Gov't

From the Desk of Clif Richardson

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Submitted by Representative Clif Richardson's Office

As the House looks toward the final days of this session, it took time last week to focus on the Deepwater Horizon oil spill disaster.

State and local officials and a representative of British Petroleum (BP) briefed a joint session of the House and Senate. Officials apprised legislators and the public in concrete terms of how the spill has affected and will continue to affect Louisiana's coastal regions and the entire state. Local officials voiced their concerns over the six-month drilling moratorium imposed by the federal government and the devastating impact it will have on the state's economy, especially in the coastal areas. Robert Fryar of BP reiterated the company's commitment to the state and to honoring all legitimate claims.

Speakers included Attorney General Buddy Caldwell; Secretary Robert Barham of the Department of Wildlife and Fisheries; Adjutant General Bennett Landreneau of the Louisiana National Guard; and the governor's special advisor on coastal activities, Garret Graves. Other officials, including parish presidents and mayors whose areas have been affected by the spill, followed Mr. Fryar.

Later in the week, state economists told members of the Revenue Estimating Conference (REC) that the projected state budget deficit for the current year may be worse than they earlier thought. Their new prediction is for an additional $260 million to $270 million shortfall, bringing this year's total deficit to about $580 million.

Speaker Jim Tucker would not vote to recognize the additional deficit, saying he would rather wait until the fall when more definitive data is available before again revising estimates. When asked by Tucker, the economists said they weren't completely comfortable with the numbers they were presenting. If the numbers are correct, it would mean a total drop in state general fund dollars of $786 million since December. The economists explained that part of the additional shortfall comes from lower than predicted income tax collections. This drop is attributed to tax cuts and the recession.

At his weekly session briefing following the REC meeting, the Speaker said the size and scope of government must be reduced and it cannot be done in the few days left in this session. He suggests not recognizing the money from last year's tax amnesty program until there are more exact numbers on the deficit, sometime this fall.

Tucker suggests that the amnesty money ($244 million), plus $154 million in cost reports money could be used to repay any money taken from the Budget Stabilization Fund , better known as the "Rainy Day Fund," and the possible end-of-year deficit for 2009-2010. Cost reports are simply invoices to the federal government for Medicare/ Medicaid expenses.

DHH has been withholding these Medicaid cost report settlements totaling $244.5 million in order to accumulate savings that they could use as a possible way to help settle a disallowance dispute with the federal government. This dispute arose from payments made to LSU between 1996 and 2007 that the federal government would not cover as allowable costs under the Medicare/Medicaid programs. DHH expects these payments to be due in Fiscal Year 11 and Fiscal Year 12. Tucker also suggests restructuring the Budget Stabilization repayment mechanism.

Currently, the state Constitution requires that money taken out of the fund must be repaid the next year. He pointed out that the state has a three-year problem: a projected $1.3 billion shortfall for the coming fiscal year and $1.4 billion for fiscal year 2011-2012. His plan calls for repaying any money taken out in years three through five in equal payments of one-third each year. He said he plans to discuss his plan with the Senate and the administration.

A House committee amended and approved legislation this week which would allow the state attorney general to enter into contingency contracts with private attorneys to handle the state's lawsuits in the Deepwater Horizon oil rig disaster. As originally drafted, the legislation, Senate Bill 731, would have allowed this arrangement for all state lawsuits, not just the Deepwater Horizon disaster.

The House committee also adopted an amendment lowering the amount of contingent fees to not exceed the lesser of 10 percent of the net recovery or $50 million, exclusive of reasonable costs and expenses, irrespective of the number of legal proceedings filed or the number of private attorneys or law firms retained to achieve the recovery. The attorneys would be required to provide the number of hours it works on the matter, expenses incurred, the aggregate fee amount, including a breakdown of the hourly rate, based on hours worked divided by the recovery, less expenses. If the disclosure statement shows an hourly rate in excess of $1,000, the fee shall be reduced to an amount equal to $1,000 per hour.

The contingency arrangement is being considered due to the estimated legal costs that could be incurred by the state. Attorney General Buddy Caldwell estimates that the costs associated with these lawsuits could be as much as $100 million. Contingency fees give lawyers a percentage of the awards ordered by a court in lieu of hourly billing. The committee also limited contingency contracts stating that they cannot apply to any claims for natural resource damages pursuant to the federal Oil Pollution Act.

Other changes call for giving preference to Louisiana law firms and would ban elected officials, immediate family members or legal entity in which either has a five percent or greater interest from participating.

The bill now moves to the House floor for further debate. With the changes made by the committee, it is almost certain the final version of the bill, if it passes the House floor, will be decided by a conference committee.

Several members of the legislature have introduced a slate of10 concurrent resolutions, which if adopted, will file applications requiring Congress to call a constitutional convention for the purpose of proposing amendments to the United States Constitution. The resolutions, which the author refers to as the "Liberty Bill," call for fiscal restraint and limited government on the federal level.

Thirty-four state legislatures must pass similar resolutions in order for a convention to be called. Congress has the sole authority to select which method, as set forth in the Constitution, must be used by the states, approval by three-fourths of the state legislatures or approval by three-fourths of the states by convention.

* House Concurrent Resolution 68 calls for a balanced federal budget.

* House Concurrent Resolution 65 requires reduction of the federal debt through annual appropriations.

* House Concurrent Resolution 63 requires term limits for members of Congress.

* House Concurrent Resolution 66 calls for an overall spending limitation on the federal budget.

* House Concurrent Resolution 57 proposes a presidential line-item veto for appropriations bills.

* House Concurrent Resolution 62 would require a supermajority vote to levy or increase a tax or repeal an existing tax exemption.

* The remaining concurrent resolutions that make up the "Liberty Bill" are HCR 59, HCR 64,

HCR 67, and HCR 69. The resolutions have passed the House and await consideration by the Senate. For more information about the Liberty Bill, please visit www.rebirthoffreedom.com .

1 Comment

  1. cmay09

    June 22, 2010 at 5:44 pm

    The Liberty Bill sounds great, and I would love to see it reach the three-fourths majority to force the Constitutional Convention! I say this because I wonder if the corrupt government we have in Washington today would actually follow a law laid out by our founding fathers!
    I have been working for the state for two years now, and I am really glad that the Judge that reviewed the moratorium on offshore drilling negated it. While lifting the ban on deep water drilling in the Gulf does not protect from further POTENTIAL problems, it does protect the state from more revenue shortfalls. Anyway, the state of Louisiana was more than willing to let offshore drilling occur in 500 foot deep water, it was the federal government that wanted that well at 5,000 feet. This is a slap in the face to the sovereignty of our state, as we should have been allowed to say where the well was drilled off of OUR coast. If we would have had the final word, the leak probably would have been contained already. From what I understand, this is one of the deepest wells here, but Russia has one that is approximately 43,000 feet deep on LAND (ours is 32,000 feet + the 5,000 underwater). When we drill that deep, we run the risk of catching oil that is super pressurized by lava that runs at those depths, the deepwater horizon was one such well. Google Lindsay Williams oil spill for this information. This is a very deep subject (no pun intended) that will effect us all.

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