[CPEO-BIF] Gulf Opportunity Zone Bonds

[Lenny Siegel <lsiegel@cpeo.org>]

Press Release
Good Jobs First
April 5, 2006

Gulf Opportunity Zone Bonds


Social Justice Groups Call Gulf Opportunity Zone Bonds a "Golden 
Opportunity" for States to Promote Equity and Accountability in Katrina 
Reconstruction

Washington, DC and Chicago, April 5, 2006 -- The Gulf Coast Commission 
on Reconstruction Equity today called on the state governments of 
Louisiana, Mississippi and Alabama to use the $14 billion Gulf 
Opportunity Zone Bond program to promote equity and accountability in 
Hurricane Katrina reconstruction.

"This $14 billion program is a golden opportunity for the three states 
to make sure that the rebuilding process serves those most in need," 
said Rev. Nelson Johnson, a member of the Commission, board chair of 
Interfaith Worker Justice (IWJ) and Vice President of the Pulpit 
Fellowship of Greensboro, NC. The Commission was created earlier this 
year by IWJ in partnership with Good Jobs First.

Gulf Opportunity Zone bonds (or GO Zone bonds) are low-interest, 
tax-exempt loans that the three states can make to businesses for 
reconstruction projects in designated areas, authorized by the Gulf 
Opportunity Zone Act passed by Congress and signed into law by President 
Bush in December. Under the program, Louisiana can allocate $7.9 billion 
in GO Zone bonds. Mississippi has a quota of $4.8 billion and Alabama 
$2.1 billion. The bonds supplement various business tax breaks in the 
legislation.

"Go Zone bonds are the only part of the law that gives the three 
affected states control over which businesses get reconstruction 
benefits," said Good Jobs First Research Director Philip Mattera, author 
of a report on the bond program released today. In the report, Good Jobs 
First, Interfaith Worker Justice and the Gulf Coast Commission on 
Reconstruction Equity offer a series of policy options for public 
officials in the three states to consider in devising standards for 
allocating the GO Zone bonds, including:

    * Reserve at least half of the GO Zone bond dollars for areas that 
sustained substantial damage from Hurricane Katrina or the subsequent 
flooding.
    * Give priority to proposals from those industries that suffered 
the most physical or economic damage.
    * Cap allocations at $100 million per firm per year.
    * Give special consideration to certified minority-owned and 
women-owned businesses, both those based in the hurricane-affected 
region and those from outside.
    * Deny bond allocations to companies that are already recipients of 
federal contracts worth $10 million or more for Katrina-related work.
    * Give preference to projects that will create the largest number 
of high-quality jobs.
    * Give preference to applicants that commit to paying wages that 
are at least as high as existing market averages and adequate and 
affordable family medical coverage. These provisions can apply both to 
temporary construction jobs and permanent positions at the facility.
    * Require that employers give displaced workers access to decent 
temporary housing.
    * Give preference to projects that commit to hiring a majority of 
workers from those areas most heavily damaged.
    * Disclose GO Zone bond applications immediately on a state website.
    * Hold public hearings on all applications and actively solicit 
public comments.
    * Monitor the performance of GO Zone bond recipients in complying 
with job-creation and other criteria. Promptly publish monitoring 
reports on a state website.
    * Impose financial penalties on companies that fail to live up to 
their obligations on job-creation and other standards.

"Safeguards such as these are the best way to ensure that the GO Zone 
bond program does not suffer the same kinds of performance problems that 
have afflicted may of the federal contracts awarded for Katrina cleanup 
and reconstruction," Rev. Johnson said. "Adopting these policies would, 
instead, go a long way toward guaranteeing that the benefits of the 
bonds accrue to those who need them the most--workers and 
small/medium-sized businesses in the hardest hit areas of the Gulf Coast 
region."

The full text of A Golden Opportunity: Making Gulf Opportunity Zone 
Bonds Work for Those Most in Need is available at 
http://www.goodjobsfirst.org/pdf/gozbondsreport.pdf

--

For the original press release, see
http://www.goodjobsfirst.org/news/article.cfm?id=116

--


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org


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