Officials in Oklahoma Defend Wire Transfer Fee for Funding Drug- Enforcement Activities

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State officials say a fee on wire transfers of money is needed to help fund drug-enforcement activities. Others say the fee is discriminatory and will harm the ability of low-income people to send money to their families in other countries.

The fee, outlined in House Bill 2250 by state Rep. Randy Terrill, R-Moore, is $5 on money transmissions up to $500, plus 1 percent of the amount in excess of $500. Consumers who file state tax returns can get a refund of the fees. Businesses that fail to remit the fees to the Oklahoma Tax Commission face possible suspension of their licenses.

The measure took effect July 1.

Terrill was also the principal author of Oklahoma's new immigration law.

An analysis by House staff indicated that the measure would raise about $4 million annually to help fund the Oklahoma Bureau of Narcotics and Dangerous Drugs Control.

David Landsman is executive director of the National Money Transmitters Association, based in Great Neck, N.Y. He said the organization is made up of about 30 smaller money-transfer companies.

"I'm concerned for my industry and I'm concerned for the consumers that use our industry," Landsman said. "We work through agents and we help people send money to their countries of origin. There are some undocumented aliens among our clientele."

Landsman said several states have attempted to adopt such laws.

"Most of them are doing it in order to punish undocumented aliens," he said.

Landsman termed the income tax-based refund process "cynical."

"They're really not expecting anybody to do that," he said. "They don't believe any taxpaying Oklahoma citizens use this service, but that's not true. The truth is that it would be too inconvenient for somebody to go ahead and do that for $5. People are just going to look for other ways to send money."

Landsman predicted that people who live near a border with another state will cross the line to send money in a fee-free state, give it to family members or friends to do that for them, or open a bank account.

He said the measure amounts to a bill of attainder.

"A bill of attainder is a piece of legislation that was created to punish a certain person or sector of persons," Landsman said. "This is unconstitutional."

He predicted that small money-transmitter companies will leave Oklahoma.

"To me this is Nazi-ism," he said. "It's really terrible."

Landsman also said that a June 24 notice sent to licensees did not give them sufficient time to comply by July 1.

Terrill denied that the measure is aimed at any particular group, but said the income tax-based refund process would put the incidence of the fee on drug traffickers and illegal aliens.

The lawmaker also responded to Landsman's remarks.

"If by discriminatory, what he is saying is that the incidence of the fee would fall primarily on illegal aliens and narco- traffickers, then I would have to plead guilty to that," Terrill said.

Terrill said the drug bureau normally receives some of its funding from the proceeds of asset seizures and forfeitures, from which revenue has been declining for a couple of years. At the same time, he said, the percentage of contested seizures and forfeitures has risen from about 20 percent to 80 percent. …