Louisiana Senate Bill SB555

Louisiana 2018 Regular Session

• Introduced: 4/3/18
• Refer: 4/4/18
• Report Pass: 4/9/18
• Engrossed: 4/19/18
• Refer: 4/23/18
• Refer: 4/25/18

Caption

Authorizes the securitization of the economic damage portion of the Deepwater Horizon income stream. (gov sig) (RE INCREASE SG EX See Note)

Impact

The enactment of SB 555 will significantly alter how economic damage settlements related to the Deepwater Horizon oil spill are handled within Louisiana. The bill allows for the issuance of bonds backed by these future revenues, providing immediate fiscal resources while also establishing a structure for the ongoing management of these funds. Importantly, the corporation created by this bill is exempt from state taxes, which may enhance its ability to generate funding and manage its obligations effectively. The collected funds will support essential projects, such as transportation infrastructure, with a specific focus on enhancing economic stability in areas directly affected by the oil spill.

Summary

Senate Bill 555 establishes the Louisiana Economic Financing Corporation as an independent public entity tasked with managing the state's allocation of economic damage revenues resulting from the Deepwater Horizon oil spill. The corporation is empowered to issue bonds to securitize these revenues, while ensuring that the proceeds are deposited into the Deepwater Horizon Economic Damages Collection Fund. This funding mechanism is designed to facilitate financial recovery and support local economic development efforts, particularly in infrastructure projects across the state.

Sentiment

The sentiment surrounding SB 555 appears to be generally supportive among legislators who stress the importance of funding infrastructure and economic recovery post-disaster. Supporters see the bill as a necessary tool for ensuring that the state can leverage settlement funds efficiently to improve public services and economic conditions. However, there are concerns from some stakeholders regarding accountability and the long-term implications of creating a separate financing entity, particularly around transparency and governance related to economic damage revenues.

Contention

Discussions around SB 555 highlighted a few contentious points, particularly regarding the independence and oversight of the Louisiana Economic Financing Corporation. Critics voice concerns that creating an independent body might lead to less control and accountability over the use of public funds. Additionally, the provision that prohibits the corporation from declaring bankruptcy while bonds are outstanding raises questions about financial risk management and the potential pressures it could place on state finances if economic conditions were to worsen.