A Message From Our President & CEO

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A Message From Our President & CEO The 2016 legislative session is over and while it was one of the most challenging sessions for the business community I can remember, the end result was more

2 A Message From Our President & CEO The 2016 legislative session is over and while it was one of the most challenging sessions for the business community I can remember, the end result was more positive than negative. But we can already see that next session will involve many of the same battles. We knew that with a $1.3-billion appropriations shortfall, lawmakers would be looking to raise revenue on the backs of business. Early in session, businesses faced bills proposing more than a billion dollars in higher taxes. Fred Morgan President & CEO Despite having a mechanism in place for an independent panel to assess tax credits and incentives, lawmakers proposed halting important, proven programs for the aerospace, construction, medical and energy sectors. Simply proposing these bills had a chilling effect on capital investment and job creation. Who is going to expand their operations here if government changes the rules in the middle of the game? Generally, businesses plan years in advance and expect consistency in the legal, regulatory and tax climate. Radical changes in economic policies cause chaos and disrupt business investment....businesses plan years in advance and expect consistency in the legal, regulatory and tax climate. Radical changes in economic policies cause chaos and disrupt business investment. We fought against these job killing measures and managed to reduce the tax increase on business by more than 80% compared to what could have happened. Oklahoma will continue its investment in road and bridge infrastructure and our hospitals will not face drastic cuts in Medicaid provider rates. Unfortunately, a plan to rebalance the Medicaid system did not pass. This was a missed opportunity to address Oklahoma s uninsured care costs which get shifted to businesses and those with insurance. Oklahoma will also see long term negative effects from significant cuts to Higher Education. Our state s workforce needs are well documented. Our member businesses have trouble finding trained, skilled workers and reducing our higher education investment will exacerbate the problem. Lawmakers did make changes in Common Education that help the business community, including accepting new state standards and making student tests more relevant and comparable to their peers in other states. So with another legislative session in the books, we are already looking towards next session. It starts with making sure probusiness candidates get elected, then listening to our members to determine our 2017 agenda. If you think your company s voice is not being heard, now would be a good time to join the State Chamber. As this year proved, if you don t have a seat at the table, you may be on the menu.

3 BudgetFY2017 State Budget In February, the Board of Equalization certified But the FY2017 State Budget actually spends $5.8 Billion $6.8 Billion In revenue available for the Legislature to spend. So where did the extra BILLION dollars come from? Business Tax Incentives & Rebates Capped Transportation Bonds Collection Enhancement One-Time Funds (Unclaimed Property & Agency Reserve Funds, Rainy Day Funds, Revenue Classification Reforms) Personal Income Tax Changes $125 Million $200 Million $62.5 Million $574 Million $113 Million Total: $1.07 BILLION This allowed some state agencies to see little or no cuts from the amount received in FY2016 Common Education +0.62% Healthcare Authority +9.24% Dept. of Human Services +2.57% Mental Health +2.18% Corporation Commission +0% Corrections +0% But some agencies saw significant cuts on top of reductions in 2016: Higher Education -7.66% Career Tech -5.30% Military Department -4.42% Commerce -2.57% Agriculture -4.45% Tourism & Recreation %

2016 Legislative Wrap-Up Economic Development, Taxation & Retail, Workers Compensation Jonathan Buxton Senior Vice President Government Affairs In spite of the horrible budget outlook, the

Thanks to HB 2531, the Oklahoma Retail Protection Act, local retailers will get some relief from unfair competition by creating a wider definition to include online retailers for the purpose of

The Multi-Year Revenue and Expenditure Projection Act, SB 1030, requires agencies responsible for the collection of monies deposited to the General Revenue Fund and each Special Revenue Fund to

4 2016 Legislative Wrap-Up Economic Development, Taxation & Retail, Workers Compensation Jonathan Buxton Senior Vice President Government Affairs In spite of the horrible budget outlook, the legislature did a few things to better prepare Oklahoma for the future. Thanks to HB 2531, the Oklahoma Retail Protection Act, local retailers will get some relief from unfair competition by creating a wider definition to include online retailers for the purpose of collection and remittance of sales taxes. The Multi-Year Revenue and Expenditure Projection Act, SB 1030, requires agencies responsible for the collection of monies deposited to the General Revenue Fund and each Special Revenue Fund to provide current and future revenue estimates for the next two years. Appropriated agencies must also submit an estimate of fiscal needs for the ensuing fiscal year and the following two fiscal years. The Oklahoma Energy Revenues Stabilization Act, HB 2763, creates a new fund which will receive annual gross production revenue and corporate income tax collections which exceed the average collection over the previous five years. This fund could then be used to offset significant downturns in the economy. Finally, SJR 68 will put to a vote of the people whether to modernize Oklahoma s alcoholic beverage laws, including the sale of cold strong beer and wine in grocery stores. Human Resources & Labor Law, Lawsuit Reform, Unemployment Compensation, International Trade Issues Mike Seney Senior Vice President Policy Analysis & Strategic Planning Some very important bills passed in the area of Human Resources and Labor Law. A recent National Labor Relations Board decision that overturned years of labor law regarding franchisors, franchisees and their employees is being addressed at the state level. SB 1496 clarifies that franchisees and their employees are NOT the employees of franchisors. This will provide clarity to an important segment of Oklahoma s business community. There is now a seasonal employee designation thanks to HB 3164 that will help businesses that don t operate at the same staffing levels year-round. The Oklahoma Employment Security Commission (OESC) will keep its precedent manual up to date under HB This is crucial for companies that rely on the manual for guidance in labor issues. Finally, in the area of lawsuit reform, HB 2844 clarifies that a lawsuit or claim against an officer, director or shareholder of a corporation can only be brought for conduct, acts or contractual obligations outside their scope as an officer, director or shareholder. Energy & Natural Resources, Transportation, Military Affairs Oklahoma has a serious shortage of workers with Commercial Driver s Licenses (CDLs) and SB 1018 aims to get more on the road by allowing those in America through the H2A Temporary Agricultural worker or J-1 Visitor Exchange Program to apply. This is expected to be a big benefit for Oklahoma s rural areas. CNG vehicles will get an exemption from some weight restrictions under SB It allows a vehicle to exceed gross vehicular weight limits if the difference is attributable to the natural gas tank and fueling system. The Corporation Commission s Plugging Fund will continue for five more years under HB This is an important program for the energy industry which is already dealing with low commodity prices. Finally, HB 3019 will help reduce the regulatory burden on power generators in Oklahoma who have to dispose of fly ash. Reducing this regulatory burden will benefit the utility industry as well as all businesses by keeping rates low in Oklahoma. Mike Jackson Senior Vice President Political Affairs & Advocacy

2016 Legislative Wrap-Up Health Care, Workforce Development, Aerospace, Technology & Telecommunications Jennifer Lepard Vice President Government Affairs Oklahoma s new education standards take

Student testing was overhauled thanks to HB 3218.

5 2016 Legislative Wrap-Up Health Care, Workforce Development, Aerospace, Technology & Telecommunications Jennifer Lepard Vice President Government Affairs Oklahoma s new education standards take effect for the school year. Our review of these standards shows they provide a roadmap to ensure Oklahoma children are college or career ready. Student testing was overhauled thanks to HB It ensures Oklahoma s tests catch struggling students early to improve classroom instruction, predict future academic success, and accurately gauge college and career readiness. The bill also allows students to take a college admissions exam like the ACT or SAT free of charge. Students will be better prepared for their eventual career through SB 1269 which allows a college and career endorsement on a high school diploma. It s like letting them minor in a subject that will prepare them for a career in that field. In the area of Aerospace and Technology, HB 2599 provides protection for critical infrastructure from unwanted UAV flights while making sure it doesn t put unnecessary restrictions on drones. Finally, hospitals and schools in rural parts of the state will benefit from HB 2616 which levels the playing field for telecommunications providers who pay the Oklahoma Universal Service Fee that encourages telecom and high speed internet infrastructure development. This session we launched a new website OKJobKillers.com. The goal of this site is to raise awareness of bills that negatively impact the future of jobs in Oklahoma. We highlighted bills that raise taxes on businesses, impose costly mandates, expand government red tape or roll back successful reforms. JobKillers are our number one target in our fight to defend Oklahoma employers. This year we defeated bills that would increase the costs of doing business by over a billion dollars. From taxing business services to eliminating or capping valuable economic development incentives, stopping these bills helped keep down the cost of doing business in Oklahoma. Bills to impose higher minimum wages, mandatory paid leave and increase other compliance costs by millions were defeated. We also stopped bills that would have created burdensome regulatory schemes for oil and gas companies transporting equipment in Oklahoma. Several eminent domain laws that would have added to the judicial red tape for important infrastructure projects were halted thanks to the intervention of the State Chamber and our members. We also protected valuable accountability reforms to improve our workforce pipeline. In spite of stopping some of the most egregious JobKiller bills, several bills increased costs for the oil and gas, construction, manufacturing, railroad and coal industries. Another JobKiller will increase the cost of providing prescription drug coverage to your employees. Our team fights for Oklahoma s future by defending the right of every business to thrive and we will continue our fight to stop JobKillers next year.

UNITE The State Chamber is the Voice of Business at the state Capitol, but we need to have that voice amplified by businesses large and small. Let lawmakers know where you stand.

6 UNITE The State Chamber is the Voice of Business at the state Capitol, but we need to have that voice amplified by businesses large and small. Let lawmakers know where you stand. Tell them that policies which hurt one industry have ripple effects that impact every industry. Explain how adding more regulations hurt your business. The business community isn t a series of separate silos that don t interact; it s a complex web of connections. We can t be complacent and we can t assume that a bill affecting one industry won t affect all others down the road. We have to continue to work together for policies that continue to move Oklahoma s economy forward. When we all are committed, personally involved, and engaged in the process, we ensure that the voice of business is heard in the halls of the Capitol. - Bradley Krieger Chairman, Arvest Bank - Oklahoma City Chairman of the Board, State Chamber of Oklahoma WE MEAN BUSINESS PO Box 53217, Oklahoma City, Oklahoma

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