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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 735 By: Dahm
AS INTRODUCED
An Act relating to public finance; creating the
Corporate Welfare Prohibition Comp act Act; providing
short title; providing intent; defining terms;
prohibiting the provision of certain incentives upon
the effectiveness of certain compact; requiring the
Attorney General to enforce the provisions of this
act; providing for standing to sue; requiring the
Governor or a designee to be designated compact
administrator; requiring administrator to provided
certain information; requ iring administrator to
maintain certain list; requiring the a dministrator to
notify and petition c ertain delegation under certain
circumstance; requiring the state to become party to,
and bound by, certain compact under certain
circumstance; providing for withdrawal from certain
compact under certain circumstance; prohibiting
withdrawal under certain c ircumstance; providing for
noncodification; providing for codification ; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
This act shall be known and may b e cited as the “Corporate
Welfare Prohibition Compact Act ”.
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SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 610 of Title 62, unless there is
created a duplication in numb ering, reads as follows:
This Legislature finds that:
A. The party states understand that subsidizing some business es
at the expense of others is, over the long term, ineffective at best
and harmful to the national economy and honest governance at worst.
B. These policies are often enacted for the purpose of luring a
company to relocate a headquarters or a part of a c orporate
operation to a state. Yet these actions often preclude a healthier
competition between states in which tax and regulatory barriers are
lowered to benefit the general population and create a more
favorable economic clima te for all businesses.
C. These policies also lead to an inefficient distribution of
resources among the states, leading to increased costs and
inhibiting the ability of the nation to c ompete internationally as
well as domestically. They also contribute to corruption and the
loss of faith in the basic fairness of our political and economic
system.
D. Therefore, the party st ates agree that their state
government, or any political subdiv ision, shall not provide a
subsidy to a private enterprise for the purpose of selectively
supporting a specific industry or company, or to entice a specific
industry or company to relocate a facility from one party state to
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another party state or open a ne w facility in a particular party
state.
E. The party states also agree that once enough states with
representation sufficient to constitute a three-fifths majority in
both Houses of the U.S. C ongress become party states, the party
states and their politic al subdivisions will cease and desist in
providing any additional subsidies except to satisfy co ntractual
obligations agreed to prior to the effective date of this act.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 611 of Title 62, unless there is
created a duplication in numb ering, reads as follows:
As used in the Corporate Welfare Prohibition Compac t Act:
1. “Party state” means a state that has enacted a statute
agreeing to this compact ;
2. “Political division” means any branch, department, agency,
and any quasi-governmental entities of this state and of any
political subdivision of this state ;
3. “Subsidy” means an economic benefit, direct or indirect,
granted by a state government or any political division including
but not limited to direct grants, tax consideration, favorable
bonding status, special district status, or any other benef it that
has the effect of reducing governmental costs for a venture or class
of ventures compared to others similarly situated, with the primary
purpose or substantial effect of encouraging or maintaining within a
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state or political subdivision ’s borders particular or specific
classes of ventures in which private persons have a substantial
financial or ownership interest. The economic benefits to private
enterprise from the following shall not be considered a subsidy:
a. benefits from the government ’s performance of
essential government functions including benefits from
the following:
(1) the party state’s or political division’s
provision and maintenance of public
infrastructure for general public benefit and for
actual public use,
(2) the party state’s or political division’s
performance of functions without which it would
cease to exist as a government al body,
(3) the retention of private enterprise to perform
functions of the type without which the party
state or the political subdivision would cease to
exist as a government body, and
(4) the procurement of supplies and services from
private enterprise for the party state’s or
political subdivision ’s ordinary business
operations,
b. benefits from lower taxes and less regulation
including benefits from the following:
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(1) the general and uniform relaxation or repeal of
regulations,
(2) the general and uniform reduction or repeal of
taxes, assessments, or fees,
(3) the relaxation or repeal of special regulations
which, if not relaxed or repealed, would
otherwise subject specific individual s, entities,
or classes of individuals or entities to
regulatory burdens in excess of those imposed
generally and uniformly , and
(4) the reduction or repeal of special taxes,
assessments, or fees which, if not reduced or
repealed, would otherwise subject s pecific
individuals, entities, or classes of individuals
or entities to taxation, assessments, or fees in
excess of those imposed generally and uniformly ;
and
4. “Facility” means real property that includes but is not
limited to a headquarters, w arehouse, outlet, affiliate, or
production operation of a company or entit y.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 612 of Title 62, unless there is
created a duplication in numb ering, reads as follows:
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Notwithstanding any other provision of law to the contr ary, when
the number of states sufficient to satisfy the conditions outlined
in subsection E of Section 2 of this act agree to the compact, the
party state governments, and their political divisions, shall not
give a subsidy to a private enterprise for the purpose of
selectively supporting a specific industry or company or to entice a
specific industry or company to relocate an exi sting facility from
one party state to another party st ate or open a new facility.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 613 of Title 62, unless there is
created a duplication in numb ering, reads as follows:
A. The Attorney General shall enforce the provisions of the
Corporate Welfare Prohibition Compact Act.
B. A taxpaying resident of any party state has standing in the
courts of this state to require the Attorney General to enforce the
provisions of the Corporate Welfare Pr ohibition Compact Act.
SECTION 6. NEW LAW A new section o f law to be codified
in the Oklahoma Statutes as Section 614 of Title 62, unless there is
created a duplication in numb ering, reads as follows:
A. The Governor or a designee of the Governor shall be the
compact administrator.
B. The compact administrator shall maintain an accurate list of
all party states.
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C. The compact administrator shall furn ish the compact
administrator of each par ty state any information or documents th at
are reasonably necessar y to effectuate the provisions of the
Corporate Welfare Prohibition Compact.
D. When the number of states sufficient to satisfy the
conditions outlined in subsection E of Section 2 of this act agree
to the Compact, the compact administrator of each party state shall
inform the party state ’s congressional dele gation, the president of
the senate, and the speaker of the house and shall request that
legislation that comports with the provisions of this C ompact be
introduced and passed by Congress as soon as possible and shall send
copies of these communications to the compact administrator of each
party state.
SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 615 of Title 62, unless there is
created a duplication in numbering, reads as follows:
A. When the number of states sufficient to satisfy the
conditions outlined in subsection E of Section 2 of this act agree
to the Compact this state shall become a party to the compact and
bound by its terms when it enacts a statute agreeing to the compact
and written notice of such enactment is received by the governor of
each other party state .
B. Before the number of states sufficient to satisfy the
conditions outlined in s ubsection E of Section 2 of this act agree
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to the Compact this state may withdraw from the Compact by
resolution or repeal of this act. Withdrawal by a party state shall
not affect the validity or applicability of the compact to states
remaining party to the compact.
C. This state or any party state shall not withdraw from the
Compact after the number of states sufficient to satisfy the
conditions outlined in subsection E of Section 2 of this act agree
to the Compact.
SECTION 8. This act shall become effective Nov ember 1, 2023.
59-1-998 QD 1/18/2023 4:54:30 PM