Oklahoma House of Representatives
Mike W. Ray, Media Division Director
March 8, 2004

Summary of House Floor Activity March 8, 2004

OKLAHOMA CITY -- Restricting youth access to beer, insurance coverage for tobacco cessation programs and products, restoring funds for a senior citizens meals program and for the popular Rural Economic Action Plan, economic development incentives for existing companies, and closing a loophole on unemployment benefit payments to highly paid contract employees, were among measures the state House of Representatives debated Monday.

CRACKDOWN on 'KIDDIE BARS'
The House voted overwhelmingly to close a door that affords young people access to rivers of beer.

Four years ago the Legislature amended state law to permit establishments to use admission fees in the calculation of their "main purpose designation," provided that only people 18 years of age or older are permitted to enter the licensed premises. If the primary purpose of an establishment is something other than the sale of alcoholic
beverages, the establishment may allow a person younger than 21 inside.

Under existing law, the stated main purpose of these establishments is typically a dance or concert hall; as a result, 18-, 19- and 20-year-olds may legally enter and remain on the premises. However, for all practical purposes, many of these establishments are bars that cater to underage young people, the author of House Bill 2473 told his House colleagues.

Once inside these crowded bars, underage people can easily obtain low-point (3.2%) beer. These establishments advertise coin beer nights (a coin of any denomination buys a beer) and drown nights (pay one price, drink beer all night). Consequently, an underage person can stay and drink for a long time for a relatively small price (typically a $5 admission fee). Further, drug use reportedly is rampant at such gatherings.

HB 2473 would prohibit drink specials at locations that charge admission fees. For example, it would be illegal for the owner/operator/waiter at an establishment licensed for on-premises consumption of low-point beer to "sell or offer to sell to any person an
unlimited number of drinks of low-point beer during any set period of time for a fixed price..." Private functions not open to the general public would be exempt from the prohibition.

The intent of the legislation is to eliminate the major draw cheap, unlimited beer for underage persons. The bill would not affect legitimate bars and restaurants that offer drink specials on low-point beer but restrict access to their premises.

The House approved the proposal, 97-1, and referred HB 2473 to the Senate.

EXTENDING HEALTH INSURANCE COVERAGE
To TOBACCO CESSATION PROGRAMS, PRODUCTS
Legislation that would extend compulsory insurance coverage to tobacco cessation programs was barely resuscitated by the House of Representatives.

House Bill 2613 was defeated March 2 by the narrowest of margins, 50-49, but passed, 51-48, on reconsideration March 8. The bill now will be sent to the Senate.

The bill decrees that any health benefit plan offered, issued or renewed in Oklahoma after Jan. 1, 2005, would be required to include coverage for "comprehensive tobacco dependence treatment programs..."

When the bill was first considered, opponents questioned the way in which tobacco cessation programs would be financed under HB 2613.

The author of the bill contended that insurance companies would realize a net savings by providing health benefits for tobacco cessation programs and products such as nicotine patches and gum. Although a month's supply of nicotine patches, for example, costs about $100, insurance companies ultimately would benefit from fewer and smaller medical claims, he maintained.

The bill's author referred to a statement from the American Cancer Society that, "Based on cost per life year saved, treatment for addiction to tobacco products ranks higher in cost-effectiveness than virtually all other preventive health programs, including mammography, colon cancer screening, pap tests ... and pharmacological treatment of
mild to moderate hypertension."

However, a critic of the bill suggested that Oklahomans' tobacco cessation expenses should be financed from the state's tobacco settlement trust fund, not by insurance companies.

According to the Office of State Finance, Oklahoma has already received $303.5 million from the national tobacco settlement that Oklahoma and 45 other states reached with leading tobacco product manufacturers in November 1998. Of that amount, $130.5 million has been deposited in an endowment trust fund, ledgers reflect.

In the author's defense, a Representative pointed out that the trustees of the tobacco settlement fund have allocated none of the interest earnings "for treatment of addiction."

The critic asserted that while insurance companies might ultimately save money by paying tobacco cessation expenses, consumers would pay higher insurance premiums because of that additional coverage.

"Consumers who don't smoke have a problem with this," she said.
Another opponent of the bill indicated that insurance carriers already are burdened with mandatory coverage for myriad ailments. "We have 12 pages worth of insurance mandates now," she said.

In a similar vein, one Representative pointed out that nothing in state law prohibits insurance companies from offering tobacco cessation coverage now. "A common complaint" from the Oklahoma State and Education Employees Group Insurance Board (OSEEGIB) is "the rising cost of insurance," he said.

The bill's author, though, pointed to a House fiscal impact statement which related that OSEEGIB reported that the provisions of HB 2613 "would have no material financial impact" on OSEEGIB medical claims or premiums.

UNEMPLOYMENT BENEFITS INTENDED
FOR the NEEDY, NOT the GREEDY
Legislation intended to prevent high-paid contract employees from collecting unemployment benefits after they have accepted a generous buyout was endorsed by the House.

House Bill 2497 provides that any employee who has received $100,000 or more in a contract settlement would be ineligible to collect unemployment benefits.

Workers are prevented under state law from voluntarily waiving unemployment benefits, regardless of the compensation received. As a result, a terminated employee can file a benefit claim and receive unemployment benefits if otherwise eligible, despite having already been well-compensated for leaving his/her job.

John Miley, deputy counsel of the Oklahoma Employment Security Commission, said the legislation would affect only employees with formal written contracts, typically found in fields such as sports and entertainment.

An amendment the House attached to HB 2497 would prevent employees of the non-profit Head Start program from receiving unemployment benefits during the summer interim between semesters. State law already prevents school teachers from collecting unemployment benefits for time not worked between two successive academic years or during "an established and customary vacation period or holiday recess." The
amendment adds state Head Start programs to the definition of an educational institution. Head Start offers child development programs to young children in low-income families.

The amended bill passed the House, 96-2, and was transferred to the Senate.

MEALS for ELDERLY
The House has voted to restore a state-funded nutrition program that fell victim to budget cuts last year.

House Bill 1818 would appropriate $3 million to the Community Expansion of Nutrition Assistance (CENA) program, a state-funded nutrition program to provide meals for needy senior citizens.

The funds could be used not only for food but also to finance delivery of meals to the homebound, one Representative said recently.

Depending upon the needs of a particular senior center, the funds also could be used to pay maintenance and repair expenses at nutrition sites, to buy food preparation or storage appliances such as a stove or refrigerator, or even to pay nutrition center utility bills, another Representative said.

The Legislature established CENA in 1997 to help fund independent senior centers throughout the state, and statistics indicate the program has been successful.

More than one million meals were served to 235 senior centers in Oklahoma prior to the CENA program. In 2001 the total number of meals served more than doubled, to 2.26 million in 344 statewide independent senior centers funded with CENA dollars.

Prior to the program's existence, 13,143 persons were served statewide. Just over 27,000 people in the same category were served in 2001, an increase of almost 106 percent. The State Independent Senior Center noted that Oklahoma's population is "graying".

HELP the NEEDY PAY THEIR UTILITY BILLS
Low-income families could receive assistance in paying their utility bills if legislation approved by the House becomes law.

Under state law, any public utility deposit that is paid in advance by a customer and that remains unclaimed by its owner for more than a year after service has been canceled "is presumed abandoned." Those funds are transmitted to the State Treasurer's Office; 55 percent of the money is held in trust to pay claims, and the remaining funds are deposited to the state's General Revenue Fund for appropriation by the Legislature.

House Bill 2225 would instead direct the 45 percent of the unclaimed revenue to a special fund earmarked to help pay utility bills of indigent families.
The state Department of Human Services would manage the fund for use in the Low Income Home Energy Assistance Program (LIHEAP), a federally mandated program designed to help needy families pay their heating and cooling bills.

LIHEAP program coordinator Mel Phillips estimated that 90,000 Oklahoma households will receive financial assistance through the program this year. Eligibility is based on each family's income and assets. The average one-time public assistance payment is $90 for heating bills and $100-$110 for air conditioning in the summer, he said.

Tim Allen, communications director for the State Treasurer's Office, said that while unclaimed deposits are not a steady source of funds, the deposits averaged $100,000 per year over the past four years.

The House voted 92-0 in support of HB 2225, which now faces a vote by the Senate.

RESTORING REAP FUNDING
A measure to restore full funding to the Rural Economic Action Plan (REAP) passed the House in a split vote.

House Bill 1819 cleared the House, 75-24, and will be delivered to the Senate.

The Legislature created the Rural Economic Action Plan in 1996 to help underwrite public improvements in municipalities of 7,000 population or less, particularly areas with 1,500 or fewer residents.

HB 1819 would restore almost $12 million slashed from the REAP in state budget cuts triggered by a dramatic decline in tax receipts. The bill also would earmark $20 million for the REAP for Fiscal Year 2005.

HB 1819 would appropriate $9.5 million to the 11 regional substate planning districts (COEDD, ASCOG, SWODA, EODD, SODA, OEDA, NODA, KEDDO, ACOG, INCOG, and Grand Gateway), to replace budget cuts.

The bill also would appropriate almost $2.3 million to the Oklahoma Water Resources Board, to replace budget cuts imposed in the agency's water projects fund; the Legislature allocated $2.2 million to the fund last year rather than the customary $4.5 million. The Water Board uses that account to issue REAP grants which help underwrite water and wastewater system improvements in communities of 1,750 population or
less.

For FY 2005, House Bill 1819 would allocate $15.5 million to the 11 regional councils of government and $4.5 million to the Water Resources Board, for a total of $20 million.
The Legislature has appropriated $141.86 million to the REAP over the past eight years, ledgers reflect.

ECONOMIC DEVELOPMENT INCENTIVES
The House overwhelmingly supported a measure that would offer cash rebates as an incentive for at-risk manufacturers to expand and modernize their facilities, keeping jobs in Oklahoma.

The "Oklahoma Quality Investment Act" created by House Bill 2373 would allow manufacturers that spend at least $1 million on capital improvements to receive up to 10 percent of their investment in cash rebates over a five-year period.

HB 2373 targets Oklahoma manufacturing establishments that are identified by an eight-member committee as being especially susceptible to closure or transfer out-of-state. The committee would review companies determined to be "structurally non-competitive" but whose position "can be offset with new investment."

A qualifying company would be required to invest a minimum of $1 million in land, building, improvements, or machinery and equipment in the "retooling" or modernization of the plant. The amount of incentives would be "directly related to benefits caused by retention of jobs and investment and the placing of new investment."

The investment would need to be made within two years of the start date, and the company would have to agree to maintain a set level of payroll and offer basic health insurance to employees within 12 months of the agreement.

Under the legislation, a company that qualifies for the maximum incentive could potentially get half the costs of an expansion or upgrade underwritten by the state.

Companies that qualify would not be eligible for other state incentive programs, such as property tax exemptions.

HB 2373 passed the House, 97-2, and will be transmitted to the Senate.
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