The Tennessee House of Representatives unanimously endorsed Gov. Bill Haslam’s plan to dramatically expand economic development grants Wednesday. But lawmakers are still uncertain if and how they’ll publicly identify the owners behind companies taking home those taxpayer dollars.
Department of Economic Development officials and legislative leaders are shy on details about out how they’ll require private businesses seeking state grants to reveal who owns their companies without scaring away organizations looking to open up shop in Tennessee.
“This is necessary information for the ECD to make good decisions, so we need to figure out a way to get this information. That’s why we keep pounding at it,” said the Senate sponsor of the bill, Bo Watson, a Republican from Hixon.
HB2344 would offer businesses grants or loans for expenses like “retrofitting, relocating equipment, purchasing equipment, building repairs and improvements, temporary office space or other temporary equipment related to relocation or expansion.”
All money would be funneled through local governments or their economic development branches to issue to companies. The FastTrack program already offers grants in the form of reimbursements for job training and infrastructure improvement, at a state tax-funded cost of about $38.5 million annually in recent years.
With the expansion, the Haslam administration wants to more thoroughly examine businesses seeking grants by requiring businesses to hand over internal records like cash flow reports and budgets, along with the names of the companies’ owners.
Lawmakers from both parties are OK with shielding most of that information from public view, saying it’s proprietary. Many are arguing, however, that the names of people who own companies accepting state money should be out in the open.
“Taxpayers have a right to know where that money’s being spent. I just think that’s a no-brainer,” said House Democratic Caucus Leader Mike Turner. “It makes you wonder who they’re trying to attract to come in here.”
The measure to add those reporting requirements but keep them private, HB2345, has idled on Capitol Hill since legislative leaders last month said business ownership shouldn’t be kept secret. Lawmakers have since remained silent on the progress of negotiations.
“Commissioner (Bill) Hagerty and the department’s legislative team continue to have productive conversations with leadership about the bill,” ECD spokesman Clint Brewer said in an emailed statement.
The Senate versions of both the expansion to the program and its reporting requirements are in committee.