Sun doesn’t shine in Ga Senate

GEFA loan bill sneaks out of Senate committee
by Tom Crawford on 2/16/2010

Gov. Sonny Perdue’s aides are taking a back-door approach to getting legislative approval of his proposal to raise cash for the budget by selling off loans made by the Georgia Environmental Facilities Authority (GEFA).

Language that would authorize GEFA to turn over its loan proceeds to the state treasury was quietly added to a House bill (HB 244) that was originally introduced last year to make a routine change to the authority’s name.

The amended bill was brought before the Senate Special Judiciary Committee on Monday, where members voted unanimously to pass the measure.

GEFA Director Phil Foil, who presented the bill to the committee, did not tell the senators that the loan amendment had been added to the measure. Sen. John Wiles (R-Marietta), the committee chairman, also did not mention the new language that had been added to the bill.

In some cases, senators did not realize what they were voting on.

Sen. Earl “Buddy” Carter (R-Savannah) was asked by a reporter on Tuesday if he was aware that he had voted to pass out a bill that authorized the GEFA transactions.

“No, I thought it was just a name change,” Carter said. “I just wasn’t aware of it.”

“The bill was presented to the committee,” Wiles said. “Ample opportunity was given to the members to ask questions. I called for the vote and the bill was affirmatively voted out of committee.”

When asked why no one bothered to mention that the bill had been substantively amended so that GEFA funds would be turned over to the state treasury, Wiles said, “you’ll have to ask the presenter (Foil).”

Wiles added: “I believe in a full, open discussion.”

Foil said that after he talked about the bill’s provision to change the name of the agency, he was asked a question by Sen. Ron Ramsey (D-Decatur) about GEFA loans.

“The assumption was that they knew what was in the bill, so I didn’t go back to it,” Foil said.

The GEFA proposal is an important part of the budget discussion at a time when the governor and the Legislature are trying to make up for large revenue shortfalls.

GEFA makes low-interest loans to city and county governments for the construction of water and sewer facilities. Perdue is proposing that a large portion of GEFA’s loan portfolio be bundled as a security and sold on Wall Street to raise cash – an estimated $288 million – for the state budget.

Local government organizations like GMA and ACCG oppose the Perdue proposal to “monetize” GEFA’s loan proceeds because it would mean there would be less money available for future loans.

In a recent debate sponsored by GMA, several Republican and Democratic candidates for governor opposed the Perdue proposal to sell off the GEFA loan portfolio. GOP candidate Nathan Deal, for example, called it “a dangerous step to take.”

GEFA cannot legally turn over its funds to the state treasury without the passage of legislation authorizing the move. Shortly before HB 244 came up for a Senate committee vote, this sentence regarding GEFA’s powers was added to the bill text: “To transfer to the state any funds of the authority determined by the authority to be in excess of those needed for its corporate purposes.”

GMA and ACCG lobbyists who attended the committee meeting did not find out until after the vote was taken that the amendment had even been added to HB 244.

“We always suspected that any GEFA vehicle out there was susceptible (to being amended),” said Todd Edwards of ACCG. “Quite frankly, I expected a more transparent effort. I’m surprised at the lack of transparency in the process.”

When HB 244 was originally introduced last year by Rep. Jimmy Pruett (R-Eastman), the bill provided only that the name of the Georgia Environment Facilities Authority would be changed slightly to the Georgia Environmental Finance Authority.

Pruett, who is one of Perdue’s House floor leaders, was not at the Senate committee meeting on Monday and he said he did not put the amended language in the bill.

“That is something I am assuming was done on behalf of the governor,” Pruett said. “The governor didn’t ask me to do it but it was requested by Phil Foil. I knew it was going to be put on there, but that’s about the extent of it.”

There was no need for the Senate Special Judiciary Committee to even vote on HB 244. The Senate has already voted this session to adopt a separate piece of legislation that makes the GEFA name change.

This is not the first time that legislation involving Perdue and large amounts of money has been handled through a surreptitious amendment to a bill in a Senate committee.

Five years ago, the House passed a bill making technical changes to the state tax code. When the bill moved to the Senate Finance Committee, it was quietly amended to give Perdue a $100,000 tax exemption on a major property acquisition he had made the year before.

Rep. Larry O’Neal, who was Perdue’s real estate lawyer, brought the bill back to the House for final adoption but did not mention the amendment that gave Perdue the large tax exemption. Perdue later signed the bill into law; the tax exemption did not become generally known to the public until 2006, when Perdue was running for reelection as governor.

© 2010 by The Georgia Report

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