Bill Creates New Applications for BP Money 

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After putting off hearings for the past three weeks, the Appropriations Committee advanced legislation Tuesday to use between $637 million and $1 billion from the state’s oil spill litigation to build up two special funds that have been drained in recent years by the administration and Legislature.

By a vote of 18-1, the committee passed the proposal to deposit portions of the anticipated money into the Budget Stabilization Fund, known more informally as the rainy day fund, and the Medicaid Trust Fund for the Elderly, which provides health care to low-income seniors.

Rep. Cameron Henry, R-Metairie, said the goal of his HB 1241 is to return both funds to their original balances as they stood prior to April 2010, which coincides with the start of BP’s oil spill.

Based on the current balances in the funds today, the bill would direct $356 million to the Budget Stabilization Fund and $281 million to the Medicaid Trust Fund. However, since the latter is expected to be essentially depleted by 2015, the Legislative Fiscal Office estimates that nearly $700 million from the BP litigation may need to be deposited.

Still, it’s unknown exactly how much the economic damages suit against BP would bring in for the state. “I would assume it would be in the billions,” Henry said. “Logically I would think they’re working on some kind of settlement and there’s no (trial) date. So it’s all up in the air.”

Lawmakers have used the Budget Stabilization Fund in recent years to battle the recession and balance budgets, and it must be repaid. The administration, meanwhile, has been taking money out of the Medicaid Trust Fund for basically the same reasons.

Henry added an amendment to his bill that would require the administration to seek a two-thirds vote of the Legislature whenever it wants to withdraw money from the Medicaid Trust Fund in the future.

Rep. Simone Champagne, R-Erath, who cast the only nay vote against the bill, argued that some of the repayments outlined in the bill were for withdrawals that took place prior to the oil spill. And even though there are separate revenue sources dedicated to coastal needs and restoration, she said the economic damages suit should be tied more closely to the coast as well. “I believe protecting the coastline is our number one economic resource in our state and nation,” Champagne said.

Henry agreed, adding, “There were damages away from the coast as well.”

Henry’s legislation now heads to the full House for further consideration.

The House was also scheduled to take up Champagne’s HB 838 Tuesday afternoon. It’s a constitutional amendment that would dedicate most of the fines and penalties related to BP’s oil spill to coastal protection and restoration efforts.

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