Newspaper article THE JOURNAL RECORD

Bellmon Signs Insurance Office Tax Credit Bill; Vetoes Equipment Bill

Newspaper article THE JOURNAL RECORD

Bellmon Signs Insurance Office Tax Credit Bill; Vetoes Equipment Bill

Article excerpt

A bill whichwould give an insurance premium tax credit to out-of-state insurance companies which establish a regional home office in Oklahoma was signed by Gov. Henry Bellmon Friday.

However, the governor vetoed another bill which would give certain businesses an income tax credit for purchasing equipment that would result in the hiring of additional employees.

House Bill 1176, authored by Rep. A.C. Holden, D-Dewey, has been called the "State Farm bill," because it was designed specifically to entice State Farm Insurance Co. of Bloomington, Ind., to establish a regional home office for the Oklahoma-Kansas area.

State Farm currently is considering Broken Arrow and Wichita for the site of the new office, which would employ approximately 600 people.

Though Bellmon signed the bill, he issued a statement that possible changes in the state's premium tax laws in the next legislative session could affect House Bill 1176.

"The state and 55 foreign insurance companies which have paid the premium tax under protest for the past half dozen years have reached a tentative settlement of lawsuits challenging the tax," Bellmon said.

"If this settlement is consummated, as I hope it will be, the state will conduct a study of the premium tax area during the interim between legislative sessions," he continued. "this study may show that this tax should be completely restructured. If so, House Bill 1176 could be affected."

When contacted Friday, Holden said he did not believe the tentative settlement the governor and the attorney general's office had reached earlier this week with out-of-state insurance companies will have any effect on his bill.

That settlement is expected to result in $70 million being paid to the state and $35 million being paid to the involved insurers from a $117 million fund in the state treasurer's office consisting of premium tax credits paid under protest by foreign insurers for the past six years.

Holden was the author of the bill which put into effect the law which requires insurers to pay a 4 percent tax on each insurance premium they write in state. Foreign firms are eligible for a total tax credit if they invest 30 percent or more of their total assets in Oklahoma.

House Bill 1176 passed with unbelievable speed, in comparison with most other legislation this session, through both the House of Representatives and Senate Thursday.

According to Holden, the quick passage of the bill was prompted by Sen. Ged Wright, R-Tulsa, in whose district State Farm is considering locating its office.

"I frankly wasn't interested in moving the bill through unless it looked like State Farm was really going to come here," said Holden. "The people at State Farm have never talked to me about the bill, so I've wondered if they thought it was important at all. …

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