Louisiana House Bill HB646

Louisiana 2016 Regular Session

• Introduced: 3/4/16
• Refer: 3/4/16
• Refer: 3/14/16

Caption

(Constitutional Amendment) Establishes the Mineral Revenue Stabilization Trust Fund and provides for dedication of mineral revenues (OR -$317,000,000 GF RV See Note)

Impact

The introduction of HB 646 is expected to significantly alter the landscape of state funding by creating a dedicated revenue stream for infrastructure projects. Specifically, it restricts the use of funds in the Mineral Revenue Stabilization Trust Fund solely to the earnings accrued from invested mineral revenues. This legislative move seeks to prevent the diversion of these funds for other purposes, thereby providing a stable and predictable source of financing for crucial state projects. Moreover, it specifies that appropriations from this new trust can only draw from the annual earnings, thus ensuring the fund remains intact and continues to grow.

Summary

House Bill 646, proposed by Representative Lance Harris, seeks to establish the Mineral Revenue Stabilization Trust Fund in the Louisiana state treasury. This amendment is aimed at ensuring the dedication of mineral revenues for specific public uses, primarily focusing on funding for new highway construction and capital outlay projects. By mandating the deposit of mineral revenues into this trust fund, after allocating a set amount to the state general fund, the bill aims to create a permanent fiscal buffer that would enhance the state's ability to manage its revenue from mineral resources effectively.

Sentiment

The sentiment surrounding HB 646 appears to reflect a predominantly positive view among proponents, who regard the establishment of the Mineral Revenue Stabilization Trust Fund as a prudent step towards enhancing fiscal stability in Louisiana. Supporters advocate that the dedicated funding will allow for sustained investment in infrastructure, thus potentially stimulating economic growth. However, the potential for opposition arises from concerns about how strictly limiting the use of these funds might affect flexibility in state budgeting, particularly in times of fiscal deficits or emergencies.

Contention

Notable points of contention within the discussions surrounding HB 646 center on the implications of creating a dedicated trust fund. Critics argue that tying up mineral revenues in a separate fund may limit the state's ability to address pressing financial needs during economic downturns. They express concerns that while the intent is to ensure better infrastructure financing, this constitutionally mandated dedication could restrict the overall fiscal maneuverability needed to confront unforeseen budgetary challenges. This tension between dedicated funding and fiscal flexibility is a critical aspect of the ongoing discourse on the bill's potential implementation.