Oklahoma House passes tax package designed to help lure Sonics

OKLAHOMA CITY — A tax-incentive package designed to help lure the Seattle SuperSonics to Oklahoma City was given final passage by the Oklahoma House on Thursday — one day before NBA team owners are scheduled to vote on the Sonics' relocation request.

Following about two hours of debate, House members approved the measure on a bipartisan 67-32 vote and sent it to Gov. Brad Henry for his signature. It was approved by the Senate on Tuesday.

A spokesman for Henry, communications director Paul Sund, said House officials are fast-tracking the paperwork on the measure and planned to deliver it to the governor's office Thursday night.

"We will sign it as soon as we get it," Sund said. The House and Senate approved emergency measures that will permit the legislation to go into effect upon the governor's signature.

Sonics owner Clay Bennett has filed a relocation request with the NBA and a subcommittee of three NBA owners who visited Oklahoma City last month plans to recommend approval when all 30 owners vote on the team's request on Friday.

Final passage followed an intense lobbying effort by Bennett and other members of his ownership team to persuade House members to approve the measure. Sonics officials have suggested that the team's relocation might not be approved without the tax package.

The legislation expands Oklahoma's Quality Jobs Program to include the NBA and allow the Sonics to receive a rebate of a portion of payroll taxes paid by the team. It places a reimbursement cap on the incentives not to exceed the top income tax rate in Oklahoma, which is currently 5.5 percent.

The measure will also permit the company to receive rebates on the taxable payroll paid by players from opposing teams when they play in the city.

If the team relocates, it will bring 170 jobs with a $74 million payroll to the state, according to House Speaker Chris Benge, R-Tulsa. The rebate will be about $4 million a year and $60 million over its 15-year life.

Six weeks ago, Oklahoma City voters approved a sales tax extension to fund $121.6 million in improvements to a downtown arena and build a practice facility, also to lure the team.

Supporters of the rebate plan said the team's relocation would have a $180 million economic impact on the state over 15 years and bring other intangible benefits to the state, which hosted the New Orleans Hornets for two seasons after the team was uprooted from its home arena following Hurricane Katrina in August 2005.

"This is the perfect example of demand driving supply," said Rep. Tad Jones, R-Claremore. The Hornets regularly drew capacity crowds during the two years they were based in Oklahoma City, encouraging Bennett and his local ownership group to file the relocation request, Jones said.

"I think we deserve a professional team," Jones said. "It's going to be a better quality of life."

"I without a doubt think this is good for the state of Oklahoma," Benge said. He said the Sonics' presence in the city will give the state national and international exposure.

"We will have an opportunity to open some doors," the House speaker said. "I want an opportunity to be able to compete for those jobs."

Benge said the Sonics are taking a risk by relocating the team to a smaller market than Seattle and will receive no payroll-tax rebates if they do not relocate.

"One-hundred percent of zero is zero," Benge said. "If they don't come, we get nothing."

But opponents objected to the plan, arguing it is unnecessary because the team has already announced its intention to relocate

"I'm excited about the team coming to Oklahoma. And they're going to come no matter what we do today," said Rep. Paul Wesselhoft, R-Moore.

Others said the team's millionaire owners do not need a tax break.

"It's corporate welfare for millionaires and billionaires," said Rep. Randy Terrill, R-Moore, who referred to the legislation as the "give-away-the-farm act of 2008."

"The government shouldn't be involved in the business of spreading risks," Terrill said. "This is a giveaway, plain and simple. Don't look at the taxpayers as your insurance policy."

Rep. Dennis Johnson, R-Duncan, said he is a small-business man and has never turned to the state to start a business or stay in business.

"It never occurred to me to hold my hand out," Johnson said.

He also questioned the wisdom of giving tax incentives for what is essentially entertainment.

"Do we give too much credit to these guys in sports?" Johnson said. "Maybe we're a little skewed on what we need to help."