCA
05-21-12 H Meeting set for 1:30 p.m., Room 432 A, State Capital, House: GCCA
Mazzei Dank Modifies and eliminates certain tax credits, deductions, and exemptions granted by the state of Oklahoma; limits amounts and types of tax incentives to be received and claimed by individuals and businesses; EMERGENCY.
05-03-12 S Senate appointed a conference committee: GCCA
05-07-12 H House appointed a conference committee: GCCA
05-15-12 S Referred to Senate Committee Senate: GCCA
05-15-12 H Meeting set for 4:00 p.m., Room 419C, State Capitol, Senate: GCCA
05-15-12 H Conference committee report submitted
Mazzei Dank Modifies definitions and provides dismissal from OK Quality Jobs Program Act if second payment claim is not filed within two years of the most recent claim; EMERGENCY.
05-15-12 H Referred to House Committee on House: GCCA
05-17-12 S Meeting set for 1:00 p.m., Room 432A, State Capitol, House: GCCA
05-17-12 S Not heard in committee House: GCCA
05-18-12 S Meeting set for 1:00 p.m., Room 432A, State Capitol, House: GCCA
05-18-12 H Reported from House: GCCA
Mazzei Dank Repeals sections of law related to franchise tax.
General Remarks: Eliminates Franchise Tax
05-17-12 S Referred to Senate Committee Senate: GCCA
05-17-12 H Meeting set for 4:00 p.m., Room 419C, State Capitol, Senate:
05-17-12 S Reported from Senate: GCCA
05-18-12 S Meeting set for 1:00 p.m. Rm 432A, State Capitol House GCCA
05-18-12 H Reported from House: GCCA
Bingman McNiel Adds definitions of certain areas to the Oklahoma Quality Jobs Program; EMERGENCY.
05-14-12 H Meeting set for After Adjournment, Room 419C, State Capital Senate: GCCA
05-14-12 S Reported from GCCA Senate: GCCA
05-15-12 H Referred to House Committee on House: GCCA
05-17-12 S Meeting set for 1:00 p.m., Room 432A, State Capitol, House: GCCA
05-17-12 H Reported from House: GCCA
Mazzei Dank Removes intangible property of railroads, air carriers, and public service corporations from applicable ad valorem taxation laws; provides definitions.
General Remarks: Intangible Tax issue
5-17-12 H Meeting set for 4:00 p.m., Room 419C, State Capitol, Senate: GCCA
05-17-12 S Reported from GCCA Senate: GCCA
05-18-12 H Referred to House Committee on House Conf. Comm. on Gov. Mod. and Rules
05-18-12 S Meeting set for After Adjournment, Room 412C, State Capitol, House Conf. Comm. on Gov. Mod. and Rules
05-18-12 S Conference committee report submitted