Economic Recovery Act Passes House

Article excerpt

The Oklahoma Economic Recovery Act of 1987 was passed 70 to 24 Thursday by the House of Representatives, but a potential $20 million in added tobacco tax to fund science and technology research was eliminated.

The tobacco tax would have provide approximately the $20 million to aid science and technology research. The bill also provides for a venture capital operation and an agency with bonding authority up to $100 million for economic development.

The tobacco tax sections were removed by a vote of 64 to 30. Theu would have placed tax increases on cigarettes and cigars by 2.5 mills per cigarette and per cigar, plus a 15 percent tax on pipe tobacco and a 10 percent tax on chewing and smokeless tobacco and snuff.

The revenue was to be placed in a revolving fund for the Oklahoma Science and Technology Corp. to fund the research activities and other programs under the corporation's jurisdiction.

In addition, the House passed one of the companion bills to the economic recovery program and killed the other:

- One calls for a vote of the people to allow the state to provide grants and loans to private businesses up to $100 million for economic development. It was passed.

- The other would have called for a vote of the people to allow some state agencies to own stock in private companies for economic development purposes. It was killed.

Rep. Don McCorkell, D-Tulsa, one of the authors of the economic recovery act - House Bill 1444 - moved to have the title of that legislation struck.

This means that if the recovery bill is passed by the Senate, it will go into conference committee for continued discussion.

The measure is an omnibus piece of legislation developed from a report developed by Counsel for Community Development, a Cambridge, Mass., firm headed by Belden H. Daniels as president.

Basically, the economic recovery act establishes a public/private entity known as Oklahoma Futures.

"Oklahoma Futures will develop long-range and short-range economic planning that would be carried out by the Oklahoma Department of Commerce," said McCorkell.

The bill also creates several new entities which would be under the direction of Oklahoma Futures and the Oklahoma Commerce Department. These include:

- The Oklahoma Capital Corp., in which private businesses could invest venture capital, which would be used to provide loans to businesses which conventional lending institutions consider too risky to finance.

In turn, investors would be allowed a 5 percent tax credit of their contribution into the capital corporation for seven years. The total capitalization amount for the corporation could not exceed $100 million.

- The Oklahoma Development Finance Authority, which McCorkell said would probably result in a reorganization of the existing Oklahoma Industrial Finance Authority.

The new development finance authority would be allowed to issue up to $100 million for an economic development credit enhancement reserve fund for the authority.

The fund would be used by the authority only to secure payment on any revenue bonds issued by the authority after other pledged monies and other reserve funds are used to the extent of the law.

In addition, the Oklahoma Development Finance Authority would create an insurance fund for the security of bond holders.

- The Oklahoma Science and Technology Corp., a board which would provide funding for commercial and non-commercial scientific research. …