The full Senate has given final approval to legislation to make the state more competitive when trying to attract major economic development projects. Sen. Mike Mazzei is principal Senate author of House Bill 1953.
“As we work to create jobs and grow Oklahoma’s economy, we need to make sure we take advantage of every tool available,” said Mazzei, R-Tulsa. “This program has generated 3,000 new jobs and $100 million in capital investment in Arkansas.”
Under HB 1953, the governor would make the final decision on proposed projects, subject to consultation with the President Pro Tempore of the Senate and the Speaker of the House. The Department of Commerce is charged with administering the fund. The legislation also contains a “claw back” provision if the economic development project fails to meet performance provisions.
“We’ve got an incredible work force, a low cost of living and many other factors working in our favor when we’re competing for jobs,” Mazzei said. “What we don’t have is a Quick Action Closing Fund. That changes when this bill arrives on Governor Mary Fallin’s desk for her signature.”
HB 1953 creates the Oklahoma Quick Action Closing Fund in the State Treasury for use by the Oklahoma Department of Commerce (ODOC). The measure outlines various sources of revenue and stipulates that monies in the Closing Fund are to be used for economic development, specifically in situations in which spending these funds would likely be a determining factor in locating or retaining a high-impact business project or facility in Oklahoma. The Director of ODOC may recommend expenditures from the Closing Fund after analysis specific economic benefit factors outlined in the measure. After approval by the Governor, in consultation with the President Pro Tempore of the State Senate and Speaker of the House of Representatives, ODOC may enter into agreement establishing conditions for payment from the Closing Fund. The bill also includes provisions for use of funds and stipulates conditions that must be met to retain the funds.
If, as of the date certain provided in the agreement, the award recipient has not used monies awarded for the intended purposes, the recipient shall repay that amount and any related interest to the state at the agreed rate and on the agreed terms and any such amounts shall be deemed to be held in trust for the benefit of the state and shall be considered as a priority claim for purposes of federal bankruptcy law.
“Though the Closing Fund will be an effective economic development tool, I believed it was important we guarantee transparency in the process,” said John Sparks, D-Norman. “The public is rightly suspicious of programs which enable large sums of their money to change hands without transparency. Although the amendment was somewhat weakened, I believe it will be effective in reducing any suspicion of impropriety.”
The amendment would not hinder employees from making political contributions, and is limited to corporate entities or partnerships. The prohibition would apply for a twelve-month period preceding and a five-year period following the receipt of an award from the Quick Action Closing Fund. The length of the prohibition ensures it covers each gubernatorial election cycle.
Sparks noted Governor Rick Perry of Texas last year came under fire when it was discovered more than $16 million had been awarded from the Texas Emerging Technology Fund to companies with officers or investors who in turn made significant contributions to Perry’s reelection fund. This discovery resulted in a prominent and distracting investigation, casting widespread public doubt on the fairness and legitimacy of the technology fund.
“The success of similar economic development tools makes it important that we keep pace,” Sparks said. “However, controversies in other states have clearly illustrated we can craft a better, more legitimate plan. I believe we’ve done so today.”