House Passes Measures to Evaluate Tax Credits
FOR IMMEDIATE RELEASE: March 12, 2015
House Passes Measures to Evaluate Tax Credits
OKLAHOMA CITY – The Oklahoma House of Representatives passed, 90-4, Speaker Jeffrey W. Hickman’s measures which will create a fair and balanced system to evaluate tax credits and their impact on economic growth.
Currently, the annual price tag for tax credits, exemptions and incentives is roughly $1.7 billion. While tax credits are an essential part of creating a pro-business environment, there are no methods in place at this time to determine if a credit is spurring economic growth or simply keeping industries alive that would otherwise fail on their own. House Bill 2182 creates the Incentive Evaluation Commission which will review current and future tax credits, report on their level of success and make recommendations on future policy.
“Tax credits and incentives can be viewed as another form of investing the Oklahoma taxpayer’s money,” said Hickman, R-Fairview. “It’s time to begin looking at these investments and making judgments based on reliable evidence to determine which incentives have the greatest immediate and long term results.”
The Incentive Evaluation Commission, as called for in HB 2182, would be an eight member commission including an accountant appointed by the Oklahoma Accountancy Board, the president of the Oklahoma Economic Development Council, an auditor from a private auditing firm appointed by the Governor, an economist appointed by the President Pro Tempore of the Senate, and a lay person appointed by the Speaker of the House. The chairman of the Oklahoma Tax Commission, the director of the Office of Management and Enterprise Services and the Oklahoma Secretary of Commerce will act as nonvoting members.
No member will be an elected official or be employed by or have substantial interest in a company that receives an incentive. The commission will ensure each tax credit is evaluated every four years by an independent auditor and scored on criteria specific to its purpose, starting with those that have the greatest economic impact.
In addition to HB 2182, the House also voted 95-0 in favor of Speaker Hickman’s House Bill 2183 which ensures that tax credits introduced in the future will state a clear economic goal. This will allow the Legislature and the Incentive Evaluation Commission to have a more transparent means to evaluate the merits of a proposed credit.
“Oklahomans enjoy a healthy job market from a booming private sector, and they should also enjoy a healthy state government that works to invest their hard-earned tax dollars conservatively and wisely,” said Hickman. “By freeing up funds that are being spent on unsuccessful tax credits, the Legislature can better focus on funding core government services, investing in incentives that will attract businesses with a greater positive impact on our economy and reducing the income tax burden on Oklahoma families and businesses”
HB 2182 and 2183 will now go to the Senate for consideration.
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