Capitol Considerations by Senator Bill Coleman
Senator Bill Coleman-District 10 - April 21, 2022 5:29 pm
Senator Bill Coleman-Ponca City
While we as legislators represent the concerns and needs of our constituents in our districts, we must also always be looking for economic development opportunities that will diversify our economy, create jobs, and boost overall state revenues for generations to come. While a particular industry or opportunity may only be in one county, the taxes and resulting money spent by that industry, company or their employees has far-reaching impacts and benefits all Oklahomans when state revenues increase. Those revenues support our more than 60 state agencies that provide critical services like education, public safety, and health care, so we are always working to figure out how to grow our state’s economy and increase overall state revenues.
On Thursday, the Senate approved and sent to the governor’s desk one of the most significant economic development incentives in state history with the passage of House Bill 4455, creating the Large-scale Economic Activity and Development (LEAD) Act of 2022. I strongly support this innovative tax package that could very well help attract what would become one of the largest manufacturing plants in the nation to the great state of Oklahoma, creating an estimated 4,000 high-paying jobs over the next four years.
I’ll never forget when I was a freshman senator and we gathered outside to hear from newly sworn in Governor Stitt, and he said that Oklahoma was open for business. His words ring in my head often when we vote on bills to diversify and grow our economy. We are open for business. This act has the potential to change our state for generations, by not only attracting this potential company but others as well when they see what our state and people have to offer them.
The game of attracting business is in incentives. You either get in the game or you sit out. This is the Super Bowl of economic development opportunities, and I’m elated that we have the financial ability to seize this incredible opportunity that is estimated to infuse $26.4 billion in new revenue into our state economy.
This LEAD Act would put $698 million into the LEAD fund, which would provide special incentives with strict guardrails and workforce and capital investment benchmarks to the potential company. The state has learned some tough lessons in the past when it comes to incentives, so the LEAD fund has strict parameters. The potential company would receive a 3.4% annual tax rebate for five years, totaling 17%. But in order to receive this generous rebate payment, a minimum capital investment of $3.6 billion would have to be made. The company would also have to create 500 jobs in their first year, 1,000 by the second, 2,500 by the third, and 4,000 by the fourth year. All 4,000 of those jobs would have to be maintained through the fifth year. Benchmarks were also outlined in the bill for rebates for a subsidiary company, including a minimum capital investment of $500 million. These safeguards will protect our investment.
While oil and gas remains our largest industry, we also know this industry can be extremely volatile. This is why it’s so important to continue to work to diversify our economy. One recent example is the numerous incentives and policies, including education curriculums, to support the growing aerospace and aviation industry, which is currently the state’s second largest industry, followed by agriculture. The LEAD Act will hopefully entice another massive industry to set up shop here and then others will follow. I applaud the governor, the Department of Commerce, and legislative leadership for their tireless work to make this measure possible. Once it’s signed into law by Gov. Stitt, it shouldn’t be long before we find out if this Fortune 500 company will be calling the Sooner State home.
You can contact me by calling (405) 521-5581 or emailing [email protected]