HLS 17RS-3432 ORIGINAL
2017 Regular Session
HOUSE RESOLUTION NO. 242
BY REPRESENTATIVE GLOVER
CONGRESS: Memorializes the United States Congress to investigate the current condition
of economic development in the state of Louisiana concerning the RACER Trust's
fulfillment of fiduciary obligations regarding the former General Motors Shreveport
plant and operations
1 A RESOLUTION
2To memorialize the United States Congress to take such actions as are necessary to
3 investigate the current condition of economic development in the state of Louisiana
4 concerning the Revitalizing Auto Communities Environmental Response Trust's
5 (hereinafter "RACER Trust") fulfillment of fiduciary duties regarding the former
6 General Motors Shreveport plant (hereinafter "GM-Shreveport plant") and
7 operations.
8 WHEREAS, perpetual declining sales and employment loss led to the 2009
9bankruptcy of the General Motors Corporation, and by 2012, a complete cessation of
10automobile manufacturing at the former GM-Shreveport plant, which for more than thirty
11years was a generator of jobs and economic opportunity in the state of Louisiana; and
12 WHEREAS, the bankruptcy of General Motors was not an ordinary business
13bankruptcy; rather, it was orderly and structured in a way to facilitate General Motors' ability
14to be absolved of certain environmental and tax liabilities; and
15 WHEREAS, this included a cash infusion from the federal government to the benefit
16of General Motors, and General Motors' consideration for the properties left behind to be
17leveraged in the public's general and equitable interests, with such interests defined and
18directed toward the replacement of lost jobs; and
19 WHEREAS, according to a Report to Congressional Committees issued by the
20United States Government Accountability Office, the Department of the Treasury (Treasury)
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HR NO. 242
1"provided unprecedented support to two of the nation's three largest auto manufacturers —
2General Motors and Chrysler — after deteriorating economic conditions resulted in a
3dramatic decline in auto sales and significant financial losses to these companies"; and
4 WHEREAS, "through the Automotive Industry Financing Program (AIFP) under the
5Troubled Asset Relief Program (TARP), Treasury committed $62 billion to help GM and
6Chrysler continue operating while restructuring into more viable companies"; and
7 WHEREAS, the website of the RACER Trust explains that after the bankruptcy of
8General Motors, "the RACER Trust was created in March 2011 by the U.S. Bankruptcy
9Court" and equipped with "nearly $500 million...received at the time of the Trust's
10establishment" to "clean up and position for redevelopment the properties and other facilities
11owned by the former General Motors Corporation"; and
12 WHEREAS, such properties and facilities to be included for clean up and
13revitalization necessarily include the former GM-Shreveport plant; and
14 WHEREAS, during February 2013, the RACER Trust and Elio Motors entered into
15a Purchase and Sale Agreement whereby Elio Motors was expected to acquire from the
16RACER Trust all of the property, both movable and immovable property, relative to the
17former GM-Shreveport plant; however, Elio Motors purchased only the movable property
18and as such, entered into a Security Agreement with the RACER Trust in the amount of
19twenty-three million dollars to acquire the movable property; and
20 WHEREAS, circumstances changed regarding the sale of all of the former
21GM-Shreveport plant to Elio Motors; instead, the immovable property of the plant was
22purchased by the Caddo Parish Industrial Development Board; and
23 WHEREAS, at the request of the Caddo Parish Industrial Development Board, a
24parent company known as Industrial Realty Group first purchased the immovable property
25of the former GM-Shreveport plant and immediately resold this same property to the Caddo
26Parish Industrial Development Board; and
27 WHEREAS, the Caddo Parish Industrial Development Board then leased the
28immovable property back to Industrial Realty Group; and
29 WHEREAS, as the lessee and property manager of the former GM-Shreveport plant,
30Industrial Realty Group next subleased a portion of the plant to Elio Motors; and
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HR NO. 242
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. 242
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, in a letter dated November
514, 2013, the Department of Economic Development and the North Louisiana Economic
6Partnership expressed concern to the RACER Trust regarding the transaction; and
7 WHEREAS, despite the value of the assets encompassed within the former
8GM-Shreveport plant, the RACER Trust is believed to have provided the Caddo Parish
9Commission with only the following two options in consideration for the eventual fate of
10the former GM-Shreveport plant:
11 (1) Committal of the former GM-Shreveport plant to Industrial Realty Group.
12 (2) Complete demolition of the plant; and
13 WHEREAS, it is a matter of state interest and concern that the prospect of the former
14GM-Shreveport plant's demise may have actually been a false threat used as a catalyst to
15urge the Caddo Parish Commission and other local and state economic development officials
16to support and commit the former GM-Shreveport plant into the contractual care of
17Industrial Realty Group and Elio Motors; and
18 WHEREAS, the assets of the former GM-Shreveport plant possess great potential
19to be a source of real opportunity for economic growth and job creation in Louisiana, but
20although publicly owned, no provisions or mechanisms for federal or local oversight are in
21place to rectify this agreement made in furtherance of the state's economic development that
22has not materialized to provide an economic benefit to this state; and
23 WHEREAS, in light of the dire circumstances surrounding the former
24GM-Shreveport plant, the state is compelled, and requests the United States Congress in its
25constitutional power, to investigate the process of negotiations which resulted in Industrial
26Realty Group's and Elio Motors' attainment of the former GM-Shreveport plant, per the
27recommendation of the federally created RACER Trust.
28 THEREFORE, BE IT RESOLVED that the House of Representatives of the
29Legislature of Louisiana does hereby memorialize the United States Congress to take such
30actions as are necessary to investigate the current condition of economic development in the
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HR NO. 242
1state of Louisiana, relative to the RACER Trust's fulfillment of fiduciary duties concerning
2the former GM-Shreveport plant and operations.
3 BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the
4presiding officers of the Senate and the House of Representatives of the Congress of the
5United States of America and to each member of the Louisiana congressional delegation.
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 242 Original 2017 Regular Session Glover
Memorializes the U.S. Congress to investigate the current condition of economic
development in the state of La. concerning the RACER Trust's fulfillment of fiduciary duties
regarding the former GM-Shreveport plant and operations.
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