published Friday, February 24th, 2012

Senate Speaker Ron Ramsey predicts failure of Governor Bill Haslam’s economic incentive bill

NASHVILLE — Senate Speaker Ron Ramsey said Thursday he doesn’t see Gov. Bill Haslam’s economic incentive bill passing the chamber unless the administration agrees to disclose the owners behind companies receiving taxpayer-funded grants.

“I think if you ask for the incentives, the citizens have a right to know who you are,” Ramsey told reporters.

Earlier in the day, Senate Speaker Pro Tempore Bo Watson, R-Hixson, the administration bill’s sponsor, referred the measure back to the Senate Commerce Committee so lawmakers can examine the issue.

“We’re not passing it until that happens,” Ramsey said.

Haslam and Economic Development Commissioner Bill Hagerty are pushing the bill as part of their effort to emphasize outright cash grants instead of tax credits and incentives for job-creating companies.

Part of that would include collecting “due diligence” information the state previously hasn’t sought from companies.

The original bill allowed the state to seek data about business processes, financial statements, budgets, cash-flow reports and corporate structure and ownership. But all would be sealed from public view.

ECD spokesman Clint Brewer said companies “won’t give it to us” unless the information is kept private. But it’s needed to decide wisely whether to grant incentives, he said.

Not agreeing to privacy “is going to hurt jobs in the state of Tennessee,” Brewer warned. “We’re not going to be able to recruit or work expansions as we should.”

Critics say they understand the need to keep most information secret, but they want company owners’ names made public.

Sen. Roy Herron, D-Dresden, said doing otherwise is a recipe for self-dealing and corruption.

“With these companies that are not publicly traded, it could be a senator’s wife, it could be a representative’s son, it could be a commissioner or a governor’s relative or major contributor,” Herron said.

“If a company wants public money they ought to be honest and public about who they are, and if they won’t tell us who they are that tells us we ought not give public funds,” he said.

Brewer countered that Herron, elected in 1986, never criticized the 1988 law that created incentives.

“It seems his complaints ... are based a little bit in politics,” Brewer said.

Haslam is a Republican.

After Herron raised concerns, Republicans joined in and added an amendment that strips the bill of language regarding ownership in due diligence materials the state would seek.

But Herron argues the state could still seek such information and by outlining in the amendment what would be public, the bill “implicitly” guarantees ownership would be kept secret.

Watson said the idea behind the bill was to “create a more transparent process than currently exists. One of the challenges is defining ownership, who the owners are, what that all means, what needs to be disclosed after a grant or an incentive is granted. I think that’s the challenge we’re trying to figure out.”

The bill also was delayed in the House to give members more time with it. Rep. Kevin Brooks, R-Cleveland, the main House sponsor, objected to all the talk about secrecy.

“The cloaking or the secrecy question about the bill is a little bit of a misnomer,” Brooks told reporters. “What they [administration officials] are trying to do is make Tennessee on an even, level playing field to bring more jobs.”

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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