Wednesday, June 22, 2011
Written by Walter Pierce
Rep. Page Cortez’s House Bill 400 celebrates a basic economic principle — competition — which is exactly why an obscure trade group unleashed a lobbying barrage to kill it.
[6/22 update: Not entirely unexpected, House Bill 400 was killed via Senate procedure Tuesday afternoon.]
You want a primer on how state government works — not how it works ideally, but how it really works? Check out House Bill 400 by Rep. Page Cortez, a Lafayette Republican. The actual bill is but three pages long. That’s blissfully short by legislative standards. But, as I learned, it deals with an incredibly and overly complex topic: contingency liability insurance for companies in the rent-to-own car business.
I’ll get to how Cortez’s bill is a window into the workings at the Capitol in a bit, but first, some background: There are two types of contingency liability-insurance carriers doing business in Louisiana. “Admitted” companies are vetted by the state Department of Insurance and pay into the state’s insurance guaranty fund — a pot of money designed to cover customers of an insurance carrier if it goes belly up and can’t meet its obligations. Admitted carriers do most of the heavy lifting when it comes to insurance in the state, covering the garden-variety stuff like cars and homes.
“Surplus” or “non-admitted” carriers, on the other hand, offer more complex policies and are typically out-of-state and even out-of-country companies, although it should be noted that 70 percent of homeowner policies in the New Orleans area are now with surplus carriers because the admitted carriers won’t take on the hurricane risk and the state-run Citizens Insurance is too expensive. While they’re not required to pay into the insurance guaranty fund, surplus carriers do pay a state sales tax, to which the admitted carriers are not subject. The surplus carriers, however, are beholden to the same state rules and restrictions as the admitted carriers.
As best I can tell, the rent-to-own car business is the only industry in Louisiana required to carry contingency liability insurance purchased from an admitted carrier; surplus carriers are off limits. But here’s the rub: There are only two organizations in the state, think of them as cartels, through which a lease-to-own car company can acquire such a policy. One of them is New Orleans-based South East Auto Dealer Rental Association, hereafter known as SEADRA.
Cortez’s HB 400 opens up the insurance market for rent-to-own car lots to the surplus carriers — a pretty simple proposition we can file under the rubric, “The market is served by competition.” The freshman representative sponsored the legislation at the request of a constituent in Lafayette who owns such an enterprise and who wants more choice in his insurance coverage.
HB 400 sailed through the House in early May on an 83-5 wave, despite an amendment tacked on by New Orleans Democratic Rep. Jeff Arnold as a favor, a source tells me, for a friend — uberlobbyist Randy Haynie, one of only two lobbyists at the time who were in the employ of SEADRA.
The amendment, which the House approved by a thin margin, would have required these surplus insurance carriers to also pay into the insurance guaranty fund, which, coupled with the sales tax they already pay, amounted to a poison pill designed to kill the bill.
It didn’t, and in fact Arnold’s amendment was stripped in a Senate committee.
That’s when SEADRA, in an effort to protect its monopoly, opened up its playbook.
On Friday, June 10, the association hired three more lobbyists to complement the two already on the payroll. The next day, it hired another lobbyist. Then another on Sunday, one more on Monday and, for good measure, another on Tuesday, adding seven lobbyists over four days for a total of nine, each with one mission: kill HB 400. This phalanx of persuaders was commissioned to lobby not only state lawmakers, but Gov. Jindal, too.
The timing wasn’t coincidental: 400 had cleared a Senate committee by this time, stripped of that poison pill, and was ready to move to the full Senate, which it did on Monday of this week.
By press time Monday for this week’s issue the upper chamber had yet to consider Cortez’s bill, which few workaday Louisiana residents have any vested interest in. The bill’s survival will tell us how much stroke lobbyists enjoy at the Legislature. If it gets to Jindal’s desk only to be vetoed, it’s a fair wager that SEADRA will have joined the ranks of the governor’s recent campaign contributors.
OK, so they’re bentgrass, the type used on golf course greens. But grass is grass.
Jefferson Street restaurant and pub debuts during Festival with limited menu.
The Senate Finance Committee approved the bill Wednesday, despite opponents who argued it would shut down the storefront lenders.
A measure to allow the state to implement its own, less stringent plan for limiting carbon dioxide emissions unanimously passed the Senate.
FDA to regulate e-cigarettes, Jodie Foster gets married, Vermont to require labels on genetically-modified food, and more news for today, April 24, 2014.
Thursday's Blogs from the Bog!
A push to expand Louisiana's Medicaid program as allowed under the federal health care has been overwhelmingly rejected by the Senate health committee.
See which events are taking place during INNOV8 Lafayette this Thursday.
It’s on, y’all. Fest fIND, our annual Festival International de Louisiana reader contest, is now accepting photo submissions.
Acadiana's nightlife guide.
Louisiana welfare recipients would be prohibited in state law from spending the federal assistance at lingerie shops, tattoo parlors, nail salons and jewelry stores, under a bill that received the support Wednesday of a House committee.
Senators will consider whether to prohibit private businesses in Louisiana from paying unequal wages to employees of different genders for the same job.
Rep. Joel Robideaux has delayed bill hearings and said unless a compromise can be reached, he won't bring up the legislation this session.
Once again, Lafayette Parish School Board President Hunter Beasley is focused on an issue that has nothing to do with the educational well-being of our public school children.
Fashion and music make great bedfellows
Producers, manufacturers, restaurants and chefs host roundtable and tasting
After exhausting his appeals all the way to the state Supreme Court, the owner of the Tiger Truck Stop in Grosse Tete has no legal remedy left save one: do an end run around the high court via a bill that would grandfather his “right” to keep a 550-pound tiger enclosed in a pin at his roadside business.
Louisiana poet Darrell Bourque has won the 2014 Louisiana Writer Award, given annually to recognize outstanding contributions to Louisiana's literary and intellectual life.
Drivers would have to secure dogs riding in truck beds while on interstate highways, if the Senate agrees to a bill backed by the House.
The easy one-piece way to style
Comfy feet for long days
Newsy bits for the whole fam
Don't forget: our annual Festival International contest begins Thursday! Win. Cool. Stuff.
An effort to prohibit employers from discriminating based on sexual orientation or gender identity was shelved Tuesday for the legislative session.
Louisiana won't lessen its penalties for marijuana possession, keeping laws on the books that allow people to be jailed up to 20 years for repeat offenses of having the drug in hand.
State bar foundation bestows honor on founder and managing partner of NeunerPate
This Wednesday, April 23, marks the first full day of INNOV8 Lafayette.
National awards recognize outstanding achievement in leadership development and leadership programs
A federal court magistrate has issued a seven-page schedule of hearings, conferences and deadlines leading up to January’s trial aimed at determining how much money BP will owe in Clean Water Act fines as a result of its 2010 Gulf of Mexico oil spill.
“This is one of the oldest divides that exists, and that divide is about the haves and the have-nots.”