GHCC LEGISLATIVE UPDATE

	The Georgia Hispanic Chamber of Commerce (GHCC), by and through its lobbyists Blue Ridge Strategies, opposes SB 67. SB 67 is a bill that would eliminate the current practice in Georgia to administer a driver's license examination in multiple languages. To date, the test is administered in another language to those individuals who do not have a written proficiency in English. The bill, if passed, would impede the flow of commerce on a domestic and international level. As such, through its lobbyists, the GHCC will engage in a number of strategies over the next weeks to ensure the bill does not become law.

Transportation

	After at least three years of trying, lawmakers finally reached agreement on a regional sales tax for transportation in HB 277. In the bill, the state is divided into 12 regions, the boundaries of which are defined by the current boundaries of Georgia's Regional Development Centers. Each RDC will have a "roundtable" composed of county commission chairs and mayors from that district. The roundtables will work with Georgia Department of Transportation’s Director of Planning to formulate a project list for that area. When the project list is settled upon, it will be voted on in the general election primary of 2012. The new one percent sales tax applies to groceries, but not to motor fuel, energy used in manufacturing, or commercial airline jet fuel.

	The legislation also contained a provision to rescue the Clayton County transit system C-TRAN. MARTA receives a three-year reprieve from a law that requires 50% of its revenue be spent on capital expansion, freeing up millions for operations during the next three years. MARTA, as well as other transit systems around the state, will be able to use their portion of the new 1% sales tax for maintenance and operations for all new construction.

Senate Passes Legislation Creating 2010 Tax Reform Council

	The Senate passed HB 1405, establishing a Tax Reform Council to study the state’s tax system and provide recommendations to the 2011 legislative session. The Council will be comprised of four economists, Governor Perdue, the chairperson of the Georgia Chamber of Commerce, the chairperson of the National Federation of Independent Businesses, and four individuals to be named by the Lt. Governor and the Speaker of the House. This will be a very important effort and the first comprehensive review of the entire sales and income tax system in many years.

2011 Budget

	Both the House and Senate passed their versions of a balanced budget this week. The budget had to reduce spending and make the necessary cuts to reduce government but still provide basic services to Georgia citizens. The differences in the House and Senate versions are being resolved by a conference committee of three members from each body.

The Budget (and related matters)

	The House and Senate passed bills that were necessary to balance the 2011 budget. The House version of the Budget – HB 1055 was passed by the Senate.

	The House took up the bill again (since it had been changed in the Senate) and added several tax cuts – including the elimination over five years of the state one quarter of a million ad valorem tax as well as adding the hospital bed tax (SB 407).

	The House took up the Budget and passed it after several hours of presentation and debate.

	The Fiscal Year 2011 budget totals $17.8 billion. This is approximately at FY 2005 levels. If adjusted to take into account population growth, the FY 2011 will be near FY 2000 levels. If the budget were adjusted for both population growth and inflation, it would be near mid-1990’s levels. The budget includes many agency program eliminations and consolidations, while many other programs have been significantly downsized

Revenue Collections

	After almost two years of diminishing tax revenues, March showed a 1% net increase. This was the first month of positive revenue collections since November 2008. Although slightly encouraging, it will take many months of positive revenue to recover. Even with positive collections for March, state revenue for FY 2010 is down 11.5% for the fiscal year to date. In short, while economists are optimistic that revenue reports will be positive in the future, Georgia will still likely see only modest 3-4% revenue growth for some time.

Transportation

	The Regional TSPLOST Conference Committee met for a very short time this week and discussed the present situation of the regional TSPLOST legislation. They adjourned without making any decisions on how to proceed. They did agree to meet in the near future and attempt to adopt agreed upon legislative language. That meeting may take place on Monday, April 19.

	With only four days remaining in this year’s legislative session, time is short for supporters of a regional TSPLOST.

Agreement on Sine Die (Adjournment)

	Both the House and the Senate voted on Wednesday for a legislative calendar that will set the following:

	Tuesday, April 20, 2010: Legislative Day 37 Wednesday, April 21, 2010: Legislative Day 38 Tuesday, April 27, 2010: Legislative Day 39 Thursday, April 29, 2010: Legislative Day 40

House and Senate Calendar

	The House and Senate have finished 33 legislative days. The legislature will not be in session the week of April 5th, but will return for the 34th day on April 12th. The last six legislative days have not been scheduled.

Transportation

	A conference committee will be meeting between now and the end of the session with the goal of developing a solution that can be agreed to by both the Governor and the General Assembly. The funding mechanism has been the contended issue.

Crossover Day

	Friday was Day 30 in the Georgia General Assembly, which is also known as Crossover Day. This is the day that a bill must make it through one chamber (House or Senate) to remain alive for the session. A number of bills just made this deadline while others including the Governor’s Transportation funding bill, HB 1218, did not.

No New Taxes – No New Tax Exemptions

	While the legislature seems determined to avoid any tax increases this session, they are equally determined to hold off on any new tax exemptions. Existing tax exemptions will be under scrutiny in the months to come.

	Transportation funding, HB 1218. The Administration’s bill to allow special transportation districts to decide by referendum whether to levy a one cent sales tax to fund transportation projects did not survive the crossover deadline. Instead, a House/Senate conference committee will revive last year’s bills which were left hanging when the 2009 General Assembly adjourned. Sales tax cap on energy used in manufacturing, HB 1008. Along with numerous other tax exemption measures, HB 1008 will remain in a Ways & Means subcommittee. That means that the existing sales tax cap on energy used in manufacturing will expire at the end of this year. Streamlined sales and use tax, HB 1221. This bill provides for collection of sales and use taxes from vendors with no physical presence in Georgia. Participation by vendors is voluntary, but it is estimated this will collect an additional $30 million in taxes that are owed but go unpaid. User fees to the General Fund, HB 1283. This bill provides that “all user fees shall be remitted to the state treasury.” The Georgia Chamber of Commerce is preparing a letter to legislative leaders urging that user fees paid to the Environmental Protection Division not be diverted to other purposes. The bill passed the House Friday New and increased fees, HB 1055. While no new tax appears likely to pass, a number of state fees will be increased. The bill increases fees for many state services like inspections. Many of these fees have not been revised for a long period of time and do not reflect the cost of providing the service. Additionally, standard automobile tag fees will increase from $25 to $35, and will increase numerous agriculture related fees.

Governor’s Proposed Change in Elections

	Governor Perdue's proposed constitutional amendment, SR 1013 to give future governors the power to appoint four constitutional officers was approved by the Senate Government Oversight Committee. Currently, those posts (Labor Commissioner, Insurance Commissioner, Agriculture Commissioner and School Superintendent) are elected by Georgia voters.

	Because the measure is a constitutional amendment, it will require a vote of two-thirds in both chambers. It will then need to be approved by voters in November's general elections.

Tax Reform

	On Thursday, Speaker Ralston and Lt. Governor Cagle unveiled a joint effort to overhaul Georgia's tax system with HB 1405. The bill creates a "Special Council on Tax Reform and Fairness." The intent, according to House Ways and Means Chairman Larry O'Neal, the sponsor of the legislation, is "potentially a total overhaul."

	This is not a typical study committee in that it’s not a resolution, but a bill to create a statutory council and a statutory process for considering its recommendations. This Council would consist of:

	Governor Sonny Perdue Former Governor and former U.S. Senator Zell Miller Four economists, David Sjoquist of Georgia State University, Jeffrey Humphreys of the University of Georgia, Christine Ries of Georgia Tech, and Roger Tutterow of Mercer. Two members appointed by the Lt. Governor and two members appointed by the Speaker of the House. The 2010 chairperson of the Georgia Chamber of Commerce and the 2010 Georgia Chairperson of the National Federation of Independent Business.

	This panel would be charged with making final recommendations by January 10, 2011 to a special joint committee created by HB 1405. Business will have a strong seat at this table via the Georgia Chamber and NFIB.

Lt. Governor Cagle’s Task Force Makes Budget Recommendations

	This week, Lt. Governor Cagle's budget review task force presented approximately 50 ideas that could potentially solve $3.1 billion of the state's budget crisis. The seven-member panel recommended bringing college tuition closer to other institutions around the country; moving to merit-based teacher pay; increasing the amount teacher's contribute to their retirement; reducing the state's real estate holdings; outsourcing services such as janitorial and landscaping; and encouraging public-private partnerships.

Revenues Down

	Two key events in the fiscal condition of Georgia occurred last week. State revenue for February was 9.9% less than a year ago. There had been hope that perhaps it would at least be flat. This is an indicator that the state has not turned the corner on this recession.

	This prompted Governor Perdue to revise down his 2011 budget by another $442 million. Every reduction in the state revenue forecast requires the legislature to examine spending and make adjustments.

Property Taxes

	The most sweeping overhaul of the Georgia property tax system in decades won unanimous (54-0) approval in the Georgia Senate. Senate Majority Leader Chip Rogers' (R-Woodstock) Property Tax Assessment and Appeals reform bill is aimed at ensuring all Georgia properties (residential and commercial) are properly assessed at Fair Market Value and that property owners have guaranteed rights to appeal.

	The overall reform includes more than 50 changes to current state law. Significant taxpayer friendly provisions include:

	Requirement that every property owner receive annual Notice of Assessment, which guarantees right to appeal Every Notice of Assessment must contain estimated property tax Expansion of appeal time-period from 30 to 45 days Alternative streamlined appeal option for commercial property valued in excess of $1,000,000 Automatic taxpayer victory on appeals when government fails to respond within 45 days Requirement that all relevant sales, including distress sales, be included when determining Fair Market Value Requirement that only "current use of property" be used in determining Fair Market Value Taxpayer must be given access to all data used in determining Fair Market Value Sales price establishes Fair Market Value for next tax year

Water

	This week, Rep. Tom McCall (Dist. 30) introduced HB 1301, the River Basin Protection Act, which would establish a system for regulating interbasin water transfers of 100,000 gallons or more. Interbasin transfers have become a controversial issue for Georgia in recent years when the last period of drought prompted Atlanta officials to look for alternative sources of water to supplement its supply.

Legislature Continues to Hold Hearings on the Budget

	In response to the legislature asking for the University System of Georgia (USG) to prepare a list of $300 million in additional cuts, the USG released their own list of budget cutting measures that offered to layoff up to 4,000 employees, cut dozens of programs and departments, and even limit future admissions to universities and colleges. Roughly 2,500 of those employees would be at Georgia State University, Georgia Tech and the University of Georgia. Other cuts proposed include closing roughly half of the county extension offices around the state, and eliminating the state's 4-H program. The USG is facing $265 million in cuts in the FY 2011 Budget put together by Governor Sonny Perdue (the $300 million would be in addition to this amount).

	As soon as the list of cuts became public, emails and phone calls in opposition began to flood into the Capitol.

More Transportation

	This week, the House Special Subcommittee on Transportation Funding met for another round of hearings. Tuesday was a public hearing on Governor Sonny Perdue's HB 1218, and many organizations took the opportunity to comment on the legislation. The Atlanta Regional Commission voiced objections that the state will set the criteria for project selection; and the Association County Commissioners of Georgia voiced strong objections to the state setting regional boundaries outside metro Atlanta, and to the fact that no county would be given the ability to opt-out. Many of the speakers, including the Georgia Municipal Association, voiced objections that the referendum is set for 2012, when 124 local sales taxes will be up for renewal.

	On Thursday, the Special Subcommittee met again to consider a committee substitute for HB 1218, presented by House Transportation Chairman Jay Roberts. The major changes contained within the committee substitute included:

	Changing the period of the tax levy from eight (8) to ten (10) years Inserting a provision that if the Regional Roundtable does not approve the project list, then there will be no vote in that region. This essentially removes the ability of the Director of Planning (at the Department of Transportation) to finalize the project list and call an election without regional buy-in. Changes the fiscal agent for administration of the funds and control of project delivery from the State Road and Tollway Authority to the Georgia Department of Transportation.

The calendar and the coming week

	The General Assembly will go back into session on Monday, March 8th. We expect to see a lot of activity around the Chamber's priority issues of education, transportation, water, taxes and health care in the 20 legislative days remaining this year. It would not be unusual, with many of the budget issues yet unresolved, for another break to work solely on the budget and/or to slow the pace of legislative days used each week.

Legislature Holds Hearings on the Budget

	THE story for last week and the coming week is the state budget. Unprecedented budget shortfalls have forced the legislature to halt the legislative clock to focus entirely on balancing the budget. Joint hearings were held this week by subcommittees from the House and Senate Appropriations Committees regarding the FY 2011 Budget. Department heads and the members of the public gave presentations to each subcommittee.

	Advocates for public safety warned of the dangers of cutting law enforcement budgets; healthcare advocates begged not to see further cuts to Medicaid; and a representative from the Department of Education told lawmakers they may have to consider cutting instructional time and days if they want to make a significant impact on trimming the budget.

	In nearly every hearing, lawmakers asked each department for the number of employees that are close to retirement, hinting at potential early retirement offers as a way to cut the number of state employees. House and Senate Appropriations Committees are weighing the elimination of entire sections and divisions of agencies.

Transportation

	This week, Governor Perdue offered his solution to Georgia's statewide transportation problem, HB1218 in a House Transportation subcommittee hearing. The Governor's office says that the legislation would raise an additional $700 million per year in transportation funding. Those dollars would come in addition to regular program dollars coming from proceeds of the motor fuel tax.

	The legislation divides the state into 12 separate taxing regions called Regional Commissions. Among those 12 taxing regions is the 10-county Atlanta area. Voters within each region would have the opportunity to vote, in 2012, to accept a one-penny sales tax for transportation purposes.

The Political Scene

	Two significant events occurred in state politics. Carol Porter, wife of Representative Dubose Porter and Gubernatorial candidate, declared her candidacy for Lt. Governor on the Democratic ticket. U.S Representative John Linder (R 7th District GA) has decided to not run for re-election after 18 years in the House. We are sure to see a very crowded field show interest in this congressional seat.

2010 Legislative Session Reaches Mid-Point - Then Takes an 18 Day Recess

	The first 20 days of the 2010 legislation are history. To date, over 400 new pieces of legislation have been introduced in the House of Representatives and 145 have been introduced in the Senate. The legislature is now in recess and will not come back into regular session until March 8. During this recess, due to budget constraints, only 4 committees are planning to meet at this time. They are the House Ways and Means Committee (taxes), the House Natural Resources and Environment Committee (water), the House Transportation Committee and the Joint House/Senate Appropriations Committee (budget).

School Board Governance Reform Passes House Rules Committee

	The House Rules Committee unanimously passed out Senate Bill 84 that will improve school board governance and education in Georgia. This means the full House will vote on this legislation on March 8 when they return from their recess. The bill strengthens conflict of interest, ethics and training requirements for school board members and allows the State to intervene when a school system is on the brink of losing accreditation.

Water Legislation Moving In Both House and Senate Committees

	A number of pieces of water legislation have begun to move through both bodies of the legislature. The Senate Natural Resources and Environment Committee approved both the public-private water reservoir legislation (SB 321) and the Governor’s water conservation legislation (SB 370) this week. Both bills must go before the Senate Rules Committee for placement on the Senate floor calendar. The House Natural Resources and Environment Committee is completing their final review of the Governor’s water conservation legislation (HB 1094) which is expected to pass out of committee shortly. It must also go before the House Rules Committee before it can go to the floor for a vote.

Governor's Regional Transportation Sales Tax Legislation Introduced in House

	This week, HB 1218 was introduced in the House and was co-sponsored by the governor’s floor leader, the Speaker of the House, the majority leader and the chairman of the House Transportation Committee. The legislation proposes to accomplish a number of public policies outlined in earlier public statements made by the governor and legislative leadership, as well as make some changes and add some new proposals not previously mentioned.

	As expected and promised, the proposed legislation includes the removal of MARTA’s limitation on the percentage of sales tax collections that can be used for maintenance and operations until December 31, 2012. The bill would also reallocate the 4th penny per dollar currently collected in state motor fuel sales taxes to be used for any transportation purpose. The legislation also calls for the establishment of 12 transportation planning/funding regions throughout Georgia based on the regional commission boundaries, which the governor had previously proposed.

Transportation

	On Thursday, Governor Perdue held a joint press conference with Lieutenant Governor Cagle and Speaker Ralston to announce their agreement for a regional transportation sales tax. The Governor announced that the legislation should be introduced sometime during the week of February 15-19. There were no indications that the legislation would be any different than what the Governor had proposed in late January (12 regions, 2012 vote, GDOT determining the project list, no opt in/out, etc.). While there were no changes proposed by either the Lt. Governor or the Speaker, the State leadership have now all publicly supported a regional sales tax mechanism to fund investments in transportation and promised to pass the legislation during the 2010 legislative session.

	Rep. Ed Setzler (R-Acworth) has introduced legislation calling for an amendment to the Georgia Constitution to allocate the 4th penny of sales and use taxes presently collected on motor fuels to be allocated for “transportation purposes.” Rep. Setzler’s legislation (HB 1143) defines “transportation purposes” to include roads and bridges, freight and passenger rail, airports, public transit, buses, seaports, and all activities and structures useful and incident to providing, operating, and maintaining each purpose.

Education

	The House Education Committee passed the bill that is intended to improve school board governance in Georgia. The legislation was recommended by the Commission for School Board Excellence after the Clayton County School System lost its accreditation last year. The Warren County School System ineast Georgia could potentially lose its accreditation this year over school board governance issues. The bill allows the state to intervene when a school system is in jeopardy of losing its accreditation.

Water

	The Governor's Water Stewardship Act of 2010 was heard this week in subcommittee. The legislation is in response to recommendations made by the Governor’s Water Contingency Task Force. Due to the importance of this legislation, the bill may be taken up by the full Natural Resources Committee next week. The Senate Natural Resources Committee may also take up debate on the legislation next week as well.

Economic Development

	The Jobs, Opportunity and Business Success (JOBS) Act of 2010 passed out of a Ways and Means subcommittee this week. The legislation would suspend business fees charged by the Secretary of State, establish a tax credit for businesses that hire workers who are eligible for unemployment benefits, create an angel investor tax credit, decrease the state capital gains tax on corporations and individuals, and eliminate corporate net worth taxes. The legislation now goes before the whole Ways and Means Committee, which may meet on the legislation next week.