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House Democrats Conflicted on ECD Transparency Bill

Most Democrats are concerned with the transparency component of the Haslam-backed measure. But House Democratic Caucus Chairman Mike Turner says a handful are more concerned with whether the business incentive system even needs changing.

Gov. Bill Haslam wants to strengthen the Economic and Community Development department’s ability to scrutinize government grant applicants. But he’s lately run into opposition from critics who said the process isn’t transparent enough.

On the other hand, two ranking House Democrats are uncertain any kind of departure from the status quo is needed.

“I’m having trouble figuring out what they’re trying to accomplish,” Craig Fitzhugh, the House minority leader, said of the administration’s legislative push.

“We’ve been very successful in what we’re doing, and I want us to continue to be even more successful, so it bears another look over,” added Fitzhugh, a lawyer and banker from Ripley. “This is a very, very competitive market for existing and new businesses, so I want to make sure we don’t have some unintended consequences of what they’re trying to do.”

Former Speaker Jimmy Naifeh, of Covington, says he needs to consult with former Gov. Phil Bredesen and his Democratic administration’s ECD commissioner, Matt Kisber, before making up his mind where he stands on the bill.

“I just want to see what they think about it and why this is needed,” Naifeh told TNReport Tuesday.

The Haslam-backed measure, SB2207, was cruising through Statehouse committees with little resistance until earlier this month when on the Senate floor Roy Herron, a Democrat from Dresden, raised questions about the administration’s plan for ECD to start collecting identifying information about the owners of companies. Herron said he was troubled by the proposed legislation’s assurances that such information wouldn’t be made public.

The Senate’s most powerful lawmaker, GOP Lt. Gov. Ron Ramsey, later himself came out in favor of making companies that receive business incentives reveal who their owners are. Since business owners stand to perhaps personally benefit at the taxpayers’ expense, they should be identified to the taxpayers, Senate Republicans and Democrats skeptical of the governor’s “due diligence” plan asserted.

State ECD officials on Monday tried to sell House Democrats on the latest version of the plan, which doesn’t include business ownership information on the list of company information the state can ask from those applying for FastTrack grants, tax incentives and tax credits.

The state doesn’t collect ownership information now, nor did it under Bredesen’s tenure.

House Democratic Caucus Chairman Mike Turner said most Democrats are concerned with the transparency component of the Haslam-backed measure. But Turner said a handful like Fitzhugh and Naifeh are more concerned with whether the business incentive system needs changing.

“It almost makes you wonder what kind of clients they’re going after, what they’ve got in mind to do this kind of thing,” Turner said of the Haslam administration.

Fitzhugh’s position in fact seems to have shifted somewhat from earlier statements he made on the issue. The House Democratic leader told reporters earlier this month he was leaning towards requiring that company ownership information be publicly divulged after a business is awarded a state grant, but that any sensitive proprietary information ECD collects should be kept confidential.

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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