February 1, 2013

Capitol Partners

Public Affairs & Government Relations

The General Assembly convened five days this week and has now completed nine days of the 40-day session.  The House and Senate passed an adjournment resolution, HR 50, setting the legislative calendar through legislative day 29, which will be on March 5 if they are able to remain on this schedule.  Many House and Senate committees held organization meetings this week.

Three key legislative issues making news headlines this week are the hospital provider fee, the impact of last year’s tax reform bill on vehicle leases and rentals, and Speaker Ralston’s ethics bills.

The hospital provider fee, also referred to as a “bed tax,” moved quickly through the Senate last week and passed the House earlier today. It now goes to the Governor for his signature. This senate bill, SB 24, authorizes the Board of Community Health to renew the fee that is scheduled to expire on June 30 of this year.  The fee is calculated as 1.45% of hospitals’ net revenues, and these fees are used to draw matching federal funds of over $400M for the state’s Medicaid program.  Hospital groups have been supportive of the fee extension because several hospitals in rural areas would have to shut down without the Medicaid payments.   Passage of this bill was vitally important because Governor Deal’s budget depends on these fees and matching federal funds.  It was estimated that there would have been a half billion dollar Medicaid deficit in the budget if SB 24 did not pass.

Beginning on March 1 of this year, all vehicles purchased or leased in the state will fall under new tax rules because of the tax reform legislation that was passed last year.  Among other things, the new rules phase out the annual vehicle ad valorem tax and substitute it with a one-time title tax that is 6.5% of the vehicle’s value. One of the purposes of the tax reform legislation was to capture vehicle sales between individuals, also known as casual sales, because the state was not collecting sales taxes on those transactions. Last year’s legislation accomplished this; however, it also led to unforeseen consequences that would impact consumers who lease vehicles and the companies that finance the leases, as well as rental car companies. For example, consumers who lease a vehicle will now be required to pay the one-time title tax as well as a monthly sales tax.  It was noted that 14% of new car transactions in Georgia are for leases.  Rep. Tom Rice (R-Norcross), Chair of the House Motor Vehicles committee, has introduced a couple of bills to try to ease the problems caused by these unexpected consequences on vehicle leases and on rental car companies.  These bills, HB 66 and HB 80, were heard in a subcommittee on Wednesday and are pending in the House Ways and Means Committee. Any legislation dealing with this issue needs to be passed by both houses and signed by the Governor before March 1 when the tax reform bill from last year takes effect.

Speaker Ralston is the lead sponsor of two ethics bills that were introduced in the House this week, HB 142 and HB 143.  If these bills pass, they would enforce the most extensive restrictions ever imposed on lobbyists. The proposed legislation would not allow lobbyist spending on individual legislators, would prohibit tickets to athletic events or concerts (except for colleges like UGA and Ga. Tech when they invite all legislators), and would prohibit lobbyists from paying for legislators’ recreational activities, like golf. It would also require legislators to report campaign contributions they received between January 1 and the beginning of the legislative session within the first five days of the session. This legislation would affect the state ethics commission by restoring their rule-making authority, and it would lessen their workload because local officials who raise or spend less than $2,500 on their elections would be exempt from filing reports.  Another provision would require more individuals who are advocating positions at the Capitol to register as lobbyists.  Lobbyist registration entails paying a $300 fee and filing required periodic disclosure reports.  These bills have been assigned to a subcommittee of the House Rules committee which held an extensive first hearing yesterday.

Also this week, other items of interest include state sales taxes on on-line purchases, repeal of the penalty on regions that did not pass the T-SPLOST, and legislation approving statewide wiretap warrants.

Another change included in the 2012 tax reform bill was the requirement for on-line retailers to collect sales taxes from Georgia shoppers. However, as reported by the Atlanta Journal-Constitution, Amazon.com is not collecting these taxes. Senate Minority Leader Steve Henson has sponsored a bill, SB 67, which contains specific language mandating on-line retailers to collect these sales taxes and requiring the Dept. of Revenue to provide monthly reports about how much tax is collected on these sales.

There was an incentive for voters to pass the T-SPLOST tax last summer that would have required only 10% local government input for transportation projects in regions that passed the tax, whereas there would be a 30% local government input requirement for transportation projects in regions that did not pass the tax.  Only three of 12 T-SPLOST regions passed the tax.  Sen. John Albers, who represents north Fulton County in a region that did not pass the T-SPLOST, has introduced legislation, SB 73, which would repeal that penalty.

The Ga. Supreme Court recently ruled that wiretap evidence in three drug cases would be suppressed because wiretap orders must be issued by judges who have jurisdiction where the listening posts are sited. In response to that decision, Rep. Rich Golick has sponsored a bill (HB 55) that would allow superior court judges to issue statewide wiretap warrants.  This bill was favorably reported by the House Judiciary Non-Civil committee, which Rep. Golick chairs, last Friday, and it passed the full House yesterday.

On Monday, February 4, the Senate will reconvene at 1:00, and the House will reconvene at 10:00 a.m.

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