Senate President Pro Tempore Greg Treat (R-OKC) presents his motion to override the veto on SB 26X regarding state-tobacco compacts Monday, June 26, 2023. (Tres Savage)

After a morning Republican Caucus meeting that included remarks from and questions for Attorney General Gentner Drummond, the Oklahoma State Senate failed its vote to override Gov. Kevin Stitt’s veto on a bill that would have extended state-tribal tobacco compacts by one year.

The Senate’s 31-8 vote — one vote shy of the two-thirds majority constitutionally required — surprised onlookers. The queue was closed after less than two minutes after brief debate from members, including Senate President Pro Tempore Greg Treat (R-OKC), who said lawmakers began considering extension of the compacts in mid-April upon hearing that negotiations between Stitt and tribal leaders had stopped.

“We continue to say: Governor, tribes, work this out. This does not mitigate that fact,” Treat said while debating in favor of the veto override. “Now, this body has the full authority to pull that back in to our abilities to do. We delegated that authority, and we can bring that back in-house if we do not believe the governor is acting in good faith or we do not believe progress is being made next year.”

Following the vote, however, Treat told media that at least four senators who were absent Monday would have been “yes” votes on the SB 26X override and that he plans to hold the vote again sometime in July when he has at least 32 votes in the building.

“We fully believe we will be able to override at some point in July,” Treat said. “We have four, we believe, in the bank. They just weren’t here today for various reasons — a death in the family and other obligations.”

Stitt, meanwhile, celebrated Monday’s vote. On Sunday, his advisors and team members were engaged in communications with senators in an effort to stop the override.

“I am pleased by the Senate’s vote to sustain my veto of the tobacco compact extension and I believe that today’s outcome underscores the state’s commitment to negotiating compacts in good faith, that are beneficial to all parties involved,” Stitt said in a statement. “My original compact offer — to extend the compacts previously negotiated and entered by Oklahoma’s governor and tribal counterparts — is still on the table for each tribe that has reached out and remains available to those that have not yet. I look forward to continuing to work with them to reach an agreement.”

Cherokee Nation Principal Chief Chuck Hoskin also released a statement.

“I’m disappointed that the state Senate fell one vote short of the two-thirds majority to override Governor Stitt’s veto and extend the tribal tobacco compact,” Hoskin said. “With all senators in attendance, we believe there are sufficient votes to override the vetoes on the tobacco and car tag extension bills. Cherokee Nation will continue to advocate for the veto overrides, which will prevent disruption to the economy as we work together for a longer term solution.

“For the good of all Cherokees and Oklahomans, I urge Gov. Stitt to negotiate in good faith for that solution. Cherokee Nation remains open to finding win-win solutions so long as they respect our tribal sovereignty.”

Chickasaw Nation Gov. Bill Anoatubby released a statement as well.

“Compacting has been a productive tool utilized for more than 30 years and has resulted in a stable marketplace and cooperation between the State of Oklahoma and sovereign tribal nations,” Anoatubby said. “We appreciate the leadership of Pro Tem Treat and the members of the Legislature, as they work to provide a temporary extension of the compacts.”

After Treat’s motion to override SB 26X failed, the Senate adjourned special session to the call of its chair, without taking up the possible override of HB 1005X’s extension of motor vehicle compacts with tribes. (To start the day, the Senate did approve HCR 1002 to extend the potential duration of their special session through the end of July.)

Treat: Stitt has made ‘stupid’ decisions on state-tribal compacts

Senate President Pro Tempore Greg Treat (R-OKC) prepares to take questions following the failure of his veto override motion on SB 26X on Monday, June 26, 2023. (Tres Savage)

During his press conference following the failure of his override motion, Treat’s tone underscored his displeasure, and he offered a variety of criticisms about Stitt, with whom he has clashed on questions of law, procedure and decorum before. Asked what might happen if the tobacco compacts between the state and tribes were to expire Dec. 31, Treat called Stitt’s various fights with tribes “nonsensical.”

“If you want to know what really happens, look at what happened when the governor decided that he didn’t want to renew the hunting and fishing (compacts). Tribes are still issuing hunting and fishing (licenses). The state has just lost about $35 million since then,” Treat said. “That was just a stupid decision, because we were getting back — (the Department of) Wildlife (Conservation) is a non-appropriated entity, but they get a ton in federal excise tax when you buy hunting, fishing and camping gear. A portion of that comes back to the state of Oklahoma based on the number of hunters and fishermen we have licensed. So we cut off our nose to spite our face. We didn’t, the governor did.”

As with all major inter-governmental agreements, the state of Oklahoma’s compacts with sovereign tribal nations regarding tobacco excise taxes are complicated. In short, the agreements originated in the immediate aftermath of the 1991 U.S. Supreme Court ruling in Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma, which affirmed states’ rights to tax non-tribal citizens who purchase tobacco on tribal land. Tribal citizens are exempt from taxation on tobacco purchases they make from tribally-owned entities, and the compacts function as a way to estimate and split the excise taxes applied at the wholesale level between the state and tribes.

Over the last 30 years, the revenue splits and other language in the tobacco compacts have changed as compact terms have been negotiated and renewed. The portion of the existing compact most objectionable to Stitt — a definition of applicable “Indian Country” land on which qualifying tribal businesses operation — had lingered innocuously for decades, applying only to historical Indian allotment parcels and land held in trust by the federal government for the benefit of a tribe.

However, Stitt’s administration says the July 2020 SCOTUS decision in McGirt v. Oklahoma — which functionally affirmed that Congress never disestablished the Indian Country reservations of the Muscogee, Cherokee, Chickasaw, Choctaw, Seminole, Quapaw, Ottawa and Peoria nations — means the existing land definition in the tobacco compacts could allow tribes to open or purchase additional gas stations and tobacco-selling stores all across eastern Oklahoma for which they could apply to receive a 50 percent state rebate of all taxes paid on tobacco sales.

In a press conference Friday imploring legislators not to override his vetoes of the compact extensions, Stitt said he has sent one-year tobacco compact extensions to the Chickasaw Nation and Choctaw Nation — and would make the same offer to any other tribe — that includes only one change: the definition of applicable lands.

“The only difference is we’re clarifying it’s only on trust land. It’s that simple. And we cannot allow the definition to be ‘Indian Country’ post-McGirt,” Stitt said. “I mean, I’m a businessman. (…) The first thing I would do (as a tribal leader) is go make an offer and buy OnCue, for example, or buy QuikTrip, or buy this company, or buy these gas stations in eastern Oklahoma. As soon as I closed on that transaction, if I was the tribes, then potentially they’re going to make the argument, ‘Nah, that’s part of the compact,’ where you will have to start wiring (a tax rebate on) every carton of cigarettes made to the tribes in that situation.”

Stitt said he does not “begrudge” tribal leaders for attempting to negotiate the most lucrative compact possible for their nations. However, since taking office in 2019, he has clashed with leaders of the state’s largest tribes over compacts on casino gambling, hunting/fishing licenses and now tobacco taxes and motor vehicle registration.

Even while saying he “would love” to “limit the scope of Indian land” if he could, Treat criticized Stitt’s approach to state-tribal negotiations and other legal issues.

“The land issue was decided in the McGirt case, much to my chagrin. I don’t like the McGirt decision. But the governor can’t simply follow the laws and Supreme Court precedent that he wishes to follow, just like he tried to do [previously on sports betting],” Treat said. “Just like on Gary Cox with the health commissioner. The governor said, ‘Well, yeah, it’s stupid They shouldn’t have to have a master’s degree.’ Maybe I agree with him. But the law said they shall have a master’s, so until we amend that law, the governor is obligated — he’s not above the law, I’m not above the law. Somehow he believes he’s above the law on this.”

Minutes earlier, however, Sen. Nathan Dahm (R-Broken Arrow) had lodged the same argument against Treat and others who sought to extend the compacts against the wishes of the governor.

Citing Title 74, Section 1221, Dahm noted that “the governor is authorized to negotiate” compacts with sovereign tribal nations.

“We are violating existing statute in the manner we are doing this. In order to change the statute, we have to amend the statute. We cannot just ignore the statute that gives the governor this authority,” Dahm said. “We just can’t go in and do this as a legislative body and ignore existing statute. I believe that is illegal. I believe that it is wrong.”

Two senators changed their mind on SB 26X

When the gavel crashed and left the SB 26X motion short by just one vote, two senators who previously voted to pass the bill had voted against overriding Stitt’s veto: Sen. Jack Stewart (R-Yukon) and Sen. Joe Newhouse (R-Tulsa).

Asked why he switched his vote, Stewart said his decision was made “mostly to get [the issue] settled” between the governor and tribal leaders.

“I don’t want to have this keep on extending so we’re at this point next year we’re at the same place that we tried and we need another year,” said Stewart, a freshman lawmaker representing Canadian County.

If legislators could get a complicated education bill passed during this past legislative session in four months, Stewart said he believes the governor still has enough time — six months — to make a deal with the tribes.

“I think that’s an adequate amount of time to see what can happen,” Stewart said. “I’m afraid we will not be any different six months from now or 18 months from now. (…) At the time of the ‘yes’ vote (I made), we had so many questions in debate that day it sounded like a good deal. And I don’t say it’s not a good deal. But the bottom line is everybody wants a reasonable compact that’s fair to both sides. The tribes, everybody admits readily they are good partners in all ways, so this is not really a vote against the tribes. But it’s a vote to get this thing done. And I just don’t see that we’re going to be any different 18 months from now if we don’t put a little more pressure, urgency, whatever, into making it happen.”

Newhouse, a real estate professional in the Tulsa area, said he met with tribal legislative liaisons and had a one-on-one discussion with Stitt in the weeks since the original vote on SB 26X.

“I’ve met with a multitude of advocates and stakeholders who are involved. And really, with such a swirl of information and misinformation, I reasoned that the most prudent decision today was to let the governor’s veto stand and just to encourage all parties to continue negotiating in this case,” Newhouse said. “I really hope that some of the past grievances and missteps can be rectified and people can move forward to help our state and the tribes together. Perhaps that’s a tall order, but I think that’s the best solution for where we stand today.”

Treat, meanwhile, said the failure of his Monday motion — the second time in consecutive years that a significant item he has pushed has failed a vote in the body he leads — would be revisited in July.

“It’s just been really hard to get the votes here. We have the votes. We just don’t have the votes here the same time. I know of at least four ‘yes’ votes who were not here today,” Treat said. “For those of you who nerd-out over procedure, there is no final action on a motion to override. So we fully anticipate we will be able to override in a pretty good margin at some point in July.”

Treat said he motioned for the attempted veto override on SB 26X “to let people’s yeses be a yes and their noes be a no.”

“We had the date set, so we stuck with it,” Treat said.

(Update: This article was updated at 2:20 p.m. Thursday, June 29, to include comment from Gov. Bill Anoatubby.)