Lobbyists and their clients sometimes write bills and present them to a lawmaker, whose job is to file the bill, presumably after he reads it.
A case in point is the so-called “CAPCO” bill, a complicated measure that nearly passed — on the last day of the 2011 session — and would have given $125 million in tax breaks to a few national investment firms.
Here’s how the capital company, or “CAPCO” bill worked: Instead of paying state taxes on premiums, insurance companies could divert that money into investments in CAPCOs. The CAPCOs, in turn, would invest the money in small businesses and startups, giving a boost to entrepreneurs and creating jobs. The CAPCOs would keep the principal and any profit.
Officials in some states that passed CAPCO laws called it a scam that made millions for the CAPCOs. Others praised it as a way of creating jobs.
CAPCO businesses hired former Georgia Senate leader Pete Robinson, one of the statehouse’s top lobbyists, to sell the idea. Robinson met with Rep. Ben Harbin, R-Evans, a member of the House Insurance Committee, and presented him with a CAPCO bill. All he had to do was make it apply to Georgia and file it, which he did.
It passed the Insurance Committee with little debate and, after some maneuvering by Harbin, went before the full House, where it passed at 10:38 p.m. on the second-to-last night of the 2011 session. All it needed was Senate approval. Despite Robinson’s best efforts, however, it stalled in the Senate on the final day after senators began questioning the CAPCO concept.
Harbin, who said he knew about the CAPCO idea before he filed the bill, acknowledged that if it had passed, it would have helped Robinson’s clients. “But the reason I liked it is it also benefitted us in a down economy by trying to create jobs,” he said.
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