The Georgia House has just passed a bill authorizing local development authorities to form public-private partnerships as they see fit and to issue bonds to pay for them, putting we the taxpayers on the hook. If this bill passes, VLCIA could issue bonds for a private prison, a biomass plant, a coal plant (apparently not a coincindence; see below), a toll road, a private railroad, or whatever it felt like. It wouldn’t even need cooperation by elected officials. It wouldn’t have to go to the Lowndes County Commission for permission, like VLCIA did for $15 million in bonds to buy real estate. The Industrial Authority could just issue the bonds itself! And we the taxpayers who would have to pay for it? We’ll just get to pay, that’s all. There’s still time to stop it in the Georgia Senate.

Maybe HB 475 should be called the “Easy Jobs for Cronies Act”. It adds various definitions of public-private partnership, and then throws in a wild card:

“(b) An authority may determine if any project should be exclusively classified under one of the definitions of the term ‘project’ under paragraph (6) of Code Section 36-62-2. An authority may also determine that a project which involves a public body is composed of both public and private components which are integrated so as to produce the desired purposes and will promote and develop some part or all of the public purposes of trade, commerce, industry, and employment opportunities. The authority’s determination or determinations as to such matters shall be final for all purposes of this chapter and not subject to review.

The public and elected officials, who needs them for approval? Judges and courts, who needs them for review?

Approval of spending your tax dollars:

(c) An authority may issue bonds which shall qualify as paying the cost of a project (1) to purchase or acquire a completed project and, if necessary, to carry out any further construction or equipping that it may desire; or (2) to construct, purchase, acquire, or equip a project, for any purpose permitted by this chapter, including, without limitation, for the purpose of the authority’s leasing, selling, or placing under management any such project as provided in Code Section 36-62-7. The provisions of this subsection are a restatement of current law and shall not be construed to restrict the right of a person or entity to lease a project from an authority when such person or entity is the seller or builder of such project or when such bonds are issued to such person or entity.”

There’s been very little about HB 475 in the press.

The Gold Dome Report 2 February 2012 has this:

HB 475 was brought forth by Rep. Jay Powell (R-Camilla) and would be known as the “Development Authorities Law.” The Bill would amend the definition of the term “project” to include facilities owned by a public or private entity or a combination of the two integrated for purposes of trade, commerce, industry, or employment opportunities. Furthermore such term includes highway facilities, surface transportation projects, and projects that are related to transportation. HB 475 received many questions from House members. Rep. Penny Houston (R-Nashville) asked about how the Bill affected the sale of bonds. Rep. Carl Rogers (R-Gainesville) asked a question about the definition of “unfettered authority” which can be found on line 6 of the Bill. After Rep. Powell yielded the Well, Rep. Mark Hatfield (R-Waycross) spent a lengthy amount of time attempting to discourage House members from voting for the Bill. He suggested that HB 475 would enable some businesses to circumvent the review process and avoid paying taxes. Reps. David Knight (R-Griffin) and Larry O’Neal (R-Bonaire) voiced concerns that Rep. Hatfield was having trouble understanding the importance of the legislation. In the end, HB 475 passed with a final vote of 132 to 28.

Enable some businesses to circumvent the review process and avoid paying taxes? What sort of businesses?

Katherine Helms Cummings has an example in Rural and Progressive, 3 February 2012, HB 475 lets the fox run the hen house

Just to give folks a quick perspective on some things that are concerning to some taxpayers in Washington County, GA where I live: my General Assembly Representative in the House, Mack Jackson, who was clearly raised to be polite and considerate, ushered a bill through the General Assembly after Plant Washington ( a proposed $2.1B+ coal fired power plant which lacks a pro forma estimate) was announced. The bill allows for a public facilities authority to issue bonds on projects without taxpayer input at the polls.

That means county bonds could be issued for Plant Washington, as well as other projects, putting all taxpayers on the hook should the bond-funded project go belly up. At that time, and today as well, the Industrial Development Authority is chaired by Hugh Tarbutton, and his nephew Ben Tarbutton III, serves as the Secretary. The Tarbuttons own considerable tracts of land near the Plant Washington site, with, unless things have changed recently, Hugh owning a large chunk of land where the plant would be built.

And it gets even better:

But the 120 rail cars of coal required each day to fire the plant have to get there somehow. Fortunately Washington County has a shortline railroad which is privately held. The President of Sandersville Railroad is Hugh Tarbutton. Ben Tarbutton III is an assistant Vice-President. Other officers include Ben Tarbutton, Jr. as Vice-President, and Charles Tarbutton, assistant Vice-President

Coincidence, right? Maybe, maybe not:

I wondered who in the transportation industry might have supported Mack’s campaigns. In 2008 Ben Tarbutton (no indication of Jr or III) contributed $500.00, Hugh was good for $300, Ben III weighed in at $250.00 and Charles added $250.00 to Mack’s campaign funds. In 2010, during a three day period, Ben Jr, Ben III, and Hugh each contributed $250.00 to Jackson’s campaign coffers. During the session legislators can’t accept campaign donations (although they are free to be entertained by lobbyists) so who knows what the 2012 campaign reports will tell us.

Yes, who knows?

But meanwhile there’s still time to stop HB 475 in the Senate.

-jsq

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