14 May 2012

Committee action, May 14: HB 717, SB 273

HB 717 by Rep. Jeff Thompson would redirect a portion on the riverboat taxes collected from the (soon-to-be) six boats to the Independence Bowl Foundation and a number of local economic development and sporting/tourism organizations.

Thompson said to the House Appropriations Committee the substitute bill would do a better job of protecting revenue sources, because the apportionment being shunted to the organizations was to come from the newest arrival. It takes an 8 percent part of the newest’s franchise tax (the total is 22 percent of revenues). It has a 10-year lifespan, and mandates certain minimum infrastructure and job-creating standards to apply only to the new arrival. To prevent cannibalization from the other five, it comes into affect only if the three-year average of all of them is met. The receiving entities also must report on how the money was used and presumably paid off.

A representative of one of the benefitting organizations said a glut of hotel rooms that appeared as gas prices went down could be addressed by having funds to attract sporting events. Rep. Roy Burrell expressed concerned that, even as the new arrival will locate in the district, he felt he had been left out of discussions on the bill and so were other entities that could benefit. Calling her by the wrong name, Burrell asked the representative why certain groups/events didn’t seem to be covered. She said she thought everything that concerned him would be eligible for funding.

Rep. Joe Harrison elicited Thompson to tell him that gaming licenses were to generate mainly for the state, and, he added, for education. He argued that carving out these exceptions for only a few areas detracted from this statewide, educative mission, but only a quarter of these revenues went to it. Thompson argued the bill would not cut into things like teacher pay and that it would generate money for the state. He claimed it would increase revenues for the state and education, with which Harrison disagreed, and added he thought these kinds of things need to support themselves. Thompson said that’s why he had put in the additional requirements. But Harrison said he saw no evidence of a net positive impact on education.

Rep. Pat Smith asked what money directly went to school systems; Thompson said he didn’t know. Smith said there was some, and asked how much would be diverted by the bill; Thompson said none of the existing money would be that only new dollars could be diverted. Smith elicited from him that $300,600 already came from the state, and Thompson said he hoped the bill could stop this pass-through grant.

Rep. James Armes wanted to know what would happen if the money collected did not get spent on these kinds of sporting/tourism activities. Thompson said the purpose of the report was to illuminate those things. He joked about how he wanted Vernon Parish cut in on the action, and Thompson playfully said he could offer an amendment.

But Rep. Bubba Chaney was not when he said he would offer an amendment to take a cut of the proceeds for the Northeast Louisiana Economic Alliance. He said since a number of his regions people came to the boats, this would be beneficial. Harrison objected, saying the pie was being cut too much to follow the spirit of the law to aid education; it was not about economic development. The amendment was adopted 8-6, with plenty of absences.

The bill then was move favorably, and succeeded on a 9-5 vote.

SB 273 by Sen. Barrow Peacock would prevent a utility company from passing on a franchise fee in excess of two percent levied by a local district. He first presented the Senate Revenue and Fiscal Affairs Committee with amendments from Chairman Neil Riser that the Public Service Commission could require that whenever a parish governing authority or municipality imposes a franchise fee, the bill will list that as a line item. The amendments in essence removed the cap on fees.

Sen. Bob Kostelka pointed out some confusing wording, and Peacock averred he did not mind withdrawing and resubmitting the amendments to clear it up, which were adopted without opposition. That done, the formidable list of opponents from utilities and governing authorities evaporated. Thus, it was reported without objection.

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