Lawmakers returned today to the Capitol still scratching their heads on what to do about the State's Budget issues, and in particular, how to fund two of the larger components of the Budget: Education and Healthcare.

The House Appropriations Committee's Subcommittees have commenced their work on the Budget's various components. Rep. Mickey Channell (R-Greensboro) held a two-hour meeting this afternoon, delving into the Department of Community Health's Budget with Commissioner Rhonda Medows, M.D. and the Department's attached agencies. See more on this Subcommittee's discussions below.

House

Today, the House heard from one of their own. Rep. Ron Stephens (R-Savannah) and a proponent of Pass the Buck as he took a moment of personal privilege in the Well to speak to HB 39, his Bill proposing to increase the amount of excise tax on cigarettes and smokeless tobacco. Rep. Stephens offered this tax increase as a possible revenue source rather than creation of a new tax such as the provider tax.

In other news, the House Rules are to be changed. Speaker David Ralston (R-Blue Ridge) introduced HR 1168 which would include the abolishment of the "Hawk" system, previously used by Speaker Glenn Richardson to influence legislative outcomes in the committee process, and use of the "structured" designation process in the House Rules Committee as bills are prepared for coming to the Floor. Tomorrow morning, the House Rules Committee will meet for the first time this Session.

New Legislation

HB 962 – Rep. Larry O'Neal (R-Bonaire) authored this Bill amending O.C.G.A. § 48-7-112(b)(2) to address how refund checks relating to income tax payments of employee refunds and credits made to the Department of Revenue are to be issued. Particularly, current law permits the Department the ability to deem refunds as being "abandoned" by the taxpayer if he or she does not claim the check within 90 days after it is has been published that a check is unclaimed. This proposal strips out the current provisions on this abandonment. It still permits that a refund will be deemed to have been made when the commissioner issues a check for the refund payable to the claimant.

HB 971 – Rep. Ellis Black (D-Valdosta) proposed this initiative creating a new Code Section at O.C.G.A. § 48-7-130. It will allow for refund or crediting of de minimis overpayments when an amount is deducted, withheld, or prepaid and credited to a taxpayer against his or her income tax liability for a taxable year and it exceeds that individual's tax liability by $1.00 or less; in that instance, the amount would be credited to future year's income tax liabilities unless the taxpayer requests a refund for that overpaid amount. Additionally, if the taxpayer's tax liability for a taxable year exceeds the amount deducted, withheld, or prepaid and credited to the taxpayer against such liability for the taxable year by $2.00 or less, then in those instances the insufficiency will be waived and that taxpayer would not be liable for the insufficiency. If this initiative passes, it would apply to tax years beginning on or after January 1, 2010.

HB 973 – Rep. Mike Jacobs (R-Atlanta) introduced a change to O.C.G.A. § 15-10-2(5) relating to the jurisdictional limits of civil claims to be filed in magistrate courts. Presently, that claim cannot exceed $15,000.00. His proposal would increase this court's jurisdiction to cases not to exceed $25,000.00.

HB 977 – Rep. Ed Rynders (R-Albany) authored a new Code Section for the "Quality Basic Education Act" in O.C.G.A. § 20-2-212.6 prohibiting the use of State funds to provide a salary increase for the local school superintendent or administrators during a school year in which a local board of education has furloughed teachers, paraprofessionals, cafeteria workers, bus drivers, custodians, support staff, or other non-administrative positions. It would also require any local board of education, which intends to provide a salary "boost" using local money or private donations to a local school superintendent or administrators when that local board is furloughing teachers and others in that system, to provide a 30-day notice of that intention to make such a "boost" with the rationale behind such a salary raise and conduct a public hearing for full discussion and input on the issue. That hearing would have to be advertised for seven days prior to it being held in a local newspaper (such as where other legal announcements are made).

HB 978 – Rep. Tim Bearden (R-Villa Rica) authored amendments to Article 2 of Chapter 14 of Title 40 repealing the requirement to outline the name of the road on applications for the use of speed detection devices where such devices would be used; and it further proposes to repeal the requirement that vehicles using the speed detection devices be visible for a distance of at least 500 feet.

HB 982 – Rep. Larry O'Neal (R-Bonaire) offered new Code Sections for O.C.G.A. § 48-2-55(c)(3) and O.C.G.A. § 48-2-55(g) providing comprehensive provisions relating to garnishment procedures to be used by the Department of Revenue. Specifically, in subsection (c) of this Code Section it proposes a new paragraph (3):

Within at least six months of, and no less than 30 days before, a levy, the commissioner shall provide a balance due notice to the taxpayer by first-class mail addressed to the taxpayer's last known address as shown on the records of the department. The notice shall identify the state tax executions issued against the taxpayer, state the total amount necessary to fully satisfy the tax executions as of the date of the notice, provide the taxpayer an opportunity to pay the total amount due within a certain time period not less than 30 days, and state that the department may levy and seize the taxpayer's property and rights to property if full payment is not received within that time period.

An administrative garnishment procedure is proposed to be established for the Department to collect from a delinquent taxpayer any delinquent taxes, fees, licenses, penalties, interest, or collection costs due the State which is imposed by Title 48 or which the Department is to collect under any other law. There would be some exemptions permitted (those are outlined in O.C.G.A. § 18-4-20 and O.C.G.A. § 18-4-22). The Bill also outlines requirements of the Department including how it must send a summons of administrative garnishment to the garnishee no earlier than 30 days after the delinquent taxpayer has waived or exhausted administrative or judicial remedies regarding the underlying tax assessment. Additional process requirements are outlined in the Bill.

His changes also would permit the Department of Revenue the power to hold hearings relating to administrative garnishments in O.C.G.A. § 50-13-2(1).

HB 983 – Rep. Larry O'Neal (R-Bonaire) also proposed these Title 48 changes, including a new Code Section at O.C.G.A. § 48-7-28.5. It adds some new definitions regarding how income taxes are imposed and computed. It also will disallow expenses paid to captive factoring entities (defined as any related member which buys accounts receivables from persons that are related members and "related member" is defined in O.C.G.A. § 48-7-28.3).

HB 984 – Rep. Larry O'Neal (R-Bonaire) authored this initiative which repeals Article 6 of Chapter 7 of Title 48 and proposes a new Article 6 at O.C.G.A. § 48-7-140 which prohibits the levy or collection of local income taxes. It proposes that this Act will not abate or affect prosecutions, punishments, penalties, administrative proceedings or remedies or civil actions related to violations of law committed prior to the effective date of this proposed Act.

HB 986 – Rep. Larry O'Neal (R-Bonaire) also authored this idea for a new Code Section at O.C.G.A. § 48-2-63 which provide for notification, attachment, and seizure of funds held by financial institutions (money in checking accounts, negotiable order of withdrawal accounts, savings accounts, time deposit accounts, money market mutual fund accounts, or certificate of deposit accounts). The Department of Revenue Commissioner would be permitted to request not more than four times a year, from a financial institution, information on the ownership interest in an account when an obligor is delinquent in the payment of taxes. Additionally, the Bill establishes penalties for a financial institution which is not compliant and it provides an exemption from liability for the "wrongful dishonor or for any other claim relating to the seizure and attachment of an account or other actions taken in compliance with this Code Section."

HB 989 – Rep. Alan Powell (D-Hartwell) proposed this Code Section at O.C.G.A. § 45-18-5.3 pertaining to the State's health insurance plans which authorizes the Board to contract with various municipalities of Georgia for the inclusion of the employees within any health plans established under that part. When the employer contributions are not fully made by a municipality, then the duty falls on the covered officials to make such employer contributions required on their behalf for the operation of such plan(s).

HB 991 – Rep. Wendell Willard (R-Sandy Springs) authored changes in Article 2 of Chapter 8 of Title 48 which comprehensively revise current law regarding the distribution of proceeds and renegotiation of distribution certificate (relating to the joint county and municipal sales and use taxes).

HB 992 – Rep. Rashad Taylor (D-Atlanta) proposed a new Code Section for O.C.G.A. § 48-7-29.18 to provide an exemption from income taxes for expenses related to private security (from a licensed private security business as licensed by Chapter 38 of Title 43) for residential neighborhoods (single-family residences such as a house or condominium). This credit would be limited to $1,200.00 or the taxpayer's income tax liability (whichever is less). Any unused tax credit would not be permitted to be allowed to carry forward to apply to the taxpayer's succeeding years' tax liabilities and it would not be permitted to be allowed to be used against any prior years' tax liabilities.

HB 994 – Rep. Penny Houston (R-Nashville) offered changes to Title 31, which would revise the regulatory authority of the Department of Community Health with respect to various facilities and entities. Under these changes, the Department of Community Health would be required to establish by rule in the "Georgia Administrative Procedures Act," a schedule of fees for licensure activities for institutions and other health care related entities required to be licensed, permitted, registered, or commissioned by the Department. Such schedules would be determined in a manner so as to help defray the costs incurred by the Department, but would not exceed the costs in providing the licensure activities. Proceeds from all fees imposed because of this amendment would be used to support and improve the quality of licensing services provided by the Department.

HB 995 – Rep. Jeff May (R-Monroe) proposed changes to O.C.G.A. § 20-2-168, relating to the minimum school year. This Bill would prohibit school systems from starting before Sept 1, or Labor Day, whichever is earlier, but this change would not apply to those school systems that currently operate on a year-round calendar.

HB 996 – Rep. Jeff May (R-Monroe) also offered changes to O.C.G.A § 48-5-506.1, relating to as valorem taxation of heavy-duty equipment motor vehicles. This would change the partial exemption from ad valorem taxation of heavy-duty equipment motor vehicles to a tax credit. Any cooperative or publicly owned utility would be included in this change. The maximum tax credit would be $100,000.

HR 1168 – Speaker David Ralston (R-Blue Ridge) offered this Resolution, which changes the Rules of the House. The changes are as follows:

1. No person shall be entitled to enter upon the Floor of the House during the period beginning thirty minutes before the House convenes and ending upon adjournment; except staff members of the Office of Legislative Counsel, staff members of the House Budget Office, and such others that the Speaker has issued a pass and those of the House may allow upon recommendation of the Committee on Rules.
2. After devotion, only those members of the news media with proper credentials shall enter upon the Floor of the House of Representatives. No interview shall be conducted on the Floor of the House while the House is in session. Reporters for print media and radio stations and television reporters when no cameraperson is present shall have access to the Floor of the House only to request that a member leave the Floor for an interview. Following the request, reporters must leave the Floor immediately. If there are an excessive number of a photographers or cameramen, the Chair may remove them. The Speaker shall have the right to revoke cards.
3. "Hawks" have been removed.
4. Modified Structured Rule is defined as, germane amendments may be offered after being approved by the Committee on Rules.
5. Structured Rule is defined as no amendments may be offered. There is a strong presumption against Structured Rules.
6. Morning Orders have been given more time; during the first 20 days of Session, members will be given 20 minutes to engage in Morning Orders. Thereafter, there will only be 10 minutes given to Morning Orders.

HR 1177 – Rep. Harry Geisinger (R-Roswell) proposed an Amendment to the Constitution at Article I, Section II, Paragraph VIII which would allow for pari-mutuel wagering on horse racing. Revenues generated from this proposal would be allocated back to the State and then appropriated by law. This Amendment would have to be ratified by the Citizens of Georgia.

SB 325 – Sen. Gloria Butler (D-Stone Mountain) authored this piece of Legislation which would prohibit racial profiling by law enforcement. This change would require law enforcement officers to record the age, gender and race of every individual that they pull over.

SB 326 – Sen. Vincent Fort (D-Atlanta) proposed changes to O.C.G.A. § 26-2-32.1, relating to the standards, labeling and adulteration of food. SB 326 would require any food sales establishment that is open to the general public to make restrooms available to purchasing customers, if there is one available on the premises.

SB 327 – Sen. Steve Thompson (D-Marietta) offered changes to Title 40, banning texting while driving and adding that convictions of such would result in an additional one to two points on a driver's license and a $175 fine. Similar bills have also been dropped in the House by Reps. Allen Peake (R-Macon) and Rep. Amos Amerson (R-Dahlonega).

Committee News

House Appropriations Committee – Department of Community Health Subcommittee

Rep. Mickey Channell (R-Greensboro), this Subcommittee's Chairman, heard from the Department of Community Health and its attached agencies this afternoon. Lawmakers essentially sat tight but asked a few questions of Commissioner Rhonda Medows, M.D. The budget proposal is sobering for FY 2010 Amended. Commissioner Medows talked to the Committee using a power point presentation found on the Department's website. 

Some of the questions on Lawmakers related to how public health departments were funded and in particular how those grants were determined. Lawmakers were also focused on the Department's inherited backlog of death certificates (there were 70,000 of these certificates backlogged when the Department took over Public Health in July 2009). Such backlog could impact the census as well as determining whether individuals really were eligible for Social Security benefits, Medicare, Medicaid, PeachCare or other public benefits. At the moment, there are 60,500 of these records to be entered into the system.

The Trauma Fund was also mentioned. Commissioner Medows indicated that the Super Speeder fines were now being imposed, with those fines being collected.

The State Health Benefit Plan, which covers the teachers and State employees, has undergone many changes. Approximately 34 percent of these individuals are now enrolled in "consumer driven health plans." Commissioner Medows also told the Subcommittee that some of the expenses for this Plan were not anticipated – including seven multi-million dollar claims that were filed. These claims dealt with cancer or cardiac disease issues – including a case of esophageal cancer (which may be caused by smoking). Additionally, in 2009, more than $483 million from the "fund balance" of this Plan was used so that employers would not have to contribute for coverage of their employees. That will now cause the State further problems.

Under Medicaid, Commissioner Medows noted that the Aged, Blind and Disabled program was generating growth of 1.6 percent in 2010; they project growth of 1.4 percent in FY 2011. PeachCare has seen growth of 8 percent in 2010 and that same rate is anticipated in FY 2011. 201,000 children are currently enrolled in PeachCare; in reviewing children for eligibility, the Department has found many children actually qualify for Medicaid.

Rep. Ed Rynders and Rep. Channell asked questions regarding cost settlements to be made by hospitals (for under or over payments). Commissioner Medows indicated that the hospitals had negotiated the timing for those payments of past due amounts.

Joint House and Senate Economic Development Committee

The House and Senate Economic Development Committees heard from experts on our State's economy. One of the crazier notions, or at least to some, was that perhaps Georgia should re-evaluate the "child labor laws" as many families are now depending on their young to help the family out in these tough economic times. An economist, Robert Prechter, who became famous for predicting the economic crash in 2008, also spoke and expressed that he believes that world financial markets will again plummet – perhaps more severely than they did in 1929. As a "free-market" individual, Mr. Prechter has no faith in the economic stimulus ideas; he also does not believe in wage subsidies or raising the minimum wage. He also told the Committee that the State should not extend unemployment benefits, as that should takes money from employers causing them to layoff more workers. Instead, Prechter proposed that perhaps we eliminate minimum wage laws and any medical coverage requirements. Further, perhaps we should eliminate licensure laws and business regulations where possible.

Senate Public Safety and Homeland Security

The Senate Public Safety and Homeland Security Committee passed out a substitute on SR 513 authored by Sen. Mullis (R-Chickamauga). This Resolution would create the Joint Georgia State Fire Services Study Committee. This proposal seeks to combine the State fire services to enhance communications and eliminate confusion.

If you have any questions regarding this Report, please contact Stanley S. Jones, Jr., Helen Sloat, or April Morgan.