“Mr. Speaker, I rise this evening to voice my strong opposition to H.R.2398, a bill that would have disastrous consequences for the economy of my district–Las Vegas, Nevada. H.R. 2398, referred to the Ways and Means Committee, is an example of the worst type of  federal government meddling in local matters and senseless over-regulation.  I believe this is an issue of importance to Members of Congress and local governments across the country.

Here’s the situation in a nutshell.  The Las Vegas Convention and Visitors’ Authority needs to expand its convention center to accommodate the growing needs of major trade shows and conventions.  This type of business is the life blood of the economy of my district, and hundreds of thousands of jobs depend on it.  

I know because I worked in the tourism business for many, many years, and I served as a business consultant trying to meet the needs of the convention industry in my hometown.  I know first hand how critically important it is for Las Vegas to expand its convention center, and I know how important these facilities are to dozens of other communities around the nation. 

Just two weeks ago, the Las Vegas Convention and Visitors’ Authority was ready to issue  revenue bonds, exempt from federal taxes.  As you know, local government entities routinely issue tax exempt bonds to meet their building needs. The bond measure would allow my hometown convention center to add enough floor space to meet the needs of the convention business and maintain our reputation as one of the finest convention venues in the world.  The bond measure was the result of responsible local government planning for the future to maintain a strong economy for the benefit of the 1.3 million residents of southern Nevada.

Then something shocking happened, and it happened right here in the House.  From 2500 miles away, one of my district’s most important economic development projects was torpedoed -  only temporarily, I hope. At the last minute, the convention authority was forced to postpone its sale of bonds after H.R. 2398 was introduced by Mr. Tom DeLay on June 30.   

Mr. DeLay’s remarks in the Congressional Record indicate Houston can’t compete with Las Vegas as a convention destination, so why not target Las Vegas with legislation to stop the new convention center? H.R. 2398 bears the obscure, and seemingly harmless title of  “The Private Activity Bond Clarification Act of 1999.”  In reality, this measure would drop a bomb on the proposed Las Vegas convention center expansion, and on any other public building project in the United States that uses similar tax-exempt financing. 

The Las Vegas convention center expansion project is a model of prudent use of public monies and sound planning.  The bonds would be repaid through hotel room tax revenues, revenues that will grow exactly because there will be more convention space, attracting  more visitors to southern Nevada. With a federal tax exemption, the cost of the convention center bonds will  be low, and the convention center will be able to accommodate conventions that otherwise would be turned away. The financing, through tax-exempt bonds, meets every state and federal rule and regulation.

But now, out of the blue, comes H.R. 2398.  This bill seeks to kill the federal tax exemption by changing the IRS codes, even though the current IRS codes set clear qualifications  for projects in order to be tax exempt.  

H.R. 2398 is simply a solution in search of a problem.  It sets out to fix something that ain’t broke.  And in the process, H.R. 2398 could do a whole lot of damage.  H.R. 2398 could drive up the costs of   convention centers and arenas around the country by banning  tax-exempt bonds for these projects.  It promotes the absurd concept that the federal government should tax local government.    

For no good reason, H.R. 2398 gobbles up local dollars by forcing local entities such as the Las Vegas convention and visitors’ authority to borrow money at higher interest rates, because they would no longer qualify for federal tax-exempt status.  This  amounts to an unfunded mandate, and an onerous burden on our cities and towns.  

I say we should be encouraging the economic boost that convention centers bring to a community, not discouraging them. H.R. 2398 is totally out of step with the times.  I know Mr. DeLay must be aware that we are in an era of streamlining the IRS not expanding it. We are in an era of reducing government intrusion on state and local matters, not meddling in them.  

We are in an era that recognizes the value of public-private partnership to stimulate economic growth. And, we are certainly in an era when we are all trying to lower the tax burden, not raise it.   H.R. 2398 is on the wrong side of all these issues, and we must  reject it....for the economic health of our local communities.  The defeat of H.R. 2398 will also defeat  federal government meddling in local affairs and  defeat over-regulation.  And, it will be a victory for common sense.”