Ed: Evidence demonstrates if not every statement to be false, the message conveyed was a total misrepresentation. Tax credits have continued to be sold at one-half price or $2 for $1. Foxborough twice and Avondale.
Tax credit legislation signed out of committee
May 25, 2006
RON JENKINS, Associated Press Writer
Oklahoma CITY - A bill to block a tax credit scheme that is costing the state tens of millions of dollars was signed out of a joint House-Senate committee late Wednesday.
Senate Majority Leader Ted Fisher earlier expressed frustration about getting Rep. Kevin Calvey, R-Del City, to sign off on the bill so it could be passed ahead of Friday's 5 pm. adjournment deadline.
"We have worked hard to plug the loopholes that were being abused," Fisher said. "We think we in fact have those abuses stopped in this bill and can go forward with investments in a rational manner."
The bill now heads for a vote in the Senate. It will go to the governor if passed by both houses before adjournment of the session, which has been plagued by differences over tax cuts and spending issues that has set up a special session in June.
Calvey said he and other House members signed the bill out late Wednesday afternoon after one area was changed to treat all tax credit programs equally. He said that had been his main concern.
Ed Note: Was this concern, the same concern, as that of Paul Doughty? Paul Doughty is president of Altus Venture, the biggest known abusers of the tax credit. Calvey entertained Doughty's concerns when Doughty and others delievered a large campaign donation for Calvey.
He seemed less enthusiastic than Fisher about the bill. "The Tax Commission says it will solve the problem, which is goal No. 1," he said.
Calvey added that "there may be some legitimate programs that may not be able" to accomplish their intended goals under the new program, "but it's better to err on the side of caution so that's what we're going to do.
Under two tax credit programs passed a few years ago, venture capital investors are supposed to get a 20 percent tax credit for investing in startup businesses in urban areas and a 30 percent credit in rural areas.
Oklahoma Tax Commission officials say the programs cost the state about $2 million a year for the past three years, but that soared to an estimated $66 million for 2005.
They say the increase in the state's tax loss is tied to some venture capitalists finding a loophole that allows huge tax credits to be taken on borrowed or restricted money that is not at risk and does not go toward funding startup businesses.
Gov. Brad Henry has said a complicated "shell game" is being used by some venture capitalists to make massive profits without any risk.
Investors in an Altus aerospace project have been getting a 2-to-1 return on their money, according to the president of the company soliciting investors.
The gist of Fisher's new bill is that it would ensure that money is spent for legitimate business purposes and not made solely for the purpose of getting a tax credit.
It also would ensure that leveraged or borrowed money cannot be used to obtain a tax credit unless the investor has a legal obligation to repay the loans.
It would limit tax credits to 20 percent or 30 percent, the intent of the original legislation.
Calvey, who is running for 5th District Congress, received $21,900 in donations from the Altus group, whose president has publicly supported continuing the program to make sure a project to make flight training planes in Altus gets the funds it needs.
Calvey, chairman of the House Revenue and Taxation Committee, has said the contributions from the Altus group had no effect on his dealing with the corrective tax credit legislation.
Under the current tax credit legislation, wealthy individuals and some corporations can get their taxes wiped away for up to 10 years.
The new legislation states that investors could have their tax liability voided for a maximum of three years.
Calvey said the new bill will require that the venture capital companies involved in a project be identified, but individual investors will continue to have confidentiality