Bill to provide home builder tax credits goes to OK Senate

Journal Record, The (Oklahoma City), Mar 1, 2005 by Janice Francis-Smith

Though the ghost of Great Plains Airlines threatened legislation to provide tax credits for home builders, the measure passed the state House of Representatives on Monday.

House Bill 1534, by Rep. Abe Deutschendorf, D-Lawton, would provide transferable tax credits for builders to make single-family residences in rural areas. The measure passed by a vote of 54-45, despite having three legislators debate against it.

Great Plains Airlines - yeah, that's enough said by itself, said Rep. Jim Newport, R-Ponca City. What was that, nine plus million dollars, plus, plus, plus? It's gone - and the taxpayers lost on that deal.

Tulsa-based Great Plains filed for bankruptcy last year, after receiving $27 million in tax credits from the state. The airline had sold the credits to another company for startup funds.

Newport said he's not opposed to saleable tax credits in general, but he was worried about the provisions of HB 1534. The bill is intended to encourage home builders to make more affordable houses in rural areas.

I'm not particularly comfortable on this one, said Newport.

Deutschendorf said the bill would benefit any number of companies that applied for the tax credits.

Other legislators questioned whether it was appropriate for the state to help a private business make a profit on a venture that otherwise would not be a viable business deal.

It means that a business's relationships in this building are more important than their business plan, said Rep. Mike Wilt, R- Bartlesville.

HB 1534 contains a number of safeguards the Legislature did not apply to the credits extended to Great Plains, said Deutschendorf. A builder would need to show five years of experience and would have to pay the money back to the state. The builder would also be prohibited from using the funds as security for borrowing money from a financial institution.

I tried to think of everything, said Deutschendorf on Monday. We made those cotton-picking mistakes with Great Plains. There is ample reason for people to be concerned. But there was also some philosophical differences of opinion, and I respect that.