Georgia Legislative Update

The Georgia General Assembly is set to adjourn on Thursday, March 30. Weexpect that schedule to be met, and — as always — anticipate most majorpolicy issues being settled in the remaining two to three weeks beforeadjournment. Generally speaking, this session has been relatively low oncontroversy and conflict between the House and Senate. As we move into anelection year in 2018, we anticipate things heating up significantly.Following are some of the key issues before the legislature and a briefstatus on each issue.

Budget:The Senate just released its version of the next appropriations bill. TheHouse version of the bill largely tracked Gov. Nathan Deal’s proposal, andthe Senate version of the budget differs only modestly from the Houseversion. Given this, we expect a smooth budget conference and a relativelyfast agreement. Most of the differences are minor and consist of thestandard adjustments the two chambers make in terms of adding and deletingsmall appropriations and tinkering the bond package that funds statebuildings and other capital needs. Major changes in the budget includereimbursement increases for many healthcare providers, long overdue salaryincreases for state workers, and funding for major capital projects, suchas a new judicial complex on Capitol Hill.

Tax:This has been a very interesting year so far in tax. The House passedseveral bills, most of which use targeted tax cuts to help grow specificindustries, cut the overall rates, or expand the sales tax base to covernew goods and services to raise revenue. In the first category, legislationto enable boat repair businesses for large watercraft in Georgia, makemodifications to the state business incentive system, exempt artsfacilities construction from taxation, and extend the historicrehabilitation tax credit have made good progress. In the second category,the House passed a major overhaul of income tax that would, in essence,move Georgia closer to a flat tax structure for income tax. The Senate isexpected to pass this bill. In the last category, the House passed apackage of tax legislation that aims to extend the sales tax net to coverInternet-based transactions such as ridesharing, vacation home rentals,ticket sales and smaller retail sellers. It is unclear at this point whatthe Senate will do with these bills.

Balance Billing:This issue has turned into one of the highest-profile healthcare battles inthe legislature this year. The goal of policymakers has been to protectconsumers from having to pay large amounts in unplanned medical costs whenan out-of-network provider treats them in hospitals in situations wherethey cannot consent (e.g., emergency services, anesthesiology, pathology).The mechanics of implementing this have proven complicated, with physiciansand insurers proposing dramatically different approaches to calculating afair rate. This issue is likely headed to some kind of House-Senatenegotiation.

Gaming:Legislation to create casino gaming in Georgia came up short in the stateSenate. The sponsor has indicated he will pursue an education processaround the state over the summer and reintroduce the bill next year. Apackage to regulate fantasy sports in the state is doing better, andappears to be moving toward passage.

Certificate of Need:Several bills were proposed to target the certificate-of-need (CON) processin Georgia. Georgia’s CON laws are some of the tightest in the country andsignificantly curtail the construction of new healthcare facilities and theimprovement of existing ones. No CON bills were successful in leavingcommittee this year. However, discussion continues, at all levels of thelegislature, regarding the right steps to take to reform this program infuture sessions.

Transit:Legislation to expand transit service in DeKalb County was defeated in aSenate committee this year. Following the city of Atlanta’s successful pushfor transit funding last year, other counties continue to look towardexpansion, largely because of the critical role transit service plays ineconomic development for metro Atlanta cities and counties. The House andSenate have both proposed major reviews of transit in Atlanta, and weexpect to see action on this issue in the upcoming sessions of thelegislature, as well as a robust look at transit funding and governancethis summer.

Transportation Funding:The House and Senate both created subcommittees to appropriatetransportation funding. This is unusual in Georgia, because funds havehistorically been sent directly to Georgia’s Department of Transportation(GDOT), as mandated by the Constitution. However, a recent funding-increasebill created new funding sources that are now subject to appropriation forthe first time. The new subcommittees did some earmarking around the edgesof the overall funding stream this year, and we expect that trend tocontinue in future years. However, GDOT’s funding structure in the budgetremains generally unrestricted.

Energy/Telecommunications:The session began with active discussion on a range of energy andtelecommunications issues. On the telecom front, this included severalideas on expanding rural broadband, such as lowering taxes ontelecommunications infrastructure, creating broadband-ready communities and(most controversially) enabling electric co-ops to enter thetelecommunications business. These issues will continue to be discussed,likely in a study committee process over the summer. In energy, efforts torestrict disposal of coal ash and expand rooftop solar installations inGeorgia have been largely thwarted, while debate over a controversialpetroleum pipeline on the Georgia coast continues.

Alcoholic Beverages:A compromise among brewers, distributors and the craft brewing industry isheaded toward final passage. This removes one of the most controversialissues in this area from debate, at least for the time being. An effort toallow restaurants to sell alcohol during brunch on Sundays has stalled forthe year, but will likely be considered next year. Another measure toexpand shipping of bulk wine and grapes into farm wineries appears headedtoward passage.

Education:This has been a controversial year for higher education, with bills dealingwith sexual assault reporting, sanctuary campuses, and free speech policiesall emerging in the legislative process. Additionally, a push to allow thecarrying of concealed weapons on college campuses is still under activeconsideration. In the K-12 space, recommendations for a funding rewrite didnot emerge in the process in full form this year, although some reformcomponents have been introduced as individual bills. We expect to seefurther progress on this issue next year and final action this year on astatutory version of Gov. Deal’s proposal to turn around failing schoolsystems.

Victims’ Rights: The Georgia Senate passed, by a 50-4 margin, a constitutional amendment to protect the rights of crime victims inGeorgia. The measure is in House committee.

Medicaid/ACA: Uncertainty surrounding policy in Washington continues to slow discussionon what the state may do in a changed environment around Medicaid and theAffordable Care Act. Gov. Deal is clearly poised to take a leadership rolein this discussion, and has successfully urged caution until specificsabout federal policy are known. A special Senate task force met to startlooking at state insurance options if the ACA is repealed, and weanticipate that Gov. Deal’s team will strongly consider moving toward morewaivers and flexibility in Medicaid as the Centers for Medicare &Medicaid Services clears the path for those kinds of approaches in thefuture.

 

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For additional information, please contact Brad Alexander or a member of McGuireWoods Consulting’s Georgia State Government Relations Group.

Robert L. Fortson, Senior rel=”noopener noreferrer” Vice President

Lauren rel=”noopener noreferrer” C. Greer, Assistant Vice President

Ashley S. Groome, Senior Vice President

Misty H. Holcomb, Senior Vice President

Danica R. Key, Assistant Vice President

Michael T. Shelnutt, Senior Vice President