Saturday, July 20, 2024

Executive News: Speedbumps being hit in state legislature

We have officially entered the last month of the state legislative session, and just like clockwork, the craziness and the nonsense have already started.

As I’ve mentioned before, the only thing the legislature is statutorily required to accomplish is to pass a state budget. So, all the policy issues still being considered must be across the finish line before the final budget is passed.

Adrian Beverage, OBA President and CEO

It’s also an election year, and the primaries are on June 18, and all the members who are being challenged in a primary are ready to get out and go back to their district to prepare for the election.
With all that, throw in the fact some major changes were just made in the Senate that throw a huge monkeywrench into these last couple of weeks.

I’ll talk a little more about that in a minute.

While there have been some victories for us this session, there has also been some losses. HB 4092 has been talked about for months and was a significant piece of legislation we were pushing this year.

This is the bill that would have benefited rural communities and been a great tool for all the bankers in Oklahoma. The bill would’ve allowed you to take the net interest earned on some ag-related loans that were made in communities of 5,000 or fewer and deduct that amount of interest income from net income.

HB 4092 sailed through the House and then arrived in the Senate. Our author, who is also the chairman of the Senate Finance Committee, had some concerns, and we addressed those in a committee substitute. The biggest concern was how much the program could potentially cost the state. There aren’t any similar programs in place, so knowing what the potential impact could be is almost impossible to calculate.

We went ahead and put a $5 million cap on the program and a three-year sunset. The sunset would allow the program to go away after three years if it wasn’t going as planned, either from our perspective or the state’s perspective.

The day finally arrived that HB 4092 was scheduled to be heard in committee. We’ve made sure that every committee member had all the information they needed to hopefully make a responsible vote in our favor.

The initial questions were what you would expect and were handled by our author … but then the tables turned.

Two urban senators started asking our author why this bill would only apply to small communities and not those with a population greater than 5,000? Why are we only doing something to benefit some and not everyone?

This line of questioning went on for what seemed like hours, and others on the committee started to pile on.

The argument we shouldn’t do anything for just rural communities is absolute garbage. I’ve been going to the Capitol for 24 years and have seen hundreds of bills pass that are specifically intended for rural areas.

Regardless, HB 4092 didn’t make it out of Senate Finance and is dead for this legislative session. Lots of lessons were learned, and we made the bill better than its original version, and we’ll try it again next year.

• • •

On April 30, things went a little off the rails in the state Senate, and it couldn’t have come at a worse time. As I mentioned before, the only thing the legislature has to do is pass a balanced budget. There are about six people who are part of the inner circle in the budget process: chairman of Senate appropriations, vice chairman of Senate appropriations, chairman of House appropriations, vice chairman of House appropriations and, usually, two staff members from the governor’s office.

Sen. Roger Thompson has been the chairman of Senate appropriations for years, and some would argue his position is the most powerful in state government. The vice chair for Senate appropriations is Chuck Hall, who is chairman of Exchange Bank, in Perry.

Anyway, out of nowhere on April 30, Senate President Greg Treat removed Thompson as chair of Senate appropriations and made Hall the new chairman.

As of my deadline for submitting my article we are still waiting to see what happened and why the changes were made. Whatever happened, it does happen to be great to have a banker in this position, and we look forward to working with Hall on his new journey.

• • •

Earlier this month, word started to spread President Biden will propose easing federal restriction on cannabis by reclassifying the drug.

The proposal would change the classification of marijuana from a strictly controlled schedule I narcotic into a schedule III drug. This change would expand the availability of cannabis for medicinal purposes.

Unfortunately, this proposed change has no impact at all on the issues we face as bankers regarding cannabis. The only way banks can legally bank the cannabis industry is if the Safe Act passes the U.S. Senate and is signed into law by the president.

• • •

Next month, we’ll have a full recap of what happened and didn’t happen during this year’s legislation session.