Ownership Information Still Sticking Point in ECD Transparency Bill

On February 27, 2012, in News 2012, by Mark Norris

MissouriNewsHorizon February 27, 2012 Tennessee lawmakers spent nearly an hour during a committee budget hearing last week praising the state’s business development agency for refocusing on homegrown companies.   But no one acknowledged the department’s ongoing disagreement with the Legislature: The Department of Economic and Community Development wants to collect the names of owners behind […]

MissouriNewsHorizon
February 27, 2012

Tennessee lawmakers spent nearly an hour during a committee budget hearing last week praising the state’s business development agency for refocusing on homegrown companies.
 
But no one acknowledged the department’s ongoing disagreement with the Legislature: The Department of Economic and Community Development wants to collect the names of owners behind companies applying for millions of dollars in taxpayer-funded business grants — but the agency doesn’t want to share the information with the public.
 
The move is drawing criticism from legislators who say there needs to be less secrecy in government, not more. Supporters of the Haslam administration-backed bill argue all they are trying to do is add more oversight and scrutiny to the state’s system of  handing out subsidies than what has been in place under past administrations — or what’s currently in place in other states.
 
http://www.youtube.com/watch?v=_IlAIXpT9vk
 
In fact, no other state asks for the names of business owners, the department told The Associated Press, but ECD Commissioner Bill Hagerty told lawmakers in a House Finance Committee budget hearing Thursday the state is so far fairing well against its neighbors in attracting business investors.
 
“I think we’re certainly exceeding the pace of states near by us and that we’ll be able to stay ahead of the curve and catch these opportunities as they come,” Hagerty said about attracting business investors.
 
The Haslam administration’s “due diligence” bill in the Legislature, SB2207, should be expanded to reveal the identities of company owners after they’ve won taxpayer-funded business incentives such as FastTrack development dollars, high-ranking GOP legislators like Lt. Gov. Ron Ramsey are suggesting.
 
“If a product makes it to the floor and passes, there will be transparency. I think we’re dedicated to that,” Ramsey told reporters in his Capitol Hill office Thursday. He said there’s agreement among Senate Republican leaders that the commerce committee should “work on this some more because this is not a product that we want to pass in the state Senate.”
 
The state currently doesn’t ask, or officially know, who the businesspeople are behind the companies to which it issues grants.
 
“Presently, we can’t ask companies for these material as they would be subject to the open records laws,” said Clint Brewer, ECD spokesman. “Furthermore, companies will not offer them.”
 
The administration maintains that its purpose is simply to improve the grant-application and subsidy-awards process the Bredesen administration left behind, but without driving away companies that, with strategic taxpayer-financed investment, might bring long-term jobs to Tennessee.
 
Requiring company ownership information became the sticking-point last week when Sen. Roy Herron, D-Dresden, denounced the bill as a vehicle for cronyism. The House’s assistant Republican leader, Kevin Brooks of Cleveland, has argued the “cloaking or the secrecy question about the bill is a little bit of a misnomer.”
 
The bill is sponsored by the GOP’s majority leaders in both chambers — Collierville Sen. Mark Norris and Chattanooga Rep. Gerald McCormick.
 
Lawmakers say they’ve agreed that a bill the General Assembly passes shouldn’t protect company ownership from public view. However, other proposed edits to the legislation range from not collecting ownership information at all to collecting and making public all owners if the company is an LLC, private corporation or general or limited partnership, and all shareholders with more than $10,000 in securities.
 
The bill works in conjunction expanding the FastTrack program to $70 million from a current annual average of $38.5 million in awards.
 
SB2208 would allow FastTrack economic development grants to be used for activities that “include but are not limited to, grants or loans for retrofitting, relocating equipment, purchasing equipment, building repairs and improvements, temporary office space or other temporary equipment related to relocation or expansion.”
 
The full House plans to vote on the bill Thursday, Mar. 1. The Senate sent its version of the bill back to the Commerce, Labor and Agriculture Committee for more work this week.

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