HLS 17RS-2898 ORIGINAL
2017 Regular Session
HOUSE RESOLUTION NO. 132
BY REPRESENTATIVE GLOVER
COMMERCE: Provides for the examination of certain matters relative to the fiduciary
duties of the RACER trust
1 A RESOLUTION
2To create and provide for a subcommittee of the House Committee on Commerce to further
3 examine certain matters relative to the Revitalizing Auto Communities
4 Environmental Response Trust's (hereinafter "RACER Trust") fulfillment of
5 fiduciary duties concerning the former General Motors Shreveport plant (hereinafter
6 "GM-Shreveport plant") and operations.
7 WHEREAS, R.S. 51:921 pertinently provides the following: "It is the policy of the
8state of Louisiana, in furtherance of its responsibility to protect the health, public safety,
9welfare, and future prosperity of the citizens of the state, to fully develop the human,
10economic, and natural resources of the state through a well-informed and business-oriented
11Department of Economic Development"; and
12 WHEREAS, in furtherance of the policy set forth, the Department of Economic
13Development has a "continuing program of commercial and industrial planning, education,
14cooperation and assistance between the State of Louisiana and foreign countries, the federal
15government, other states and state, regional, parish and local public and private agencies and
16individuals"; and
17 WHEREAS, the state has a compelling interest to ensure efficient, honest, and
18accurate policy effecting the promotion and perpetuation of the aforementioned policy of this
19state; and
20 WHEREAS, the state also has an interest in creating policy that safeguards against
21any actions serving to adversely impact or impede economic development in this state; and
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HR NO. 132
1 WHEREAS, after the bankruptcy of General Motors, the United States Bankruptcy
2Court created the RACER Trust and equipped it with approximately five hundred million
3dollars and the appropriate fiduciary obligations and responsibilities to "clean up and
4position for redevelopment the properties and other facilities owned by the former General
5Motors Corporation", and such properties and facilities necessarily include the former
6GM-Shreveport plant; and
7 WHEREAS, during February 2013, the RACER Trust and Elio Motors entered into
8a Purchase and Sale Agreement whereby Elio Motors was expected to acquire from the
9RACER Trust all of the property, both movable and immovable property, relative to the
10former GM-Shreveport plant; however, Elio Motors purchased only the movable property
11and as such, entered into a Security Agreement with the RACER Trust in the amount of
12twenty-three million dollars to acquire the movable property; and
13 WHEREAS, Elio Motors granted the RACER Trust a security interest in its acquired
14movable property and simultaneously borrowed approximately ten million dollars in capital
15for start-up costs; and
16 WHEREAS, the RACER Trust agreed to subordinate its security interest to assist
17Elio Motors in obtaining its additional capital; and
18 WHEREAS, circumstances changed regarding the sale of all of the former
19GM-Shreveport plant to Elio Motors; instead, the immovable property of the plant was
20purchased by the Caddo Parish Industrial Development Board; and
21 WHEREAS, at the request of the Caddo Parish Industrial Development Board, a
22parent company known as Industrial Realty Group, owned by Mr. Stuart Lichter, first
23purchased the immovable property of the former GM-Shreveport plant and immediately
24resold this same property to the Caddo Parish Industrial Development Board; and
25 WHEREAS, the Caddo Parish Industrial Development Board then leased the
26immovable property back to Industrial Realty Group; and
27 WHEREAS, as the lessee and property manager of the former GM-Shreveport plant,
28Industrial Realty Group next subleased a portion of the plant to Elio Motors; and
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HR NO. 132
1 WHEREAS, Elio Motors assumed the plant as a sublessee during the latter part of
22013 and was expected to manufacture automobiles, stimulate economic growth, and create
3approximately one thousand five hundred jobs by the end of 2015; and
4 WHEREAS, since 2013 and currently, Elio Motors is not engaged in automobile
5manufacturing at the former GM-Shreveport plant, and as a result, related economic
6development and stimulated growth in this state have not materialized as projected and
7desired; and
8 WHEREAS, with the present and future state of the former GM-Shreveport plant
9subject to the direction and actions of Industrial Realty Group and Elio Motors, the House
10Committee on Commerce was interested to hear the testimony of certain stakeholders to
11identify and expound upon the circumstances, challenges, and barriers surrounding
12automobile manufacturing and the anticipated accompanying job growth; and
13 WHEREAS, pursuant to House Resolution No. 37 of the 2016 Second Extraordinary
14Session, the House Committee on Commerce met in Shreveport, Louisiana, on October 26,
152016, to do all of the following:
16 (1) Study the state of the automotive manufacturing industry in the state of Louisiana
17since the onset of the most recent worldwide economic turndown that began in 2008.
18 (2) Investigate and report on the activities of the RACER Trust in the state of
19Louisiana.
20 (3) Tour and assess the current condition and circumstances of any Louisiana based
21properties either currently or previously under the control and supervision of the RACER
22Trust in the state of Louisiana.
23 (4) Take testimony from local, regional, and state officials and economic
24development stakeholders regarding barriers and obstacles impacting the ability to
25effectively market facilities either currently or previously under the control of the RACER
26Trust; and
27 WHEREAS, though representatives were present to testify, the representatives were
28not parties to nor directly privy to the process of negotiations between the RACER Trust,
29Industrial Realty Group, the Department of Economic Development, the Caddo Parish
30Commission, and the Caddo Parish Industrial Development Board; and
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HR NO. 132
1 WHEREAS, the RACER Trust's commitment of the former GM-Shreveport plant
2to Industrial Realty Group and Elio Motors is a matter of vital concern regarding the
3economic development in this state, not solely due to the lack of automobile manufacturing
4on behalf of Elio Motors, but because prior to this divestment, the Department of Economic
5Development and the North Louisiana Economic Partnership expressed concern regarding
6the transaction; and
7 WHEREAS, Mr. Stuart Lichter, CEO of Industrial Realty Group, who ultimately
8gained control of the former GM-Shreveport plant, defined and outlined the plant's worth
9and value at an Elio Motors press conference on January 13, 2013; and
10 WHEREAS, despite the value of the assets encompassed within the former
11GM-Shreveport plant, the RACER Trust is believed to have provided the Caddo Parish
12Commission with only the following two options in consideration for the eventual fate of
13the former GM-Shreveport plant:
14 (1) Committal of the former GM-Shreveport plant to Industrial Realty Group.
15 (2) Complete demolition of the plant; and
16 WHEREAS, it is a matter of state interest and concern that the prospect of the former
17GM-Shreveport plant's demise may have actually been a false threat used as a catalyst to
18urge the Caddo Parish Commission and other local and state economic development officials
19to support and commit the former GM-Shreveport plant into the contractual care of
20Industrial Realty Group and Elio Motors; and
21 WHEREAS, it is appropriate that the subcommittee examine any potential breach of
22fiduciary duties or obligations which may have resulted in this state's lost opportunities for
23substantial economic development; and
24 WHEREAS, the assets of the former GM-Shreveport plant possess great potential
25to be a source of real opportunity for economic growth and job creation in Louisiana, but
26although publicly owned, no provisions or mechanisms for local oversight are in place to
27rectify this agreement made in furtherance of the state's economic development that has not
28materialized to provide an economic benefit to this state; and
29 WHEREAS, in light of the dire circumstances surrounding the former
30GM-Shreveport plant, the state is compelled to examine the process of negotiations which
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HR NO. 132
1resulted in Industrial Realty Group's and Elio Motors' attainment of the former
2GM-Shreveport plant, per the recommendation of the RACER Trust; and
3 WHEREAS, contingent upon the findings of the subcommittee, the Legislature of
4Louisiana and the Department of Economic Development may be equipped with
5indispensable, essential information for the creation of improved policy to better regulate
6and safeguard with respect to negotiations expected to further the state's policy of protecting
7the welfare and future prosperity of its citizens; and
8 WHEREAS, House Rule 14.51 pertinently states the following: "Each standing
9committee...each joint committee...and any subcommittee of such standing or joint
10committee is hereby specifically and expressly granted the power and authority to hold
11hearings, subpoena witnesses, administer oaths, require the production of books and records,
12and to do all other things necessary to accomplish the purposes of the study or investigation
13assigned to it by the House or by the legislature or by a majority of the members of the
14committee."
15 THEREFORE, BE IT RESOLVED that the House of Representatives of the
16Legislature of Louisiana does hereby create a subcommittee of the House Committee on
17Commerce to further investigate and examine certain matters relative to the RACER Trust's
18fulfillment of fiduciary duties concerning the former GM-Shreveport plant and operations.
19 BE IT FURTHER RESOLVED that the chairman of the House Committee on
20Commerce shall appoint the members of the subcommittee and designate the chairman and
21vice chairman of the subcommittee.
22 BE IT FURTHER RESOLVED that the subcommittee shall be responsible for
23examining all matters relating to the RACER Trust's fulfillment of fiduciary duties and any
24related issues that the subcommittee deems appropriate and necessary to discharge its duties
25and responsibilities.
26 BE IT FURTHER RESOLVED that the subcommittee shall conduct such
27investigations as it finds necessary or appropriate to carry out its purposes; for the purposes
28of conducting such studies, the subcommittee may call upon the staffs of any department,
29agency, or official of the state for data and assistance; all such departments, agencies, and
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HR NO. 132
1officials shall cooperate with the subcommittee; and the subcommittee may request and
2utilize the assistance of any and all public and private sources.
3 BE IT FURTHER RESOLVED that the subcommittee shall make a report of its
4findings and recommendations, including proposed legislation, to the House Committee on
5Commerce no later than thirty days prior to the convening of the 2018 Regular Session.
6 BE IT FURTHER RESOLVED that the subcommittee shall be dissolved upon the
7adjournment sine die of the 2018 Regular Session of the Legislature of Louisiana.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HR 132 Original 2017 Regular Session Glover
Creates and provides for a subcommittee of the House Committee on Commerce to further
examine certain matters relative to the RACER Trust's fulfillment of fiduciary duties
concerning the former GM-Shreveport plant and operations.
Requires the subcommittee to make a report of its findings and recommendations, including
proposed legislation, to the committee no later than 30 days prior to the 2018 R.S.
Provides that the subcommittee is dissolved upon the adjournment sine die of the 2018 R.S.
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