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SENATE FLOOR VERSION
February 27, 2023
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 735 By: Dahm
[ interstate compacts - subsidies and incentives -
procedure - termination - amendments - board -
meeting requirements - duties and authorities -
contracts - grants and donations - severability -
noncodification - codification - effectiveness -
emergency ]
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 be cited as the “Interstate
Compact Prohibiting Compan y-Specific Subsidies Act”.
SECTION 2. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
The Legislature hereby finds and declares that for decades,
cities and states have been incentivized to pursue a “race to the
bottom”, rolling out increasingly lavish economic welfare policies
whenever multi-national corporations announce plans to move
locations, build new headquarters, or expand operations.
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Incentivizing creates a harmful, zero -sum competition that arises
between states or municipa lities to aggressively bundle commercial
property tax abatements, job creati on tax credits, investment tax
credits, research and development tax credits , and customized job
training tax credits. This practice has grown to become a forty-
five-billion-dollar economic tax break industrial complex designed
to extract wealth and resou rces from the public for the
disproportionate benefit of corporations. An agreement between
states to prohibit com pany-specific subsidies would create a l evel
playing field by refusing to engage in the race to the bottom that
large corporations and their executives have come to rely on.
Cooperation between states that refuse to allow multi -national
corporations to play municipalities or states off one another will
end the enrichment of large companies at the expense of taxpayers
and end decades of wastefu l spending, which has not led to
meaningful economic benefits and benefited none but a few of the
wealthiest companies.
SECTION 3. 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 numbering, reads as follows:
As used in this act:
1. “Company-specific subsidy” shall mean a:
a. company-specific tax incentive, including any change
in the general tax rate or valuation offere d or
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presented to a speci fic company by this state that is
not available to other similarly situated companies,
and
b. company-specific grant, including any disbursement of
funds through property, cash, or deferred tax
liability by this state to a particul ar company.
The term company-specific subsidy does not include workforce
development grants that provide funds for the purpose of training
employees; and
2. “Member state” means any state, territory, or the District
of Columbia of the United States that ha s enacted this compact
legislation and has not withdrawn from or terminated the compact
pursuant to Section 4 of this act.
SECTION 4. 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 numbering, reads as follows:
A. Each member state is prohibited from offering or providing a
company-specific subsidy to an entity whose headquarters,
manufacturing facility, office space, or other real estate
development is located or is considering a location or locating in
any other member state, or to incentivize an entity located in a
member state to relocate its headquarters, manufacturing facility,
office space, or other real estate development to its stat e.
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B. This compact shall not be retroactive and existing company -
specific subsidies shall not be prohibited by this compact.
C. A member state may withdraw from participating in this
compact by written notice to the compact administrator of each
member state. The notice of withdra wal shall not become effective
until ninety (90) days after the notice is given. The withdrawal of
any member state shall not affect the validity of this compact as to
the remaining participating member states.
D. If the board of compact administrators determines that any
member state has at any time willfully violated any of the terms
this compact or the established by laws, after notice and hearing as
set forth in the bylaws, the board of compact administrators may
terminate the member state from this compact.
E. This compact may be amended from time to time. Amendments
shall be presented in resolution form to the chair of the boar d of
compact administrators and shall be initiated by one or more member
states. Adoption of an amendment shall require end orsement by all
member states and shall become effective thirty (30) days after the
date of the last endorsement.
SECTION 5. 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 numbering, reads as follows:
A. For purposes of administering the provisions of this compac t
and to serve as a governing bo dy for the resolution of all matters
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relating to the operation of this compact, a board of compact
administrators is hereby established as follows:
1. The board shall be composed of one representative from each
of the member states to be known as the comp act administrator and
the compact administrator of this state shall be the Lieutenant
Governor;
2. The compact administrator shall serve and be subject to
removal in accordance with the laws of the state he or she
represents. A compact administrator may provide for the discharge
of his or her duties and the performance of his or her function as a
board member by an alternate. An alternate may not serve unless
written notification of his or her id entity has been given to the
board;
3. The board shall convene at least once annually and shall be
responsible for collecting testimony from interested parties
including member states, organizations and associations, state
legislators, taxpayers, and subject matter experts on how the
compact can be improved and s trengthened;
4. Each compact administrator shall be entitled to one vote.
No action of the board sh all be binding unless a majority of the
total number of the votes by the board are cast in favor thereof.
Action by the board shall be only at a meeting a t which a majority
of the member states are represented;
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5. The board shall elect annually from its membership a chair
and vice chair. The board shall adopt by laws not inconsistent with
the provisions of this compact or the laws o f a member state for the
conduct of its business and shall have the power to amend and
rescind the bylaws;
6. The board may accept, for any of its purposes and functions
under this compact, any donations and grants of monies, equipment,
supplies, materials, and services, conditional or otherwise, from
any state, the United States, or any governmental agen cy and may
receive, utilize, and dispose of the same;
7. The board may contract with, or accept services or personnel
from, any governmental or intergov ernmental agency, individ ual, firm
or corporation, or any private nonprofit organization or
institution; and
8. The board shall formulate all necessary procedures and
develop uniform forms and documents for administering the provisions
of this compact. All procedures and forms a dopted pursuant to board
action shall be contained in a compact manual.
B. The Office of the Attorney General is hereby designated as
the agency responsible for per forming administrative and enforcement
duties assigned to this com pact to abolish company-specific
subsidies.
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SECTION 6. 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:
This compact shall be liberally con strued to effectuate its
purposes. If any phrase, clause, sentence, or provision o f the
compact, or the applicability of any phrase, clause, sentence, or
provision of this compact to any government, agency, person , or
circumstance is declared in a final j udgment by a court of competent
jurisdiction to be contrary to the Constitution of the United States
or is otherwise held invalid, the validity of the remainder of this
compact and the applicability of the remainder of this compact to
any government, agenc y, person, or circumstances may not be
affected. If this compact is held to be co ntrary to the
constitution of any member state, the compact shall remain in full
force and effect as to the remaining member states and in full force
and effect as to the aff ected member state as to all severable
matters.
SECTION 7. NEW LAW A new section of 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:
This act shall take effect upon the adoption of the Interstate
Compact Prohibiting Company -specific Subsidies by two or more member
states and the Office of the Attorney General providing in a notice
to the Lieutenant Governor that this contingency has been fulfilled.
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SECTION 8. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and aft er its passage and approval.
COMMITTEE REPORT BY: COMMITTEE ON FINANCE
February 27, 2023 - DO PASS AS AMENDED B Y CS