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28	28	STATE OF OKLAHOMA
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30	30	1st Session of the 59th Legislature (2023)
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32	32	HOUSE BILL 2700 By: Kendrix
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38	38	AS INTRODUCED
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40	40	An Act relating to public finance; amending 62 O.S.
41	41	2021, Sections 7003, 7004 and 7005, which relate to
42	42	the Incentive Evaluation Act; modifying references to
43	43	terms of service; providing for schedu le of review;
44	44	imposing requirement with respect to scope of
45	45	services; providing exception; modifying provisions
46	46	related to release of information to the Incentive
47	47	Evaluation Commission; and declaring an emergency.
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58	58	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHO MA:
59	59	SECTION 1. AMENDATORY 62 O.S. 2021, Section 7003, is
60	60	amended to read as follows:
61	61	Section 7003. A. There is hereby established the Incentive
62	62	Evaluation Commission consisting of:
63	63	1. A certified public accountant appointed by the Oklahoma
64	64	Accountancy Board whose term shall expire on June 30, 2019 begin on
65	65	December 31, 2025, and serve a term of no more than four (4) years ;
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92	92	2. The president of the Oklahoma Professional Economic
93	93	Development Council Select Oklahoma or his or her designee who is
94	94	also a member of the Oklahoma Professional Economic Development
95	95	Council Select Oklahoma who shall serve during his or her term of
96	96	office as president of the Oklahoma Professional Economic
97	97	Development Council Select Oklahoma;
98	98	3. An auditor who is employed as an internal auditor by a
99	99	company or who is employed by a private auditing firm appointed by
100	100	the Governor whose term shall expire on June 30, 2019 begin on
101	101	December 31, 2025, and serve a term of no more than four (4) years ;
102	102	4. An economist from an Oklahoma college or university
103	103	appointed by the President Pro Tempore of the Oklahoma State Senate
104	104	whose term shall expire on June 30, 2020 begin on December 31, 2022,
105	105	and serve a term of no more than four (4) years ;
106	106	5. A lay person who is not a n elected official appointed by the
107	107	Speaker of the Oklahoma House of R epresentatives whose term shall
108	108	expire June 30, 2020 begin on December 21, 2022, and serve a term of
109	109	no more than four (4) years;
110	110	6. The Chairman Chair of the Oklahoma Tax Commission or his or
111	111	her designee who is also a member of the Oklahoma Tax Commission,
112	112	which shall be an ex officio and nonvoting position;
113	113	7. The Director of the O ffice of Management and Enterprise
114	114	Services or his or her designee who is an employee of the Office of
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141	141	Management and Enterprise Services which shall be an ex officio and
142	142	nonvoting position; and
143	143	8. The Oklahoma Secretary of Commerce or his or her designee
144	144	who is an employee of the Oklahoma Department of Commerce which
145	145	shall be an ex officio and nonvoting po sition.
146	146	B. Thereafter persons shall be appointed for terms of four (4)
147	147	years beginning on July 1 January 1. Any vacancy shall be filled by
148	148	the appointing author ity for the remainder of the unexpired term.
149	149	C. No person shall serve on the Commission or be appointed to
150	150	the Commission who is employed by a company that receives any
151	151	incentive or who holds a substantial interest in ownership in a
152	152	company that receives any incentive. As used in this subsection,
153	153	"substantial interest " shall mean the ownership, d irectly or
154	154	indirectly, of more than fifty percent (50%) of the equity interest
155	155	with voting rights for any lawfully recognized business entity.
156	156	D. No person shall be appointed to the Commission who at the
157	157	time of his or her appointment is an elected offici al. Any person
158	158	who is appointed to the Commission who subsequently becomes an
159	159	elected official during his or her term on the Commission shall be
160	160	required to vacate his or her position on the Commission.
161	161	E. The Office of Management and Enterprise Services shall
162	162	provide staff and administrative support to the Incentive Evaluation
163	163	Commission. The Oklahoma Department of Commerce and the Oklahoma
164	164	Tax Commission shall assist the Office of Management and Enterprise
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191	191	Services as needed in providing staff and admi nistrative support to
192	192	the Commission.
193	193	F. The Incentive Approval Committee is hereby created as a
194	194	subcommittee of the Incentive Evaluation Commission and shall
195	195	consist of the Director of the Office of Management and Enterprise
196	196	Services or his or her design ee, the Secretary of Commerce or his or
197	197	her designee, and the Chairman of the Tax Commission or his or her
198	198	designee. It shall be the duty of the Committee to det ermine:
199	199	1. Upon initial application on a form approved by the
200	200	Committee, if an establishment is engaged in a basic industry as
201	201	defined in subdivision (b) of division (7) or in subdivisions (a)
202	202	through (n) of division (9) of subparagraph a of paragraph 1 o f
203	203	subsection A of Section 3603 of Title 68 of the Oklahoma Statutes or
204	204	as otherwise provided b y subsection C of Section 3603 of Title 68 of
205	205	the Oklahoma Statutes;
206	206	2. If an establishment would have been defined as a "basic
207	207	industry" prior to the amendments to Section 3603 of Title 68 of the
208	208	Oklahoma Statutes to convert from SIC Codes to NAICS Codes . If the
209	209	Committee so determines, the establishment shall be considered as a
210	210	"basic industry" for purposes of the Oklahoma Quality Jobs Program
211	211	Act; and
212	212	3. If employees of an establishment as defined in division (10)
213	213	of subparagraph a of paragraph 1 of s ubsection A of Section 3603 of
214	214	Title 68 of the Oklahoma Statutes meet the requirements to be
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241	241	considered employed in new direct jobs as specified in paragraph 3
242	242	of subsection A of Section 3603 of Title 68 of the Oklahoma
243	243	Statutes.
244	244	G. For an establishment d efined as a "basic industry" pursuant
245	245	to division (4) of subparagraph a of paragraph 1 of subsection A of
246	246	Section 3603 of Title 68 of the Oklahoma Statutes, the I ncentive
247	247	Approval Committee shall consist of the members provided by
248	248	subsection A of this sect ion and the Executive Director of the
249	249	Oklahoma Center for the Advancement of Science and Technology, or a
250	250	designee from the Center appointed by the Executive Dire ctor.
251	251	SECTION 2. AMENDATORY 62 O.S. 2021, Section 7004, is
252	252	amended to read as follows:
253	253	Section 7004. A. The Incentive Evaluation Commission shall
254	254	ensure that each incentive is evaluated at least once every four (4)
255	255	years unless the Commi ssion determines that the incentive is exempt
256	256	from evaluation. The Comm ission may exempt from evaluation any
257	257	incentive that it concludes has a minimal fiscal impact. The
258	258	Commission shall determine a specific threshold amount which shall
259	259	be considered as a minimal fiscal impact for the current evaluation
260	260	cycle.
261	261	B. By January 1, 2016, and by January 1 each year thereafter,
262	262	For calendar years 2016 through 2022, the Incentive Evaluation
263	263	Commission shall develop a four -year schedule for evaluating
264	264	incentives. Beginning December 1, 2022, and each Dec ember 1 of all
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291	291	subsequent years, the Commission shall develop a schedu le of
292	292	incentives to be evaluated during the fo llowing calendar year. The
293	293	schedule for evaluating the incentives shall be developed so that
294	294	the incentives having the highest fisc al impact to the state revenue
295	295	system, including but not limited to the General Revenue Fund, shall
296	296	be evaluated before othe r incentives. Each schedule shall include a
297	297	list of all incentives in the state, including any it exempts from
298	298	evaluation. In dete rmining whether a program is an incentive , the
299	299	Incentive Evaluation Commission may consider legislative intent and
300	300	may also consider whether the program is promoted as an incentive by
301	301	any state agency. For each incentive listed in the schedule, the
302	302	Commission shall attempt to identify the goal o r goals of the
303	303	incentive.
304	304	C. Upon approval of the schedule, the Commission shall p rovide
305	305	the schedule to the Governor, President Pro Tempore of the Senate
306	306	and Speaker of the House of Representatives.
307	307	SECTION 3. AMENDATORY 62 O.S. 2021, Section 7005, is
308	308	amended to read as follows:
309	309	Section 7005. A. The Commission may contract with a private
310	310	company, nonprofit, or academic institution to assist with
311	311	evaluation of each incentive. The Commission shall devel op a scope
312	312	of services for a request for proposals issued pursuant to The
313	313	Oklahoma Central Purchasing Act, Section 85.1 et seq. of Title 74 of
314	314	the Oklahoma Statutes, for professional services necessary to
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341	341	complete incentive evaluations pursuant to the Ince ntive Evaluation
342	342	Act. The scope of services shall include a provisio n requiring the
343	343	contractor to provide at least one draft report on each incentive
344	344	prior to the issuance of the final report ; provided, the contractor
345	345	may determine the timing and frequency of draft repor ts based on
346	346	the availability of information and the potential for draft reports
347	347	to assist the Commission in making final recommendations. The cost
348	348	of such contract shall be paid by the Off ice of Management and
349	349	Enterprise Services. No recipient or potential recip ient of an
350	350	incentive or representative of a recipient or potential recipient
351	351	shall contact the entity or ind ividual with whom the Commission
352	352	contracts pursuant to this subsection un less the entity or
353	353	individual specifically requests information or document ation for
354	354	purposes of the incentive evaluation process; provided, this shall
355	355	not be construed to prevent par ticipation in a public hearing
356	356	conducted pursuant to subsection B of this section.
357	357	B. By November 1 of each year beginning in 2016, the Commission
358	358	or the Commission's chosen contractor shall evaluate each incentive
359	359	scheduled for review that year. The Com mission or the Commission 's
360	360	chosen contractor shall conduct each incentiv e evaluation in
361	361	consultation with the Oklahoma Department of Commerce divis ion of
362	362	Research and Economic Analysis Services using criteria developed
363	363	pursuant to subsection D of this section. Between October 1 and
364	364	November 30 of each year beginning in 2017, the Commission shall
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391	391	hold at least one public meeting to review, allow for public
392	392	comment, and vote to approve , disapprove or modify each incentive
393	393	evaluation conducted that year. By December 15 of each year
394	394	beginning in 2016, the Commission shall provide the results of each
395	395	incentive evaluation in a written report to the Govern or, President
396	396	Pro Tempore of the Senate and Speaker of the House of
397	397	Representatives. If the Commission vote s to modify an incentive
398	398	evaluation as provided in this subsection, such modification and the
399	399	original evaluation shall be documented in the annual written
400	400	report. The report shall be made publicly available on the Oklahoma
401	401	Department of Commerce website, the Commission website and
402	402	documents.ok.gov.
403	403	C. Each evaluation shall i nclude the following:
404	404	1. An estimate of the economic and fiscal impact of the
405	405	incentive. This estimate shall take into account the following
406	406	considerations in addition to other rele vant factors:
407	407	a. the extent to which the incentive changes business
408	408	behavior,
409	409	b. the results of the incentive for the economy of
410	410	Oklahoma as a whole. This consideration includes both
411	411	positive direct and indirect impacts and any negative
412	412	effects on other Oklahoma businesses, and
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439	439	c. a comparison to the results of other incentive s or
440	440	other economic development strategies with similar
441	441	goals;
442	442	2. An assessment of whether adequate protections are in place
443	443	to ensure the fiscal impact of the incentive does not inc rease
444	444	substantially beyond the state 's expectations in future years;
445	445	3. An assessment of whether the incentive is being administered
446	446	effectively;
447	447	4. An assessment of whether the incentive is achieving its
448	448	goals;
449	449	5. Recommendations for how Oklahoma can m ost effectively
450	450	achieve the incentive 's goals, including recommendations on whether
451	451	the incentive should be retained, reconfigured or repealed; and
452	452	6. Recommendations for any changes to state policy, rules, or
453	453	statutes that would allow the incentive to be more easily or
454	454	conclusively evaluated in the future. These recommendati ons may
455	455	include changes to collection, reporting and sharing of data, and
456	456	revisions or clarifications to the goal of the incentive.
457	457	D. Evaluation criteria shall be developed for each incentive
458	458	evaluated by the Commission. Each incentive shall be evaluate d
459	459	using criteria specific to the individual incentive. The criteria
460	460	shall be developed by the Commission through the administrative
461	461	rulemaking process pursuant to the Administrative Procedures Act,
462	462	Section 250 et seq. of Title 75 of the Oklahoma Statutes, and
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489	489	codified in the administrative code of the Oklahoma Department of
490	490	Commerce.
491	491	E. At the request of the Incentive Evaluation Commission, and
492	492	unless prohibited by the Oklahoma Constitution, state statutes or
493	493	federal law, state agencies shall provide any records, information,
494	494	data, or data analysis necessary for the Commission o r contractors
495	495	to effectively evaluate incentives. The Commission and contractors
496	496	shall not disclose or release any data received from other state
497	497	agencies, except as permitted unde r law.
498	498	SECTION 4. It being immediately necessary for the p reservation
499	499	of the public peace, health or safety, an emergency is hereby
500	500	declared to exist, b y reason whereof this act shall take effect and
501	501	be in full force from and after its pas sage and approval.
502	502
503	503	59-1-5680 MAH 01/18/23

Oklahoma 2024 Regular Session

Oklahoma House Bill HB2700 Compare Versions