By Patrick B. McGuigan
When House Bill 2347 was introduced on the first day (February 1) of the 2010 legislative session, its sponsor was state Rep. Ken Miller, chairman of the House Appropriations and Budget Committee. When it passed at the end of the session in May, eventually gaining the signature of Gov. Brad Henry, it had emerged from a conference committee on which Miller was not a member.
Rep. Miller in the end opposed the measure, saying he considered it a tax increase (rather than a user fee hike) that violated State Question 640, the citizen initiative requiring all new taxes to gain popular approval.
Tuesday of this week, Insurance Commissioner Kim Holland sued to block enforcement of the new law, with her lawyers saying, among other things, that the one percent levy the bill imposes on health insurance claims is a tax, not a fee, and that it was processed within five days of the end of the state legislative session, which is prohibited.
The now-controversial revenue measure – whether characterized as a tax hike, fee increase or some other way – followed a labyrinthine path to passage in the Legislature. It prevailed in the face of opposition from the Greater Oklahoma City Chamber of Commerce.
The original bill Miller introduced was the classic “shell bill,” with no substantive language. Such bills are in most cases non-controversial vehicles into which appropriations language is dropped after departmental or broader budget agreements are reached among legislative leaders and the state’s chief executive. Agreements often come late in legislative sessions.
On May 21, H.B. 2347 went from shell to substance. While appropriations bills usually go to the Appropriations Conference Committee, H.B. 2347 was removed from that panel and assigned to a new conference panel comprised of Representatives Doug Cox of Grove, House Speaker Chris Benge of Tulsa, Reps. Kris Steele of Shawnee, Jeff Hickman of Dacoma, Danny Morgan of Prague, and R.C. Pruett of Antlers; and Senators Mike Johnson of Kingfisher, Charlie Laster of Shawnee, and President Pro Temp Glenn Coffee of Oklahoma City.
That same day, Miller was no longer the measure’s principal author -- and state Rep. Scott Martin of Norman was no longer a co-author. Replacing Miller as the bill’s ramrod was state Rep. Cox. The new conference committee approved the new language quickly, just hours before the measure moved to the full House.
As the legislative pace accelerated in the session’s final days, H.B. 2347 was the last measure hard before the constitutionally-mandated deadline for revenue measures was reached. (Provisions forbid revenue bills from being passed in the last five days of a legislative session.) Legislators complained that the final language of H.B. 2347 was unavailable to them (and to the public and press) until shortly before it was first heard on the House floor.
The House voted to waive the customary 24-hour rule (allowing time for language to be examined before consideration) to press the measure along. Following the rule waiver, a number of procedural actions ensued as the bill was considered.
House members twice attempted to attach the emergency clause (needing a two-thirds vote) to put the proposed 1% levy into effect. The measure had majority support, but could not muster super-majority strength needed for immediate enactment. Among members opposing the bill on the merits was Rep. Miller, who said it was a tax increase.
A final attempt to add the emergency clause in the House came on May 24, but it failed again. The measure then went to the state Senate for consideration. Although the Senate got to the bill quickly, first consideration apparently came too late to avoid the five-day stricture.
Nonetheless, supporters pressed the measure along, it prevailed, went to the governor and was signed into law. Without the emergency provision, the levy the law created cannot be collected until late August.
Wednesday evening, in response to a request for comment from CapitolBeatOK, Commissioner Holland said: “The oath I took to protect the Constitution is of utmost importance to me, and I believe that is reflected in the petition we filed Tuesday challenging HB 2437.”
She continued, “A law can be the greatest idea in the world, but it must be passed in accordance with the Constitution. I encourage every Oklahoman to read the petition as we await further guidance from the Court.”
In legal papers filed at the State Supreme Court Tuesday, Commissioner Holland said the measure violated that last-five-days-provision concerning legislative action on revenue bills, that the fee is unconstitutional and that she has no authority to collect it.
To sum up further, Holland contends the new law is a tax and not a fee under Article V of the state constitution, including the provisions of State Question 640, a ballot initiative requiring popular approval for new taxes. Holland also asserts the new law is unenforceable under the Employee Retirement Income Security Act (ERISA), federal legislation she believes limits state actions as a matter of policy.
Wednesday (July 21), the State Chamber, Oklahoma’s Association of Commerce and Industry, stressed its opposition to the levy and said it supported Commissioner Holland’s legal intervention.