Minnesota legislature adjourns regular session ‘in a whimper’

The following comes by way of Dentons 50 partner Hill Capitol Strategies in Minnesota.

After nearly six months of committee hearings, floor sessions, long debates and a modern-day record of bill introductions, in the words of Senate Minority Leader Tom Bakk, “the Session ended in a whimper.” 

On Sunday, with less than 30 hours left before the constitutionally mandated end of the 2019 Legislative Session, the House, Senate, and Governor came to a budget agreement and global budget targets.  In a normal year, conference committees at that point in a session would have already resolved many of their policy differences and come to tenuous agreements on many of the provisions within each bill. However, this year’s general stalemate between the DFL Governor, DFL House and GOP Senate was too difficult to overcome. 

When the Constitutionally mandated deadline was reached at midnight Monday, the Minnesota Senate had passed two of the ten budget bills necessary to fully fund state government.  The House, like the Senate was able pass the Higher Education Omnibus Finance Bill and send the bill to the Governor. However, the House was unable to pass the Agriculture and Housing Omnibus Finance Bill before the midnight deadline.  This means most of the state government remains unfunded, the Legislature must pass the budget prior to July 1st, which is the start of the new biennium.  

For a session which started with bipartisan commitments to greater transparency, new deadlines intended to help move the budget process along and talk of easy early legislative wins, this session will likely go down as one of the least transparent sessions in the modern history of the state.  The late agreement of budget targets led to a final day of closed-door negotiations between members of the Legislature and the Walz Administration.  

Only two budget conference committees were able to meet a 5 pm Monday deadline to complete their work.  The failure of the remaining 8 Conference Committees resulted in what can only be described as individual budget tribunals involving the Governor, Senate Majority Leader, the Speaker of the House and the individual conference committee chairs.  It was suggested Leadership and the Governor would use these meetings to resolve any outstanding issues and close-up the budget bills. However, it doesn’t appear as though these meetings resulted in any final agreements.  

As it stands, larger bills, like the more than 1000-page Health and Human Services Omnibus Finance Bill and the Tax Omnibus Bill, must still be negotiated.  Numerous controversial policy provisions remain undecided in virtually every budget bill. While Conference Committee reports cannot be amended when heard on the floor of the House and Senate, during a Special Session the slate is wiped clean, and every bill must be reintroduced before being put to a vote. 

It is unclear as to exactly when the Governor will call a Special Session, House and Senate Leadership have both mentioned a possible one-day Session on Thursday, May 23rd. However, in order to complete their work quickly, the minority party in both bodies must agree to provide the votes necessary to suspend the rules and process legislation.  It appears unlikely the House Minority Leader is willing to help the House DFL pass the budget, especially given his exclusion from any of the budget negotiations. It does not appear one day will be enough to settle all the outstanding differences.

Minnesota special session adjourns until next year

The following comes by way of Dentons 50 partner Hill Capitol Strategies in Minnesota.

At 6:57 Saturday morning, a rare Memorial Day Weekend Special Session adjourned.  The 10 remaining budget bills were adopted during the 21-hour Special Session.  The following budget bills and a pension bill were adopted:

·         Taxes

·         E-12 Education

·         Health & Human Services

·         Environment & Natural Resources

·         Public Safety & Judiciary

·         Jobs & Energy

·         Transportation

·         Agriculture & Housing

·         State Government Finance & Veterans Affairs

·         Legacy

·         Pensions

The Global Budget Agreement reached between the Governor, Speaker of the House and Senate Majority Leader included passing a $500 million Capital Investment or Bonding Bill, however the bill was not brought forward for a vote in either body.  While the initial response from the Minority Leaders in both bodies was to not provide the votes necessary to suspend the rules and allow for a quick session, in the end private discussions likely led to some non-public agreements with the minority.  The outcome of those discussions and any agreements may never be made public or they could include changes we won’t see until the Legislature returns in 2020.  Whatever those discussions were, minority members in both bodies did offer a handful of amendments to various bills.  Those amendments were not adopted and the Legislature was able to meet the 7 am adjournment time agreed to with the Governor.  The Governor will sign the bills as they are presented to him this week

The new budget goes into effect on July 1, 2019.  The Legislature is not scheduled to return until noon, Tuesday, February 11, 2020.  Numerous House Committees have indicated an interest in conducting hearings or listening sessions over the Interim.  With the end of the Regular Session, Minnesota’s prohibition on fundraising from Lobbyists and Political Action Committees during the session also goes away.  It certainly didn’t take long for the mailbox to fill with invites to numerous fundraising events. 

Sine Die in Maryland: policy, political highlights from this year’s legislative session

The following deep dive comes by way of Dentons 50 partner firm Mannis Canning & Associates.

The 2019 General Assembly Session came to a close at midnight on April 8. This session was the first of a new four year term with a total of 60 legislators out of 188 beginning their role as a new senator or delegate and with several changes in committee chairmanships. The session was also an emotional one as Senate President Thomas V. Mike Miller, Jr. announced he had prostate cancer at the start and House Speaker Michael E. Busch passed away the day prior to Sine Die.

A total of 2,481 pieces of legislation were introduced – 1,051 originating in the Senate1,430 originating in the House, 16 Joint Resolutions, and two simple resolutions.  Of this number, the General Assembly passed 864 pieces of legislation and 2 resolutions.

Legislators focused on balancing the fiscal year 2019 budget, increasing the minimum wage, expanding opportunity zones, laying the ground work for increased funding for K-12 education, banning the use of polystyrene, and moderating the costs of prescription drugs to name a few.

Becoming more of a trend with a Republican Governor and Democratic majority in the General Assembly, a number of bills were passed and presented to the Governor at the end of March/early April to provide sufficient time for the General Assembly to override any potential vetoes. Of the bills presented, the Governor vetoed four bills on March 27 and one bill on April 4, all of which were overridden by the General Assembly. Legislation referred to as the “Federal Shutdown Paycheck Protection Act” had broad support and was passed and signed by the Governor the end of March.

With the early presentment of bills, one bill signing was held prior to the end of session on March 26. The traditional bill signing, which is held the day after session, was canceled this year to appropriately honor Speaker Busch and other bill signings were scheduled following his services. Bill signings have been scheduled for April 18, April 30, and May 13.

Below is a summary of some of the major issues that passed the 2019 General Assembly Session. A more detailed overview of significant legislation that passed and failed can be found in the Department of Legislative Services 90 Day Report.

Fiscal Year 2020 Budget

The fiscal year 2020 budget as enacted by the General Assembly (House Bill 100) totals $46.6 billion, a 4% increase from fiscal year 2019. The general fund budget, the portion supported by tax related revenues such as the income tax, sales tax, and state lottery, accounts for 41.6% of the total budget or $17.9 billion. The general fund budget is subject to volatility as its revenue sources are directly affected by the economy. The term structural deficit or shortfall often refers to the gap between general fund expenditures and general fund revenues.  Significant revenue over attainment mostly eliminated any cash and structural shortfalls for fiscal 2020, but projections for fiscal 2021 indicate a structural deficit returning of more than $1.4 billion.

Following submission of the Governor’s budget, revenues were revised downward by the Board of Revenue Estimates resulting in a larger than expected shortfall. To keep the budget in balance, the Governor introduced a supplemental budget to make some adjustments and House Bill 1407 – the Budget Reconciliation and Financing Act of 2019 was introduced to address the revenue shortfall and fund certain budget priorities.

The budget as enacted by the General Assembly leaves a $118.2 million general fund balance and a structural surplus of $26 million at the end of fiscal year 2020. $1.1 billion is preserved in the State’s Rainy Day fund and state spending was constrained in preparation for fiscal 2021.  State support for public schools is a record $7 billion and total state aid for primary and secondary education will increase by an estimated $435.2 million. The budget dedicates at least $255 million to support the fiscal 2020 recommendations of the Commission on Innovation and Excellence in Education (Kirwan Commission) and funding for school construction, both operating and capital, is $500 million. To achieve these funding levels, the General Assembly repurposed $182.2 million in general funds and $101 million in special funds to provide $104.8 million for Kirwan, $127 million for school construction in the operating budget, and $25 million for housing programs originally funded with taxable bonds in the capital budget. The budget also directs the Governor to process a budget amendment to provide an additional $150.3 million to implement recommendations of the Kirwan Commission.  Additional funding for Kirwan may be provided by Senate Bill 728/House Bill 1301 which requires a marketplace facilitator and a market place seller to collect and remit the State sales tax. Revenues in excess of $100 million are to be distributed to “The Blueprint for Maryland’s Future Fund” created through the Kirwan legislation.

Other budget priorities include Medicaid funding to provide coverage to 1.4 million residents, an additional $80 million targeted at substance use disorder treatment, and funding to moderate tuition increases at Maryland’s public four-year colleges and universities.

Additional information on the fiscal year 2020 budget as enacted by the General Assembly can be found in the Budget and State Aid section of the Department of Legislative Services (DLS) 90 Day Report.

Income and Sales Tax Legislation

Opportunity Zone Enhancement Program

The Federal Tax Cuts and Jobs Act of 2017 established the Qualified Opportunity Zones Program to incentivize private investment in distressed communities. These zones are specified areas designated as a federal opportunity zone under Section 1400Z-1 of the Internal Revenue Code. Senate Bill 581 establishes the Opportunity Zone Enhancement Program which provides qualifying businesses within an opportunity zone enhanced incentives under the following tax credit programs: (1) job creation; (2) One Maryland; (3) enterprise zone; (4) biotechnology investment incentive; (5) cybersecurity investment incentive; and (6) More Jobs for Marylanders.

The bill also extends the More Jobs for Marylanders program by two years and expands the program’s geographic and business eligibility criteria. Additionally, the bill extends the geographic eligibility for a number of other State economic development/tax credit and financing programs available for priority funding areas and/or sustainable communities to include opportunity zones in Allegany, Garrett, Somerset, and Wicomico counties.

Remote Sales Tax Collection

Senate Bill 728/House Bill 1301 requires an online marketplace facilitator and a marketplace seller to collect and remit the State sales and use tax under specified circumstances. The need for this legislation results from the South Dakota v. Wayfair, Inc. decision where the U.S. Supreme Court upheld a South Dakota law requiring remote sellers with sales over $100,000 or with more than 200 different transactions to residents in the state to collect the state’s sales tax. Effective October 1, 2018, regulations promulgated by the Comptroller require a similar threshold for the collection of sales tax by out-of-state vendors who sell tangible personal property or taxable services for delivery in Maryland. However, the regulations did not address the collection of sales tax by online marketplace facilitators that host third-party marketplace sellers.

In addition to requiring the collection and remittance of the State sales tax, the bill establishes tax collection and licensing requirements for marketplace facilitators and marketplace sellers. The first $100.0 million in sales taxes collected from marketplace facilitators and certain out-of-state vendors is to be distributed to the General Fund.  Any revenue in excess of $100.0 million from these sales taxes is required to be distributed to The Blueprint for Maryland’s Future Fund to fund K-12 education.

Business and Labor

Alcohol and Tobacco Commission

Legislation that passed in 2018 established the Task Force to Study State Alcohol Regulation, Enforcement, Safety, and Public Health. The task force was required to examine whether the Comptroller’s Office, the Office that currently regulates the alcoholic beverage industry and enforces the laws, is the most appropriate agency to carry out these activities or if another entity should perform this function. In its final report, the task force recommended establishing a new separate agency in charge of regulating and enforcing alcohol, tobacco, and motor fuel laws in the State.

House Bill 1052 (Ch. 12) implements this recommendation and establishes the Alcohol and Tobacco Commission (ATC). The commission is granted various powers and duties, including (1) educating the public on topics related to using and consuming tobacco products and alcoholic beverages; (2) ensuring that all alcoholic beverages sold in the State with an alcohol content exceeding 4.5% by volume bear a large and conspicuous label stating the percentage of alcohol content; (3) conducting certain studies; and (4) developing best practices for various topics related to alcoholic beverages regulation. The Act also transfers the Field Enforcement Division and the personnel of the division from the Comptroller’s Office to the commission. House Bill 1052 was presented to and vetoed by the Governor in late March.  The General Assembly overrode the veto and the bill became Chapter 12 of the Acts of 2019.

Minimum Wage

One of Democratic Leadership’s legislative priorities, Senate Bill 280/House Bill 166 (Chs. 10 and 11) increase the State minimum wage rate to $15.00 per hour. For employers with 15 or more employees, this will occur in six increments until the full phase-in is reached on January 1, 2025. For employers with 14 or fewer employees, the wage rate reaches full phase-in after eight increments on July 1, 2026. The Board of Public Works (BPW), however, may temporarily suspend one scheduled increase in the State minimum wage for one year between October 1, 2020, and October 1, 2024, if it determines that the seasonally adjusted total employment is negative as compared with the previous six-month period. If total adjusted employment is negative, BPW may also consider the recent performance of State revenues in making its determination.

Senate Bill 280/House Bill 166 were presented to and vetoed by the Governor in late March.  The General Assembly overrode the veto and the bills became Chapter 10 and 11 of the Acts of 2019.

Education

The Blueprint for Maryland’s Future (Commission on Innovation and Excellence in Education – Kirwan Commission)

Senate Bill 1030 extends the term of the Kirwan Commission and establishes The Blueprint for Maryland’s Future as a policy to transform Maryland’s education system and align it with the recommendations in the commission’s January 2019 interim report. The fiscal 2020 budget provides funding for multiple programs and entities established under The Blueprint for Maryland’s Future: (1) $75.0 million for teacher salary incentive grants; (2) $65.5 million for the education of students with disabilities; (3) $54.6 million for concentration of poverty school grants; (4) $31.7 million to expand full-day prekindergarten for four-year-olds; (5) $23.0 million to provide transitional supplemental instruction grants; (6) $2.5 million for teacher collaborative grants; (7) $2.0 million to fund a full-time mental health services coordinator for each local school system; (8) $689,137 for an Office of Inspector General for Education; (9) $500,000 to expand MSDE’s direct certification IT system to include Medicaid data; and (10) $250,000 for outreach and training on The Blueprint for Maryland’s Future.

While provisions in the fiscal 2020 State operating budget, and in the Budget Reconciliation and Financing Act, House Bill 1407 (Ch. 16), restrict and direct funds to cover the $251.6 million increase in State aid (as well as other provisions), funding of these fiscal 2020 enhancements is at the discretion of the Governor. In total, approximately $255.0 million is made available through separate legislation to implement The Blueprint for Maryland’s Future in fiscal 2020, contingent on enactment of Senate Bill 1030. Section 47 of the fiscal 2020 budget bill restricts $100.8 million in Education Trust Fund (ETF) lockbox funds to specific purposes. It also expresses legislative intent that the Governor process a budget amendment to appropriate $134.5 million in special funds set aside in fiscal 2019 to implement the Commission’s recommendations.

Public School Calendar

On August 31, 2016, the Governor issued Executive Order 01.01.2016.09 (later amended by Executive Order 01.01.2016.13) requiring the local boards of education to open schools following the Labor Day holiday and conclude the school year by June 15, beginning in the 2017-2018 school year. During the 2018 session, legislation was introduced and passed to authorize a local board of education to extend the school year for up to five school days beyond June 15 without approval from the State Board of Education. Senate Bill 128, the Community Control of School Calendars Act, repeals the 2018 legislation and instead requires each local board of education to set start and end dates each year for public schools in the county. This again provides flexibility to the local boards of education to determine the start and end dates for the school year no longer complying with the Executive Order. Senate Bill 128 was presented to and vetoed by the Governor in late March.  The General Assembly overrode the veto prior to the end of session and the bill became Chapter 13 Acts of 2019.

Environment and Natural Resources

Polystyrene Ban

Expanded polystyrene foam is often used in food product packaging. Senate Bill 285/House Bill 109 prohibit (1) a person from selling or offering for sale in the State an “expanded polystyrene food service product” and (2) a “food service business,” which includes specified businesses, institutional cafeterias, or schools from selling or providing food or beverages in an expanded polystyrene food service product. To ease the financial burden placed on business entities, MDE may grant to a food service business or school a waiver from the bills’ prohibition for up to one year if MDE determines that compliance would present an undue hardship or a practical difficulty that is not generally applicable to other food service businesses or schools in similar circumstances.

Maryland is the first state to impose a statewide ban on these products.

Renewable Energy

Senate Bill 516 increases the Renewable Energy Portfolio Standard (RPS) from 25% by 2020 to 50% by 2030. Effective October 1, 2019, the bill reestablishes the expired Tier 2 of the RPS as an additional requirement to include electricity from large hydroelectric sources for two years, in 2019 and 2020. New offshore wind capacity is required beginning with at least 400 megawatts in 2026, increasing to at least a cumulative 800 megawatts in 2028, and to at least a cumulative 1,200 megawatts in 2030, along with goals and reporting requirements for minority business enterprise and minority workforce participation. The carve-out for solar increases to 5.5% in 2019, with further annual increases until the solar carve-out reaches 14.5% in 2028. Electric cooperatives are exempt from any solar carve-out increase beyond 2.5%. To control ratepayer impacts, the bill reduces Tier 1 Alternative Compliance Payments (ACP) beginning in 2019; by 2029, solar and nonsolar Tier 1 ACPs reach parity. ACP revenue remains dedicated to supporting new renewable energy sources in the State, but under the bill, those new renewable energy sources also must be owned by or must directly benefit low-income residents.

Oyster Sanctuaries

House Bill 298 establishes in statute a network of five oyster sanctuaries (in Harris Creek, the Little Choptank River, the Tred Avon River, the St. Mary’s River, and the Manokin River) and prohibits catching oysters in or removing oyster seed from the five sanctuaries or those established in regulation by the Department of Natural Resources (DNR). The bill also establishes requirements and deadlines relating to restoration plans for the five identified sanctuaries.

House Bill 298 was presented to and vetoed by the Governor in early April. The General Assembly overrode the veto prior to the end of session and the bill became Chapter 17 Acts of 2019.

Health

Prescription Drug Transparency and Affordability

House Bill 768 establishes a Prescription Drug Affordability Board to address issues of transparency and affordability.  The board must conduct a study on the entire pharmaceutical distribution and payment system and policy options being used in other states and countries. The board must also collect publicly available information and data and enter into memoranda of understanding with other states to collect data in order to identify prescription drug products that may cause affordability issues. The board may conduct a cost review of each identified drug product. If the board determines that it is in the best interest of Maryland to implement a process for setting upper payment limits on prescription drug products, the board must draft a plan of action to implement the process and submit the plan to the Legislative Policy Committee (LPC) for approval. If LPC does not approve the plan within 45 days, the board must submit the plan to the Governor and the Attorney General for their approval. The board may not set upper payment limits before getting approval of the plan.

Opioid Treatment Services

House Bill 116 establishes programs for opioid use disorder screening, evaluation, and treatment (specifically medication-assisted treatment) in local correctional facilities and in the Baltimore Pre-trial Complex. The program begins in four counties and phases in to include all counties and the Baltimore Pre-trial Complex by January 2023. The State must fund the programs of opioid use disorder screening, examination, and treatment of inmates, and the bill establishes requirements for screening and treatment. By November 1, 2020, and annually thereafter, GOCCP must report specified data to the General Assembly from local correctional facilities.

Georgia 2019 legislative recap

At midnight on Tuesday, April 2, the 2019 Georgia Legislative Session came to a close. After hundreds of bills were introduced in both the State House of Representatives and the State Senate, the select few that received bicameral approval await the governor’s signature. Governor Brian Kemp has 40 days, until May 12, to sign, veto or pass on each bill approved by the legislature. If he neither signs nor vetoes a bill, it becomes law automatically at the end of the 40 days.

The 2019 legislative session, the first of Governor Kemp’s four-year term, was headlined by health care reform, an election overhaul and controversial abortion legislation. This comprehensive recap reviews every major legislative effort and predicts the issues that will define 2020.

Successful legislation

Election overhaul

In April 2018, then Secretary of State Kemp established the Secure Accessible & Fair Elections (SAFE) Commission to examine the state’s voting system and provide recommendations to the General Assembly. He and Representative Barry Fleming (R-Harlem) co-chaired the SAFE commission, which included legislators, elections officials, an IT and cybersecurity expert, political party representatives, a voter accessibility expert and two “at-large” voters.

The committee recommended a complete overhaul of the election system. They advised that the state switch from the current computer-based system to a “hybrid” voting system that utilizes electronic machines while also producing a verifiable paper record.

The governor’s budget, released on January 17, included $150 million in bond funds to replace all 27,000 voting machines—the estimated amount required for the recommended touch-screen ballot-marking devices. Subsequently, the recommendations of the commission were included in House Bill 316, which was signed into law on Tuesday, April 2. In addition to provisions to replace voting machines, the law includes several amendments championed by Democratic members of the General Assembly, including changes to voter registrations and polling locations.

The bill was introduced on February 14 by House Judiciary Chairman Barry Fleming (R-Harlem), approved by the House Governmental Affairs Committee by a vote of 13-6 and passed by the full House just seven days after its introduction. Shortly thereafter, on March 6, the bill passed the Senate Ethics Committee, 7-5.

An amended version of House Bill 316 passed the full Senate on Wednesday, March 13, by a vote of 35-21; the House quickly agreed to the Senate’s amendments.

Now that Governor Kemp has signed the bill, Secretary of State Brad Raffensperger will formally begin the process of selecting a vendor.

Here’s a quick reminder of what the new law does:

1. New voting machines

Primarily, and most controversially, the law requires that the current touch-screen voting system be replaced with a “hybrid” system that utilizes electronic voting machines while also printing physical voting sheets for confirmation. The administration is hopeful that the system, estimated to initially cost around $150 million, will be fully operational by November 2020. This effort ends Georgia’s standing as one of only four states that relies entirely on electronic voting machines void of a verifiable paper trail.

Upon deployment, the new system will be subject to audits in select precincts under the supervision of the State Election Board.

2. Registration cancellations

The period of voter inactivity before one’s registration is cancelled has been extended. Previously, voter registrations could be cancelled after six or seven years if a voter had no contact with election officials and failed to cast any votes over the time period. The new standard is eight or nine years of inactivity.

Additionally, voters are now required to be mailed notification of an upcoming cancellation between 30 and 60 days in advance.

3. Exact match

The exact-match system, which requires consistency across all state documents to verify a voter’s identity, has changed slightly. Instead of putting flagged individuals on pending status immediately, all voter registrations will now become active voters. Inconsistencies are noted in voting records after the fact, at which time flagged individuals will be required to show photo identification that meets exact-match standards to cast a ballot.

4. Polling sites

Changes to precincts, including relocations and closures, are no longer permitted within 60 days of an election. Additionally, the law calls for one voting machine for every 250 voters, a decrease from the previous requirement of a machine for every 200 voters. However, the new machines will be used in both early voting and election day voting, a benefit that was not possible with the state’s old machines.

5. Recounts

The new law lowers the threshold required for an automatic recount from a one percent differential to a 0.5 percent differential.

6. Absentee ballots

Instead of rejecting absentee ballots for mismatches between a voter’s signature on their ballot and the one on file, voters will be sent provisional ballots that will be counted if the affected voter provides valid identification.

Secretary of State Raffensperger is now working to ensure the new system is in place prior to the 2020 primary.

Certificate of need

One of most convoluted, confusing and contentious issues of the legislative session was certificate of need (CON) reform. The certificate of need licensure process has been the state’s primary health care licensure regime since its inception in 1979.

The call for reform, a yearly occurrence, came to a boiling point this session after reports from the Senate Study Committee on Certificate of Need Reform, chaired by Senator Ben Watson (R-1), and the House Rural Development Council, co-chaired by Representative Terry England (R-Auburn) and Representative Jay Powell (R-Camilla), called for a full repeal of the CON system that has regulated health care services in Georgia for generations.

Two bills, House Bill 198 and Senate Bill 74, were introduced within the first week of the session. Both would have completely repealed and replaced the CON system. In addition, those bills included transparency requirements for nonprofit hospitals and increased the cap for the rural health care tax credit.

On Monday, February 25, HB 198 passed out of the House Special Committee on Access to Quality Health Care by a vote of 9-4. The bill was recommitted to the special committee, amended and re-presented before ultimately failing on the floor, prior to Crossover Day.

Similarly, two other CON reform bills, Senate Bill 114 and Senate Bill 74, failed to crossover to the House prior to the mandated changeover date.

However, as is often the case when such a significant piece of legislation is backed by influential legislators, CON reform quickly found new life.

Specifically, House Bill 186, a bill originally dealing with hospital authority transactions that had already passed the House, was amended to serve as a vehicle for further changes to the CON law. Despite continuing concerns from many in the hospital community, HB 186 was supported by the Georgia Hospital Association and the Georgia Alliance of Community Hospitals as a “compromise” bill.

House Bill 186 limits CON application objections to entities that are within a 35-mile radius of a proposed project, creates a pathway for Cancer Treatment Centers of America to expand its operation and increases the financial threshold for expansions that are not subject to CON requirements.

Notably, the bill does not allow for stand-alone emergency rooms, cardiology ambulatory surgery centers or specialized sports medicine facilities.

The bill passed out of the Senate Rules Committee on Monday, March 25, and passed the entire Senate by a vote of 51-4. Soon thereafter it passed the House by a vote of 170-3.

However, the advocates for CON reform were still not finished and proceeded to push through another, more controversial, section of the original CON bill that found its way back into active legislation.

An amendment was added to House Bill 321 to require extensive financial disclosures from nonprofit hospitals, which would be required to make a whole host of financial documents available for public consumption, including bank statements, patient revenues, real estate estimates and executive salaries.

The bill passed both the House and Senate by sizable margins on the back of vocal support from several large hospital systems and Republican leadership. In particular, Lieutenant Governor Geoff Duncan signaled his strong support for the effort via Twitter. House Bill 321 is bolstered by a state budget item to fund a consultant’s review of nonprofit hospitals’ executive compensation and lobbying activity.

Health care waivers

Throughout his campaign for governor, then Secretary of State Kemp pledged to address Georgia’s subpar health outcomes while also categorically refusing to expand Medicaid. In mid-January, when the governor released his proposed budget it became clear that the administration would pursue waivers. The budget dedicated $1 million to an external consultant who would study the issue.

However, to accomplish that goal the General Assembly would have to pass a bill giving the governor back the authority to pursue waivers after it stripped the office of that power in 2014. On Wednesday, February 13, Senator Blake Tillery (R-19) introduced Senate Bill 106 to do just that.

The bill, which has already been signed into law after passing both chambers, gives Governor Kemp the authority to submit for a 1115 waiver from the US Department of Health and Human Services (HHS) to address Medicaid, and a 1332 waiver from both HHS and the US Treasury Department to address the Affordable Care Act. He must do so by June 30, 2020.

Both efforts hinge on federal approval for a waiver to state health care rules.

The 1115 waiver would expand coverage to indigent Georgians with incomes up to the poverty level, about $12,000 for individuals, whereas the 1332 waiver would stabilize the Affordable Care Act exchange markets in an effort to stem skyrocketing insurance premiums.

Notably, the law was not amended since it was introduced—the language is exactly what the governor proposed.

Abortion

In addition to his promise to address health care outcomes, Governor Kemp was vocal about his conviction to sign the “toughest abortion laws in the country.” He is expected to make good on that promise by signing House Bill 481, which would ban abortions once a doctor can detect a heartbeat in the womb, usually around six weeks into a pregnancy. Currently, Georgia law allows for abortions up to 20 weeks.

After briefly entertaining a trigger bill that would have banned all abortions should the Supreme Court overturn Roe v. Wade, Governor Kemp, Lt. Governor Duncan and Republican leadership at the Capitol rallied behind the heartbeat bill introduced the week leading up to Crossover Day on March 7.

House Bill 481, sponsored by Ed Setzler (R-Acworth) passed the House on Crossover Day with just two votes to spare (93-73). In addition to restricting abortions, the Living Infants Fairness and Equality (LIFE) Act would allow parents to receive a child tax credit if a heartbeat has been detected and the mother provides a state-certified pregnancy test. It is thus far unclear how such tests would be verified.

After four hours of rigorous debate, the bill passed the Senate by a vote of 34-18. The House then approved the Senate’s amendments by another razor-thin margin. The governor is expected to sign the bill.

Democrats, who have remained staunchly opposed to the legislation, have promised to remind voters of the bill, which will be one of the most restrictive in the country during the next election cycle. After several film industry executives vocalized their displeasure, Senator Nikema Williams (D-39), who chairs the state Democratic Party, pivoted to an economic argument: “You can’t just say you’re the number one state to do business. You have to live those values. And that includes making sure we are open for business for everyone. That includes women.”

Governor Kemp maintains that he is unconcerned with a business backlash over the anti-abortion bill: “Our business environment is good. We cannot change our values of who we are for money. And we’re not going to do that. That’s what makes our state great. For people to want to boycott the state because we are protecting life at the heartbeat–I don’t understand that. It just doesn’t make very much sense to me, and I think I’ve shown early on I’m a business-friendly governor.”

He has remained unwilling to back down from what was a signature campaign promise even amid internal party misgivings from vulnerable suburban Republican members who are likely to face strong oppositions come November 2020.

Finally, the bill, if signed, will likely face legal challenges. The American Civil Liberties Union has vowed to file a lawsuit immediately upon its signature. Notably, last month a federal judge in Kentucky temporarily blocked a similar heartbeat abortion law, ruling it was potentially unconstitutional.

Medical Marijuana

After years of advocacy led in part, by former State Representative Allen Peake, Georgia lawmakers agreed on legislation, minutes before the clock struck midnight on Sine Die, to allow medical marijuana patients to buy cannabis oil in Georgia. At present, the use of cannabis oil is legal but the sale and purchase of the substance is not.

House Bill 324, sponsored by Representative Micah Gravley (R-Douglasville), would legalize the cultivation and distribution of medical marijuana by independent growers, state universities and licensed sellers.

Specifically, the legislation licenses private companies and universities to grow medical marijuana which would be converted into oils and sold by pharmacies and possibly dispensaries to the 8,400 registered medical marijuana patients in Georgia.

In 2015, Georgia legalized medical marijuana consumption in oil form for patients suffering from severe seizures, deadly cancers and other illnesses, but until now, provided the governor signs the legislation, there was no way for patients to purchase it.

The legislation allows for up to six private companies to be licensed to grow marijuana and manufacture oil. In addition, two universities could seek federal approval to start medical marijuana programs. Pharmacies would potentially be able to sell the drug, and a state oversight board would have the authority to allow private dispensaries.

House Bill 324 would make Georgia the 31st state to allow some form of marijuana cultivation. The governor is expected to sign the legislation.

Teacher raises

Governor Kemp delivered, in large part, on another one of his core campaign promises: teacher pay raises. Prior to the November 2018 election, Governor Kemp promised a $5,000 pay raise for every public school teacher.

He took the first step to keeping that promise when he released his budget in mid-January which included $491,624,884 in fiscal year 2020 to adjust the state base salary schedule to increase salaries for certified teachers and employees by $3,000.

After legislators from the House and Senate went to conference committee to hash out differences over the fiscal year 2020 budget, lawmakers approved a record $27.5 billion budget for the next fiscal year that includes a $3,000 pay raise for public school teachers and a two percent hike for tens of thousands of state workers.

Once the governor signs the bill into law, it will be one of the largest teacher pay raises in state history. While teachers did not get the entire $5,000 pay raise Governor Kemp campaigned on, he is pitching this initial increase as a precursor to future pay raises.

School safety

In addition to teacher pay raises, the budget includes almost $70 million dollars for school security grants. The money will be divided into one-time payments of $30,000 for each public school in the state to spend on security, however they see fit.

Notably, the General Assembly did outline additional duties for schools. Senate Bill 15 would require regular threat assessments, safety plan updates and drills in public schools.

Moreover, it would mandate and clarify coordination between state agencies, local authorities and schools.The bill, which is awaiting the governor’s signature, would allow state police to issue subpoenas without a court order, going through the Georgia attorney general. Phone companies, Internet services and other electronic communications providers would be prohibited from telling customers about the subpoena or any records shared.

Rural broadban

In an effort to address the lack of quality Internet access in rural Georgia, two bills passed this session to permit more companies to enter the Internet business. The first, Senate Bill 2, allows electric membership corporations to sell Internet service along with power. The second, Senate Bill 17, which passed just prior to the end of the session, allows telephone cooperatives to offer Internet services. Both await the governor’s signature.

Legislative leave reform

In the wake of an investigative report by the Atlanta Journal-Constitution and Channel 2 highlighting the use of legislative court privileges that allow for cases to be delayed in the event a lawmaker is fulfilling his or her public duties, House Speaker Ralston appointed a 12-person panel to study the issue. The panel was co-chaired by former House Republican Whip and current Dentons Georgia Government Affairs practice lead Edward Lindsey and former Democratic Representative Ronnie Mabra. The panel also included Representative Jon Burns (R-Newington) and Representative Bob Trammell (D-Luthersville).

The commission proposed giving judges explicit authority to approve or deny these requests in addition to providing opposing counsel and, in criminal cases, victims themselves, the chance to object to the request.

A bill to codify the recommendation passed nearly unanimously in both houses.

Rape kits

In a rare display of unity, not one member of the General Assembly voted against House Bill 282, which would require police to preserve evidence of rapes and similar crimes for up to 50 years. Current state law allows evidence of sexual assaults to be discarded after 10 years.

Under the legislation, evidence including stains, fluids and hair samples would be kept for 50 years if no arrest is made. If a suspect is arrested, evidence would be preserved for 30 years, or for seven years after a sentence is completed.

HIV

Georgia leads the United States in HIV rates for adults and adolescence at about 31.8 per 100,000 people according to the Centers for Disease Control and Prevention. The General Assembly agreed to two bills to address the crisis. The first would approve needle exchange programs, to help prevent new HIV and other infections among intravenous drug users. The second would set up a pilot program for distribution of a pill known as PrEP to people at high risk of HIV. The pill, whose name is short for pre-exposure prophylaxis, can lower one’s chances of getting the virus if taken daily.

Looking ahead

The Georgia legislature operates on a two-year legislative session. Thus, bills that did not pass this year can be resuscitated next session. There were several efforts that generated significant press coverage and interest from high-ranking public officials that did not, in the end, come to pass. Each of these efforts is likely to be reignited come January 2020.

Hartsfield-Jackson Airport

The battle over control of Hartsfield-Jackson Airport nearly came to a head this year, making it farther along the legislative gauntlet than any bill in previous legislative sessions. Senate Bill 131, which would have put Hartsfield-Jackson International Airport under state control, passed out of a Senate committee the last week of February. To the surprise of many, including the city of Atlanta and Delta Air Lines, both of which opposed the bill, SB 131 passed the full Senate prior to crossover.

Once it reached the House, opposition from Speaker Ralston (R-Blue Ridge) slowed the bill’s progress.

The House significantly amended the bill. They changed the airport language to create a state oversight committee instead of changing ownership, added a jet fuel tax exemption coveted by Delta and incorporated language from House Bill 511, which addresses rural transit.

That bill passed the House 104-70 but failed to move in the Senate. Throughout the process the Republican caucus in the Senate wanted stronger control of the airport, an outcome House leadership would not accept.

Interestingly, there are those in Atlanta who may have accepted a weak oversight committee rather than risk the issue coming up again next session, which it inevitably will. If there were to be more revelations of corruption at City Hall, it could add fuel to the fire and lead to a complete takeover come 2020.

Transportation

A year after guiding House Bill 930, which consolidated transportation administration in the Atlanta metro area into one system under the newly established Atlanta Transit Link, Representative Kevin Tanner (R-Dawsonville) embarked on yet another ambitious transportation effort. House Bill 511 would divide the state, outside of metro Atlanta, into eight transit planning zones and permit counties to raise taxes for transportation construction and operation. The bill would also consolidate transit services into a single agency, the Georgia Department of Mobility and Innovation. Both the State Road and Tollway Authority and the Atlanta-Region Transit Link Authority would operate under the new agency. At present, six state agencies have separate transit functions.

Additionally, the bill would create the first ever dedicated state transportation funding mechanism by allocating state sales tax revenue from rides-for-hire to transportation investment.

After passing the House the bill failed to get out of the Senate Transportation Committee. As previously mentioned the language was then folded into Senate Bill 131, along with the revised airport oversight commission and a jet fuel tax break. After that did not win over the Senate leadership, the rural transportation language and the jet fuel tax were tacked onto Senate Bill 200, which was originally legislation to require the Department of Transportation to set up procedures to appeal rejected bids for contracts. That effort also failed.

In sum, after several attempts the new rural transit structure did not pass. However, it is likely to resurface next session as another mechanism to spur economic development outside of the 13 metro Atlanta counties.

Gambling

There were several efforts to bring gambling to Georgia this session.

Senate Bill 45, dubbed the Rural Georgia Jobs and Growth Act, was approved by the Senate Committee on Economic Development and Tourism early in the session. The bill would permit up to three horse-racing tracks in Georgia and is paired with Senate Resolution 84, a constitutional amendment that would ask voters if betting on horse racing should be legal.

Additionally, a broader effort to permit gambling in the state, Senate Resolution 184 was sponsored by Senator Brandon Beach (R-21). The resolution would have put to voters the question of whether or not to permit casino gambling at destination resorts in Georgia.

In the end, a study committee was appointed to study the issue. According to House Resolution 367, a panel of 11 lawmakers—including most of Senate leadership—are expected to meet during the summer and fall to study the impact of horse racing and casino gambling in the state. For those who want to see legal gaming in the state, this is an encouraging sign. More often than not, if a study committee is assigned, viable legislation with significant support will result.

“By having the right people around the table and learning and being educated on the issue, I think we’ll make progress next year,” Senator Beach said.

For years, lawmakers have sought to expand gambling in Georgia. Unlike previous leaders, Governor Kemp, Lt. Governor Duncan and Speaker Ralston (R- Blue Ridge) did not specifically oppose the measure this year.

Electric scooters, bikes

Lawmakers approved House Bill 454 to regulate electric bikes but stopped short of increased regulation of electric scooters.

The bill originally included statewide regulations for electric scooters, but the language was ultimately stripped. Lawmakers have stated that talks will continue, with an eye toward a new bill next year. To facilitate that conversation, the State Senate approved Senate Resolution 479, which creates a committee to study scooter regulations. The committee will report back before next year’s legislative session. 

Streaming tax

Efforts to establish a tax on video streaming, e-books and music downloads failed to gain a floor vote amid opposition from both Governor Kemp and Lt. Governor Duncan.

Representative Bill Werkheiser (R-Glennville), with the support of House Rules Chairman Jay Powell (R-Camilla), introduced House Bill 428 to impose a four percent combined state and local tax rate on communications services other than direct broadcast satellite services and subscription streaming services. The bill was assigned to the House Ways and Means Committee.

The bill did not make it out of committee but the issue is expected to resurface.

Education scholarship accounts

Efforts to expand school choice were given a boost with the election of Lt. Governor Duncan, who firmly supports not only charter schools but also education scholarship accounts that permit parents to spend the state education money allocated to their child.

Senate Bill 173, the Georgia Educational Scholarship Act, passed out of the Senate Finance committee in early March by a vote of 9-3. The legislation would establish “education scholarship accounts” to transfer state dollars equal to the amount the state pays per student in a given district, to parents. The money could have gone to a private school instead, or to other educational costs, including textbooks, tutoring or therapy.

The Senate voted down Senate Bill 173.

After the Senate bill failed, moderated language was attached to House Bill 68 sponsored by Representative John Carson (R-Marietta). The adjusted language capped participation in the program to 2.5 percent of statewide enrollment and restricted access to certain at-risk student demographics.

Then, on Friday, the second to last day of the 2019 legislative session, the Senate Rules Committee reversed course, removing the SB 173 language from HB 68.

While expanded educational choice did not make it over the finish line this year, the support of Lt. Governor Duncan bodes well for future efforts.

Mental health

House Bill 514 was passed and would, upon approval by the governor, establish a state commission to analyze Georgia’s behavioral health services and recommend improvements.

The commission would be authorized to take ‘‘a very deep dive’’ into the state’s mental health system, said Representative Kevin Tanner (R-Dawsonville), lead sponsor of House Bill 514.

Emergency medical services

A bill to bring greater transparency to the provision of ambulance services in Georgia fell short. House Bill 264, sponsored by Representative Werkheiser (R-Glennville), would ban private providers from influencing contracting decisions, impose stricter reporting requirements and ensure that those who lobby EMS councils to register with the state ethics commission.

Two different versions of House Bill 264 passed the House and the Senate before ultimately going to conference committee. There the bill was altered to include regulations on tattoo artists and changes to campaign finance law. A consensus could not be reached. The issue has been tabled but will certainly reemerge in the 2020 session.

Freight and logistics

There were two efforts during the legislative session to create a commission to examine the state’s freight and logistics apparatus. Senator Brandon Beach (R-21) sponsored Senate Resolution 318, while Representative Kevin Tanner (R-Dawsonville) sponsored House Resolution 37. Both bills would have established the Georgia Commission on Freight and Logistics. Ultimately HR 37 passed both chambers and will, upon the governor’s signature, become law and create the commission.

The Georgia Commission on Freight and Logistics will be comprised of three members of the House and three members of the Senate as well as four freight and logistics industry professionals and four mayors or county commissioners. The commissioner of the Georgia Department of Transportation and the executive director of the Georgia Ports Authority would serve as ex-officio members.

The commission will study and recommend public policy changes concerning freight and logistics in Georgia. It will issue its report by December 31, 2019.

Along with Chairman Tanner, co-signers on the legislation include Appropriations Chairman Terry England (R-Auburn), Representative Brian Prince (D-Augusta), Representative Brett Harrell (R-Snellville) and Representative Vance Smith (R-Pine Mountain).

Conclusion

All in all, the 2019 legislative session featured a few bipartisan successes—teacher pay raises and sexual assault evidence preservation—but was, for the most part, consumed by highly controversial partisan battles, including abortion and voting rights. Going into 2020, expect Republicans to shy away from similarly divisive legislation in an effort to protect suburban members while pushing forward on transportation, mental health and school choice. Finally, keep an eye on two wild cards: gambling and marijuana. Will the state consider additional changes to marijuana laws and permit gambling or will social conservatives continue to halt such efforts? Tune in January 2020 to find out.

Survey of TN Political Insiders Offers Glimpse Into Most Influential Policy Shapers

Ed. note: The following survey and analysis comes by way of Dentons 50 partner Adam Nickas of Capitol Resources

Dentons 50 partner firm Capitol Resources conducted an anonymous survey on the news source, policy and advocacy organization preferences and habits of Tennessee policy insiders. The purpose of this survey was to discover what sources are considered most valuable and trustworthy by policy makers and shapers.

Survey recipients included state legislators and their staff, elected and appointed executive branch leaders and their staff, education officials from colleges and universities from across the state, municipal and local government leaders and registered lobbyists and organizations. While not inclusive of all policy organizations, the survey asked about twenty-five (25) specific statewide organizations and associations. 223 individuals responded to the survey.

In regards to exposure, 67% of participants indicated they regularly or often see or hear of the Beacon Center of Tennessee mentioned in connection with state or local policy issues. 63% indicated the same for the Tennessee Medical Association and 58.6% for the Tennessee Chamber of Commerce.

The Tennessee Medical Association (86%), Tennessee Chamber of Commerce (80%), Beacon Center of Tennessee (80%), and Tennessee Hospital Association (80%) were identified as being influential in the formulation and debate of public policy at either a high or moderate level.

Among those entities that are either regularly or often studied, cited, or utilized by policy insiders, Tennessee Medical Association (49.7%), Tennessee Hospital Association (37.58%), Tennessee Chamber of Commerce (36.95%), and Beacon Center of Tennessee (32.5%) came out on top.

“The economy, health care and public safety clearly dominate the policy conversation in Tennessee,” said Adam Nickas of Capitol Resources’ Tennessee office.

“These findings fall in lockstep with the priorities Governor Bill Lee has set forth.  His focus on criminal justice reform, decreasing health care costs, and increasing vocational training and workforce development will provide these organizations the opportunity of becoming more influential in shaping public policy moving forward.”

Capitol Resources, LLC is one of the most comprehensive and successful government relations firms in the country and offers the full spectrum of lobbying and public affairs services tailored to meet the needs of their diverse array of clients.  With offices in nine states and Washington, D.C., their clients include Fortune 500 companies, small businesses, mission-driven non-profits and key trade associations. Capitol Resources is part of the Dentons 50 Network. 

The survey was conducted from July to October of 2018.

FEC increases contribution limits for 2019-2020

The Federal Election Commission (FEC) updated the federal contribution limits for the 2019-2020 election. The new per election limits were effective January 1, 2019. Below is a chart that explains the new limits on each donor.

The chart above illustrates the new increased contribution limits to the respective donors. Individuals can now contribute $2,800 per election to a candidate, an increase of $100 from the 2018 cycle. This means that individuals may now give up to $5,600 per candidate per cycle (combined to include both the primary and general election limits). Due to changes in inflation, these limits are increased every odd-numbered year to balance out differences.

The contribution limit to national party committees can now contribute $35,500 per year, an increase of $1,600 from last year. The annual max contributions to the national party committee accounts have been increased to $106,500, an increase of $4,800.

Note that traditional PAC contributions are not indexed for inflation. This means that PAC contributions remain the same from 2018.

Newly elected state AGs outline enforcement priorities

Eighteen new state attorneys general will take office in 2019. There will be new AGs in Alaska, Colorado, Connecticut, Delaware, Florida, Hawai`i, Illinois, Maine, Michigan, Minnesota, Missouri, Nevada, New York, Ohio, Rhode Island, South Dakota, Wisconsin and Wyoming. Politically speaking, the impact of the 2018 midterm elections on the AG landscape was decidedly mixed, with Democrats flipping four AG seats previously held by Republicans, and the GOP maintaining their strongholds in Florida and Ohio. Overall, the midterms shifted the balance of state AG seats nationwide to a Democratic majority. Democrats now occupy 27 AG seats (including in Washington, DC) and Republicans, 24.

Companies should be aware that the newly elected AGs are expected to be as aggressive, or more so, than their predecessors. In Connecticut, for example, AG William Tong is succeeding AG George Jepsen, who led some of the largest bipartisan multistate investigations, including into opioid manufacturing and distribution, alleged price fixing in the generic drug market, and data privacy issues. Tong has signaled his intention to continue with these efforts, recently declaring: “I’ve always been activist in the legislature and I’m going to be activist as an attorney general because that’s what you need right now.”[

Other new AGs have started identifying their enforcement priorities. Some newly elected Democratic AGs have announced plans to investigate President Trump’s various business organizations. Others are targeting the administration’s policies. Illinois AG Kwame Raoul is challenging a recent ruling by a federal judge in Texas striking down the Affordable Care Act[, while Nevada AG Aaron Ford has indicated that he will reverse the course set by his predecessor, Republican Adam Laxalt, a staunch opponent of the ACA.

In Colorado, AG Phil Weiser, a Democrat, has outlined his intention to join a lawsuit against opioid manufacturers for allegedly misleading users as to the drugs’ addictive qualities, defend against federal overreach Colorado’s right to decide how it legislates and manages marijuana use, and protect consumers against financial scams. Minnesota AG Keith Ellison, a former Democratic congressman from the state’s 5th District, has pledged to address drug-pricing issues and allegations of anti-competitive activity in the nation’s agricultural sector. “We want to stand with Minnesotans against the big entities in this world as you are trying to make a go in this economy,” he recently told his constituents. “The middle class, I believe, is hanging on barely, and I think the attorney general ought to stand up against the fraudsters, against the monopolies, against these folks who would make your life so much more difficult to afford.”

New elected Republican AGs, for their part, are expected to continue their party’s stalwart defense of the Trump administration through the filing of amicus briefs in high-profile lawsuits challenging his executive orders and final agency actions. But they will also ramp up state enforcement actions in certain areas. For example, Ohio Republican AG Ted Yost is expected to continue his scrutiny of pharmacy benefit managers (PBMs), an industry that he focused on during his time as Ohio State Auditor.

State attorneys general will continue to combine their resources in an ever-growing number of multistate and multi-defendant investigations and civil and criminal enforcement actions, raising the stakes for both individual companies and entire industries. In addition to the issues the AGs campaigned on in the midterm elections, there’s no telling what new issues they will involve themselves in, given the unpredictability of the Trump administration. More relevant to assessing and addressing a business’s regulatory risks is understanding the scope of a particular AG’s authority, its level of activity and the political dynamics framing its choices.