Prosperity district bill gains ground (Journal Record)

By Catherine Sweeney

OKLAHOMA CITY – Legislators signed off on two vague bills this session that would create special districts with abnormally lax regulations. As one of the measures moves through committee and onto the floor, the picture is getting a little clearer.

The measures would create a mechanism to legalize so-called prosperity districts, where businesses and residents wouldn’t have to follow city, county or state regulations. A new and more lenient framework would replace the rules, and the district’s governing board would implement that. Although the bills span more than 100 pages, lawmakers and proponents struggled to explain exactly how the laws would work and how the districts would function.

House Bill 2132 and Senate Bill 548 both made it out of committee. The Senate bill didn’t make it to the full Senate, but the House of Representatives passed its bill off the floor. It will start the committee process in the Senate again.

House Speaker Charles McCall, R-Atoka, took on the bill and has pushed it through his chamber.

His spokesman, Jason Sutton, said now is an especially important time to consider implementing the law.

“It’s an opportunity for economic development,” he said. “The state revenues are a byproduct of people’s personal income, and people’s personal income is down right now.”

Personal income tax is one of the revenue streams that came in below projections this year, spurring almost $35 million in midyear agency spending cuts.

Prosperity district proponents across the country, including the national policy organization pushing the measure in five states, said forming special development zones could draw in firms that might otherwise never show up and that the option should be especially appealing for rural areas. The idea is that less stringent regulations could be a rare amenity that makes less desirable areas more enticing to developers.

During the committee hearings, opponents voiced concerns that the districts would take authority from local governments, that the language was overly legal and hard to understand, and that the bill raised more questions than it answered. On the House floor, Democrats raised several issues. State Rep. Jason Dunnington, D-Oklahoma City, noted that developing nations offer fewer regulations to potential developers, especially those from other countries, and that Oklahoma shouldn’t aim to conduct business like they do. It could allow foreign corporations to come in and exploit Oklahoma’s workers and land.

He pitched two amendments. One would ensure employees get minimum wage, sick leave, family leave and equal pay regardless of gender. The other ensured companies within the district would pay taxes. Members voted to table the amendments.

State Rep. Meloyde Blancett, D-Tulsa, said the bill’s language was enormously complex but lacked specificity. She called it a Pandora’s box and called to vote against it.

The House passed the measure 60-26 on March 22.

The Oklahoma Policy Institute, a progressive think tank based in Tulsa, raised similar issues.

“Our primary concern is the unknown aspect of this,” said policy analyst Courtney Cullison. “We have no idea what could be created.”

She said the organization focused primarily on worker and environmental protections.

The element of the unknown is essentially what killed the measure in Mississippi, said the bill’s author, Speaker Pro Tempore Greg Snowden. It failed in a House committee, even though he hadn’t gotten any negative feedback.

“Frankly, it’s one of those things that has to take a few years to percolate to get people to understand,” he said. “People that are philosophically conservative, I think, are attracted to this because it provides so much freedom from regulation.”

Similar to Oklahoma leaders, Mississippi’s proponents said the measure could be a cure to economic struggles in rural and other low-density areas, where recruiting business can be difficult.

“The Mississippi Delta is a very poor area,” he said. “The job opportunities aren’t what we would like for it to be. One of the things businesses are really looking for, we have learned, is that they want regulatory relief. They don’t want to deal with a lot of issues that inhibit their opportunity to be flexible.”

Arizona, Arkansas, North Dakota, Mississippi and Missouri have considered prosperity district legislation this year, but none have warmed to the idea as much as Oklahoma has. North Dakota’s measure made it to the House floor before it failed.

The national policy organization Compact for America aims to get legislation passed in multiple states, President Nick Dranias said. If it succeeds, the organization can create an interstate compact and take it to Congress. Then, the districts could find ways to replace federal regulations as well. Ideally, districts would already be in place and successful in each state, and advocates could use them as examples when attempting to cajole the federal government. That could result in more freedom while dealing with federal regulators, such as the Environmental Protection Agency or the Occupational Safety and Health Administration.

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