Electric-car manufacturers would no longer receive taxpayer subsidies from the Oklahoma Quick Action Closing Fund under a bill approved by a Senate committee.

The measure was one of several business-related bills considered by lawmakers this week. Another measure advanced to prevent pandemic closures of businesses unless a direct link to the spread of disease is documented, but another measure to require transparency in the awarding of state incentives ran aground.

Senate Bill 294, by state Sen. Adam Pugh, declares that “establishments engaged in electric automobiles for highway use manufacturing activities” shall “not qualify for any funds from the Oklahoma Quick Action Closing Fund.”

Pugh noted that Oklahoma has pursued “several” electric-vehicle manufacturers or companies making parts for electric cars through the offer of lavish taxpayer subsidies.

“It’s not been a successful strategy for the state of Oklahoma,” Pugh said. “I think a lot of good people have expended a lot of energy pursuing companies that either were using us as leverage or, if it was in the case of some small fish that we’ve reeled in, they were upside down and their financials were not vetted in the first place. I think it’s time that the state makes a pivot.”

Pugh said several of his constituents were sent home without pay over the holidays by one electric-vehicle company, an apparent reference to Canoo, which shuttered its Oklahoma operations.

“This bill is a direct result of constituents that I think were screwed in this process,” Pugh said. “And I’m frustrated, and I’m frustrated with that industry.”

In 2023, Gov. Kevin Stitt and officials with the Oklahoma Department of Commerce announced that Canoo, a start-up electric vehicle manufacturer, had been awarded more than $100 million in state-funded incentives over a 10-year period. The company opened a battery manufacturing plant near Pryor and a vehicle-assembly facility in Oklahoma City.

But by late 2024, the company was furloughing its Oklahoma employees and announced the Oklahoma facilities were being idled.

Pugh said electric-car manufacturers are simply not viable.

“We’ve really had to rely on taxpayer dollars to prop up an industry where the demand’s not there, the capital is insanely expensive,” Pugh said. “The average starting price of those vehicles is 35 percent higher than a combustible engine. The average component is two-and-a-half times more expensive than a component in a combustible-engine vehicle. And financial forecast says that market is going to slow down.”

He noted that Kansas beat Oklahoma in a competition to lure a Panasonic electric-vehicle battery facility. Kansas officials offered as much as $1.3 billion in taxpayer incentives to Panasonic, but Pugh noted, “I’m not even sure it’s ever even going to get off the ground.”

While the Legislature controls how much money is deposited into the Oklahoma Quick Action Closing Fund, the governor is given authority to determine how money from the fund is spent. The cash is typically paid out as incentives to attract companies to Oklahoma.

State Sen. Julia Kirt, D-Oklahoma City, objected to the bill, saying lawmakers should not bar any specific industry from tapping the fund. Instead, she said lawmakers should enact more regulations controlling the use of the fund.

“What I’m seeing here is a knee-jerk reaction to one problem,” Kirt said.

SB 294 passed the Senate Economic Development, Workforce, and Tourism Committee on a 6-3 vote.

Bill Prohibits Forced Closing of Businesses

Another measure to prevent widespread pandemic business closures also passed out of committee.

Senate Bill 672, by state Sen. Julie McIntosh, R-Porter, states that “during a pandemic under a declared state of emergency by the Governor or the President of the United States, the Governor of this state shall not close or force the closing of any business without documented scientific evidence that the nature of a particular business actually contributes to the direct spreading of disease relating to the pandemic.”

“During 2020, mid-2020, around 5,000 small businesses in Oklahoma closed due to the mandates of the pandemic, and according to the National Bureau of Economic Research about 22 percent of small businesses nationwide closed in the first few months of the pandemic,” said McIntosh, R-Porter. “Unemployment rose, tax revenues declined, and suddenly families were robbed of the meaningful effects that work and productivity bring. Mental and monetary strain tore the fabric of many families.”

As a physician, McIntosh was declared “essential,” but she noted the jobs of many of her patients were not.

“We saw mothers and fathers who came in who were robbed of the opportunity to feed their families, to work and pay their rent, and this is detrimental to families, not just monetarily, but to their mental health and other areas,” McIntosh said.

She said businesses should not be forced to close during a pandemic without “documented, scientific evidence” that the nature of a specific business “contributes to the direct spreading of disease.”

State Sen. Regina Goodwin, D-Tulsa, objected, saying businesses needed to be closed to prevent human interaction during COVID.

“It’s not necessarily the building or the business as much as the people that are in the business that would cause the virus to spread person-to-person,” Goodwin said.

But state Sen. Casey Murdock, R-Felt, said the COVID closures had no basis in reality and favor was shown to large companies over small businesses.

“I don’t know what kind of science they use when they let Wal-Mart stay open but small, mom-and-pop businesses had to close,” Murdock said.

SB 672 passed the Senate Public Safety Committee on a 6-2 vote that broke along party lines with Republicans in support and Democrats opposed.

Transparency Measure Fails

Another business measure did not fare as well.

House Bill 1068, by state Rep. Tom Gann, would prohibit state government entities from entering into any agreement with a private-sector entity that “would prohibit the state governmental entity from making disclosure of the terms of any agreement” involving taxpayer incentives or tax credits.

Gann noted that state officials have signed off on multi-million-dollar contracts without knowing the identity of the company receiving state funds.

In 2022, he noted the State Board of Education was asked to approve a $33.6 million contract with an unidentified testing vendor because the state Office of Management and Enterprise Services had signed a non-disclosure agreement with the vendor.

On another occasion, Gann noted lawmakers were asked to approve $700 million in incentive payments for an unnamed company that also had signed a non-disclosure agreement with state officials.

“The taxpayers have a right to know where their money is going,” said Gann, R-Inola. “And that’s what this bill is designed to do.”

The bill failed when no committee member was willing to make a “do pass” motion.

State Rep. Judd Strom, R-Copan, defended the use of secrecy in state negotiations with companies.

“I feel like we would miss out on some wonderful opportunities,” Strom said. “Do you think we should risk these big opportunities and workforce-development opportunities? By limiting this, a company might not come just because of this. They might not put Oklahoma in their pool of states they were picking through.”

Gann disagreed.

“We shouldn’t get into a board meeting where the award is $33.6 million and nobody knows where it’s going,” Gann said.