Bill proposes extending incentives to defense contractors
by Janice Francis-Smith
The Journal Record
3/12/2009

OKLAHOMA CITY – State Rep. Mike Jackson, R-Enid, is happy that his fellow
lawmakers approved his bill to extend Quality Jobs benefits to defense
contractors. But lawmakers appear to be the only people who know enough
about the bill to be happy about its passage from the House of
Representatives on Tuesday.

“Quality Jobs programs in the past have been one of the success stories of
the Oklahoma Legislature,” Jackson told legislators in the House Chamber.
“We would be the first state in the union to do this. Now there is no
incentive for primes to outsource to companies in the state of
Oklahoma.”House Bill 1468 was approved on a vote of 90 to 8 in the House of
Representatives, and will next be considered by members of the state
Senate. The measure would extend Quality Jobs tax incentives to companies
that contract with the federal government for defense work and that hire
Oklahoma subcontractors. The Quality Jobs program offers incentive payments
to companies that create new, well-paying jobs, though the program was
originally designed to assist manufacturing companies.

HB 1468 would also extend eligibility requirements to service companies
that provide testing, research, development, consulting or other services.
Qualifying business could receive quarterly cash payments of up to 5
percent of new taxable payroll created.

“This legislation will encourage contractors doing federal defense work to
hire subcontractors in Oklahoma,” said Jackson. “I believe this legislation
will bring quality, high-paying jobs to Oklahoma and grow our economy.”

Jackson said the bill could produce 1,000 new jobs with an average salary
of $70,000 over the next 10 years. That estimate translates into millions
of dollars in new personal and corporate income tax collections, he said.

Oklahoma companies only win about 10 percent of the $5 billion in federal
contracts the Department of Defense awards each year, according to the
Oklahoma Aviation Commission. Many opportunities in Oklahoma involve Tinker
Air Force Base in Oklahoma City, the state’s largest single-site employer
and home to the world’s largest military aircraft repair facility.

On Wednesday, Oklahoma Aeronautics Commission spokesman Harve Allen said
Executive Director Victor Bird was still reviewing HB 1468.

Aerospace companies in Oklahoma with a history of defense contracting
offered no comment on the measure. Jennifer Hogan of Boeing said their
legal staff was closely tracking HB 1468 and other bills that may affect
Oklahoma’s aviation industry, but it is the company’s practice not to
comment on pending legislation.

Valerie Ellis of the Nordam Group also declined to comment.