The “mega-legislation” bill that passed the Oklahoma Legislature quickly last week was signed by Gov. Kevin Stitt on Monday. It is meant to bring a multi-billion-dollar business to the Sooner state.
‘Project Ocean’ Incentive Proposal
As part of the plan, the firm, which is believed to be Panasonic, would be required to spend at least $3.6 billion on its Oklahoma project in order to qualify for the financial incentives made available by House Bill 4455.
Additional recruiting targets would be established, starting with at least 500 full-time employees in the first year and progressing to 4,000 full-time employees by the fourth and fifth years of operations, respectively.
The governor and legislative leaders have hailed the $700 million incentive package as a major victory for the state and a potentially game-changing development opportunity.
“This could well be the most important economic development and diversification legislation we’ve ever had the opportunity to advance,” according to Senate Appropriations Chair Roger Thompson, R-Okemah, on Thursday after the bill passed the Senate with a 41-5 vote count.
Economic Activity and Development Act
In accordance with the Large-Scale Economic Activity and Development Act (LEAD), the corporation in question would be eligible to receive a 3.4 percent yearly refund on qualifying capital expenditures for a period of up to five years. The total amount of refunds may not be more than $698 million.
Concerns were raised by both chambers last week about the secrecy of the pact, which saw the governor and key lawmakers sign a nondisclosure agreement, the hurry to enact the bill the same week it was introduced, and the push to finance out-of-state corporations rather than local ones.
Panasonic, which inked a deal in October to provide batteries to electric car startup Canoo, would also be eligible for incentives under current schemes, according to a company spokesperson.
A $300 million state incentive package is scheduled to be awarded to Canoo for the construction of an electric car facility in the MidAmerica Industrial Park near Pryor, which is where Panasonic is expected to locate if it decides to settle in Oklahoma.
As an additional advantage, a subsidiary of the qualified corporation may be eligible to earn benefits under the program if the subsidiary spends at least $500 million in its Oklahoma project as part of its participation in LEAD.
What is the LEAD Act Incentive?
The LEAD Act incentive package will be supported this year using money from the state’s General Revenue Fund that has been left over from previous budgets. Members of Congress established the Project Ocean fund via House Bill 4455, and they will draft legislation at a later date to transfer the funds.
It is anticipated that Oklahoma will have a direct and indirect economic effect of $26 billion if the state is awarded the contract. If Oklahoma is awarded the contract, the state would be home to the second-largest manufacturing plant in North America.
