2018 Legislative Report 2

January 18, 2018 GEDA Weekly Policy Update: Week 2   Prepared by:  REMINDER: GEDA Legislative Day is Tuesday, January 23rd, 2018 at the Capitol, South-wing, 2nd floor .  Please invite your legislators to attend!  We will have a meeting with legislative leadership in CAP 216 at 9:00 a.m. We will host a brunch from 10:00 a.m. – 12:00 noon. Weather events impacted state government this week as Governor Deal closed all state agencies except for essential personnel for Wednesday and Thursday.  This week also marked budget week on January 16 -17 and convened for Days 5 and 6 on January 18 and 19. Governor Deal released his budget recommendations to the General Assembly on January 11 for both the amended current and upcoming fiscal years (amended FY18 and FY19).  Brief Budget Primer Each year, the General Assembly authorizes funding for all agencies and programs of state government, and no money can be spent unless authorized by the annual appropriations act.  Georgia's constitution gives the governor the exclusive power to set the revenue estimate for the coming fiscal year, which determines how much money can be spent. Further, the governor has the exclusive power to propose the state budget, designating how much money will be appropriated to each agency. The General Assembly's power over the state budget is limited by the fact that most of the state budget goes to state and federal entitlement and other formula-based programs that must be funded. However, the ultimate power to approve or not approve the state budget rests in the hands of the General Assembly.  Note: Georgia's fiscal year runs from July 1-June 30. Typically, the General Assembly handles 2 budgets each session: (1) the "big" budget for the next fiscal year as well as (2) the "little" budget, or the amended budget for the current fiscal year, to ensure revenues are appropriately accounted for prior to the end of the fiscal year (given that GA has a balanced budget requirement).  Governor Deal's Budget Recommendations -- Amended FY18 and FY19 -- prioritize building an educated workforce capable of meeting future job demands, expanding and improving services for Georgia's most vulnerable citizens, and continuing to invest in transportation infrastructure and economic development. Additionally, his budget request shores up the pension system for Georgia's teachers, provides additional early access to higher education for promising K-12 students, and expands mental health services for children.  Amended FY18 Budget Highlights: $102.1 million for a midterm adjustment for K-12 enrollment growth $10.7 million for growth in the Dual Enrollment program $43.6 million for the Indigent Care Trust Fund and Medicaid $15.1 million for child welfare services to care for children in state custody $2.4 million for autism services for children under 21 $17.6 million for Forestland Protection Act grants $10 million for the OneGeorgia Authority for beach renourishment projects $25.2 million for airport runway extension projects  FY19 Budget Highlights $361.7 million for the Teachers Retirement System $127.6 million for the K-12 enrollment growth, training, and experience $30 million to assist low-wealth school systems $54.3 million for resident instruction at University System institutions $5.9 million for operations for the Georgia Cyber Innovation and Training Center $34.4 million for growth in the Dual Enrollment program $255.9 million for Medicaid to fund growth and offset the loss of federal and other funds $28.8 million for child welfare services to fund out-of-home care growth and foster care per diem increases $5.9 million for autism crisis services for children under 21 $22.9 million to implement recommendations from the Commission on Children's Mental Health $5 million for accountability courts to implement new courts and expand existing courts $31.7 million in new motor fuel funds for transportation $100 million in bond funds to repair and replace bridges throughout the state The General Assembly will use the governor's recommendations as a starting point to develop and pass the state's budget, which the governor will then sign or veto. The governor can also veto line items within the as-passed version.  Floor Leaders Governor Deal announced this week his floor leaders for this session. Floor leaders carry the governor's bills in each chamber.  Rep. Church Efstration (R-Dacula) Rep. Trey Rhodes (R-Greensboro) Rep Terry Rogers (R-Clarkesville) Sen. Brian Strickland (R-McDonough) Sen. P.K. Martin (R-Lawrenceville) Sen. Larry Walker (R-Kathleen) Random Happenings On January 16, a group of pastors and faith-based organizations held a press conference at the Capitol urging the General Assembly to enact and Governor Deal to sign SB233, a bill nearly identical to the federal Religious Freedom Restoration Act. SB233 was introduced last year and is still alive in the Senate. The Metro Atlanta Chamber of Commerce and the Georgia Chamber of Commerce issued a joint statement in opposition to the legislation. Governor Deal vetoed a religious liberty bill in 2016.  Legislative Schedule The House and Senate came to an agreement on an adjournment resolution through legislative day 11.  A subsequent resolution will most likely be considered on January 29 detailing the calendar through day 30. Day 5 – January 18 Day 6 – January 19 Day 7- 10 – January 22 – 25 Day 11 – January 29 Bill Tracking: Note: Bills introduced since our previous report will be noted in italics. HB59 – Historic Tax Credits Bill Sponsor: Rep. Ron Stephens (R-Savannah) Bill Status: Senate Recommitted on 1/8/18 Summary: The bill provides tax credits against state income taxes for the rehabilitation of historic structures, and provides re-approval of additional tax credits for current recipients of credits. The taxpayer will be allowed a tax credit against the tax imposed at such time as the certified rehabilitation is completed. An applicant seeking to claim a tax credit will submit an application to the GA Dept. of Community Affairs for pre-approval. HB69 – Tier Tax Credit Claims Bill Sponsor: Rep. Paulette Rakestraw (R-Hiram) Bill Status: House Second Reader Summary: Beginning on Sept. 1, 2019 and annually for 5 years, the DCA Commissioner will issue a report to the Governor, President of the Senate, and Speaker of the House, including a list of all counties and their tier tax credit classifications, as well as the following information: (A) The total number of employers that claimed a credit under O.C.G.A. 48-7-40; (B) The number of all credits earned and all credits applied during such tax year; and (C) An estimate of the number of jobs and overall economic impact produced by this code section. HB70 – Tier Tax Credit System Bill Sponsor: Rep. Paulette Rakestraw (R-Hiram) Bill Status: House Second Reader Summary: Amend O.C.G.A. 48-7-40 to provide that a county classified as a Tier 4 county wil be reclassified as a Tier 3 if at least 70% of the county’s workforce commutes outside the county for work. Additionally, if 70% of a county’s workforce commutes outside the county for work, Tier 3 counties will be reclassified as Tier 2 counties, and Tier 2 counties shall be reclassified as Tier 1 counties. HB118 – Fantasy Contests Act Bill Sponsor: Rep. Trey Kelley (R-Cedartown) Bill Status: Senate Recommitted on 1/8/18 Summary: Provides for the licensing, registration, regulation, and taxation of fantasy contest operators. The bill creates the Registered Fantasy Contest Operators Act. Fantasy contest operators must register with the Commissioner of the Dept. of Revenue. A fantasy contest operator must pay an annual registration renewal fee and 6% of the fantasy contest operator’s gross fantasy contest revenues for the preceding 12 months. The registration application is exempt from public disclosure unless challenged in the courts. HB158 – Georgia Gaming Commission & Destination Resorts Bill Sponsor: Rep. Ron Stephens (R-Savannah) Bill Status: House Second Readers Summary: To provide for the creation, membership, appointment, and duties of the Georgia Gaming Commission and to authorize the licensing of up to 2 destination resorts in this state. HB205 – Regulation of Exploration & Extraction of Oil and Gas Bill Sponsor: Rep. John Meadows (R-Calhoun) Bill Status: Passed House & Senate; went to conference committee Summary: Provides for regulation of the exploration and extraction of gas and oil; provides the authority to create an Oil and Gas Board; requires development of rules and regulations related to drilling and extraction; amends provisions relating to drilling permits; increases the amount of bond security for drilling operations; provides for the authority of local governments; and to impose a severance tax on the extraction of oil and gas. The bill also defines ‘hydraulic fracturing.’ HB225 – Licensing & Sales Tax Exemption for Ride Share Networks Bill Sponsor: Rep. Jay Powell (R-Camilla) Bill Status: Senate Recommitted 1/8/18 Summary: Repeals an inoperable sales tax exemption related to ride share networks and imposes collection and remittance of sales taxes on certain persons that facilitate or broker and accept or process payment for certain sales. Individuals that utilize ride sharing networks would be required to pay a 4% sales tax for each trip. HB329 – Personal Income Tax Bill Sponsor: Rep. Jay Powell (R-Camilla) Bill Status: Passed House & Senate; went to conference committee Summary: Modifies the rate of tax imposed on the Georgia taxable net income of individuals; provides for an inflationary index rate; adjusts the amounts of the personal exemptions and standard deductions based on the inflationary index rate; and provides for a non-refundable earned income tax credit. The current Georgia taxable net income rate of one to 6% of taxable income would be removed from GA Code and replaced with one rate of 5.4%. *Note: This is a potential vehicle for any additional tax policy this session. HB650 – State Symbols & Monuments Bill Sponsor: Rep. Mary Margaret Oliver (D-Decatur) Bill Status: pre-filed for 2018 session Summary: To allow local governments to relocate, remove, conceal, obscure, or alter certain monuments. HB658 – Excise Tax on Rooms, Lodging, & Accommodations Bill Sponsor: Rep. Earl Ehrhart (R-Powder Springs) Bill Status: pre-filed for 2018 session Summary: To remove the sunset date on the collection of excise tax on rooms, lodging, & accommodations. SB2 – The Fairness, Accountability, Simplification, and Transparency – Empowering Our Small Businesses to Succeed (FAST) Act Bill Sponsor: Sen. Mike Dugan Bill Status: House withdrawn; Recommitted Summary: The bill would require state and local government agencies that issue licenses or permits to establish turnaround times they would have to meet. If they fail to process a license or fee by the deadline, they would have to reduce the processing fee. The bill would also require Georgia’s professional licensing boards to issue provisional licenses for businesses either renewing their licenses or moving to Georgia from out of state. Finally, the bill would establish a system for ranking and comparing state and local agencies’ permitting processes based in part on fees they charge and how long they take to issue licenses or permits. Additionally, the bill makes it easier for the legislature to override state agency rules by requiring simple majorities of the Georgia House of Representatives and Senate rather than 2/3 votes required in current law. SB3 – Creating Opportunities Needed Now to Expand Credentialed Training (CONNECT) Act Bill Sponsor: Sen. Lindsey Tippins Bill Status: Passed House & Senate; went to conference committee Summary: Requires the State Board of Education to prescribe a minimum course of study in career education for students in grades 6-12. The course of study should include career exploration and career-oriented learning experiences that include participation in work-based learning programs like internships, apprenticeships, cooperative education, or employability skill development; and rigorous industry credentialing. SB 6 – Georgia Regional Transit Council Bill Sponsor: Sen. Steve Gooch Bill Status: House withdrawn; recommitted Summary: Creates the Georgia Regional Transit Council that will be attached to the Dept. of Transportation for administrative purposes. The Council is created to develop a state-wide strategic transit plan with the guidance of a recognized industry leader in delivering transit strategy for multijurisdictional entities that emphasizes first-mile and last-mile services, the development of a seamless transportation network with dependable trip times for commuters, the enhancement of limited access highways, road congestion relief, safety enhancements, and plans for a future of transportation innovations. SB79 – Georgia Gaming Commission & Destination Resorts Bill Sponsor: Sen. Brandon Beach Bill Status: Referred to Senate Regulated Industries Committee Summary: To provide for the creation, membership, appointment, and duties of the Georgia Gaming Commission and to authorize the licensing of up to 2 destination resorts in this state. SB191 – Petroleum Pipelines Bill Sponsor: Sen. Rick Jeffares Bill Status: House withdrawn; Recommitted to Natural Resources Committee Summary: Requires that on or after July 1, 2017, any construction of a new petroleum pipeline or an extension in this state requires a permit from the Director of EPD regardless of whether the petroleum pipeline company intends to exercise any power of eminent domain. The Director will conduct hearings to determine whether the location and construction of the portion of the petroleum pipeline for which the permit is sought are consistent with, and not an undue hazard, to the environment and natural resources of this state. SB 328 – Repealing Tax Credits Bill Sponsor: Sen. John Albers (R-Roswell) Bill Status: Senate Hopper Summary: This legislation is a result of Sen. Albers’ study committee examining the current tax credits in Georgia.  This study committee met numerous times in 2017 and issued its final report in December ’17.  The report suggested that the General Assembly repeal three tax credits for Federal Qualified Transportation Fringe benefits, private driver education, and diesel particulate emission reduction technology equipment.  SB 328 aims to repeal all three of these credits.   Revenue related bills have to originate in the House but we anticipate the Senate attaching the repeal of these tax credits to another tax bill.   Glossary of Terms: Effective - The bill has been signed into law by the Governor and will go into effect the date stated. Recommitted -  A parliamentary motion to reassign a bill which has been in one committee to the same or a different committee.  Second Read -  In the House, second reading occurs automatically on the legislative day following the bill's introduction. In the Senate, second reading occurs on the legislative day after a bill is reported from standing committee, except that after the 35th day of the session, second reading occurs on the day a bill is reported from committee. Conference Committee -  A special committee consisting of three members from each house appointed by the presiding officers to seek a compromise when the two houses have passed different versions of the same bill and insist on their respective positions. Pre-filed - A bill that is filed before the beginning of the legislative session Withdrawn - A bill is removed from consideration Referred - Placed into committee To find your law makers click here.  To view the GEDA Public Policy Agenda for 2018 click here.