House seals state deal by overriding Stitt's tobacco compact veto

Jul. 31—The Oklahoma House of Representatives voted Monday to override Gov. Kevin Stitt's veto of tobacco compacts with tribal nations and extended the agreements by one year.

House members overrode the veto on SB 26X 72-16 during the special session.

Stitt vetoed the bill in May, claiming it was not in the state's best interest and violated state law, and said the bill amounted "to a circumvention of the executive's authority to negotiate compacts."

The Monday vote was the final hurdle after the Senate overrode the bill July 24, with the agreements now in effect through 2024. In the agreement, the state will receive half of all taxes collected from tobacco sales on tribal land.

Oklahoma began signing compacts with tribal nations in 1992 after the U.S. Supreme Court in 1991 affirmed the state's right to tax non-Natives who purchase tobacco on tribal lands.

The money comes from taxes paid by businesses when tobacco products are purchased from wholesalers. After the wholesalers remit the taxes to the state, the monies are divided among the state and the tribes at a rate negotiated in the compact.

"The state of Oklahoma does not have the ability, absent a compact, to gather taxes from a sovereign nation," said Rep. Jon Echols, R- Oklahoma City, during debate Monday. "There is zero percent chance, absent the federal courts overruling itself, that we would receive any tobacco-based revenue."

Echols said any recourse by the state would have to be against the buyer and not the tribes.

"That is existing standing law," Echols, adding that six compacts have already expired, with the tax revenue being cut off to the state.

Stitt argues language defining "Indian County" needs to be changed in the current compacts following the U.S. Supreme Court's ruling in McGirt v. Oklahoma, which says Congress never "disestablished" the reservation status of the Muscogee (Creek) Nation.

The Oklahoma Court of Criminal Appeals has since applied the ruling to the Choctaw, Cherokee, Chickasaw, Seminole, Quapaw and the Ottawa and Peoria Nations in eastern Oklahoma.

The governor wants to change the language to state the compact would only apply to lands owned by a tribal nation or held in trust by the federal government, or in a restricted title by tribal members and not entire reservation lands.

Stitt believes the language in the current compacts could allow tribes to purchase new stores and sell tobacco across eastern Oklahoma and still be eligible to apply for the 50% split of tax revenue.

The courts have continuously said the McGirt ruling only applies to criminal matters. One case is currently being argued with the state's highest court regarding income tax.

"There is no existential threat to Oklahoma for a one-year extension," Echols said. "It is illogical to believe there will be a new interpretation that hasn't been the way it's been applied for the last three years."

Choctaw Nation Chief Gary Batton said in a statement the Oklahoma Legislature has shown this session it understands the importance of cooperation between the state and tribal nations.

"We thank the Senate and the House for their willingness to collaborate, and for their endurance in correcting Gov. Stitt's errors," Batton said. "We are pleased the one-year extensions of compacts regarding tobacco and motor vehicle tags are now complete, and we look forward to finding long-term, win-win solutions."

Batton joined several other tribal leaders and representatives in the House gallery, with Rep. Ryan Martin Martinez, R-Edmond, saying they are always welcome.

"Thank you for all our tribal leaders being with us today," Martin said from the Speaker's seat. "You are always welcome in this Capitol building."