Georgia Chief Justice Harold Melton Issues Statewide Judicial Emergency Order

The different branches of the Georgia State Government are moving in quick succession to try to respond to the coronavirus pandemic. On Thursday, the General Assembly indefinitely suspended its Regular 2020 Session. On Friday, Governor Kemp declared a State of Emergency giving him broad powers to combat the health care crisis. 

Georgia Chief Justice Harold Melton has now issued a thirty day ORDER DECLARING STATEWIDE JUDICIAL EMERGENCY. Essentially, the order reduces but does not shut down court actions, gives litigants relief during this period of time from responding to statutory deadlines, and provides greater flexibility to judges in how to conduct court business. 

Pursuant to OCGA § 38-3-61 & 62, Justice Melton suspended, tolled, extended, and otherwise granted relief from any:

(1) statute of limitation; (2) time within which to issue a warrant; (3) time within which to try a case for which a demand for speedy trial has been filed; (4) time within which to hold a commitment hearing; (5) deadline or other schedule regarding the detention of a juvenile; (6) time within which to return a bill of indictment or an accusation or to bring a matter before a grand jury; (7) time within which to file a writ of habeas corpus; (8) time within which discovery or any aspect thereof is to be completed; (9) time within which to serve a party;

(10) time within which to appeal or to seek the right to appeal any order, ruling, or other determination; and (11) such other legal proceedings as determined to be necessary by the authorized judicial official.

Justice Melton, however, recognized that certain “essential” court functions need to continue including:

(1) where an immediate liberty or safety concern is present requiring the attention of the court as soon as the court is available; (2) criminal court search warrants, arrest warrants, initial appearances, and bond reviews; (3) domestic abuse temporary protective orders and restraining orders; (4) juvenile court delinquency detention hearings and emergency removal matters; and (5) mental health commitment hearings.

Justice Melton also expressly ordered that criminal trials that were going on with an empaneled jury were to continue absent a showing of “good cause” to suspend or declare a mistrial. The order is silent as to ongoing civil trials presumably leaving these trials to the discretion of the presiding judge hearing the case. Finally, to the extent court proceedings are held, he ordered “they should be done in a manner to limit the risk of exposure, such as by videoconferencing, where possible.”

Within Georgia law, there are additional procedures in place to permit appeals where individuals believe this emergency order creates abuses to an individual’s legal rights. If you have any specific questions or concerns please let us know and we will follow up with further information. 

Stay up-to-date with all of Dentons’ insights and guidance by visiting our US COVID-19 hub here.

Georgia Governor Brian Kemp Declares State of Emergency To Deal With Coronavirus Pandemic And Calls a Special Session of the General Assembly

Georgia Governor Brian Kemp yesterday declared a State of Emergency in order to respond to the coronavirus pandemic and called the Georgia General Assembly back into a Special Emergency Session on Monday, March 16, 2020 at 8:00 am to ratify his action.  This action occurred only a day after the General Assembly had suspended indefinitely its regular 2020 session due to the world wide coronavirus outbreak.

Under O.C.G.A. §38-3-51 the Governor can declare a state of emergency due to a health crisis but must also call the General Assembly into a special session “for the purpose of concurring with or terminating the public health emergency.”  The state of emergency remains in effect for 30 days unless expressly extended by the Governor.

Among the powers enumerated by O.C.G.A. §38-3-51, the state of emergency gives the governor considerable power to deal with our present health care crisis including:

  • assume direct operational control of all civil forces and helpers in the state;
  • Suspend any regulatory statute prescribing the procedures for conduct of state business, or the orders, rules, or regulations of any state agency, if strict compliance with any statute, order, rule, or regulation would in any way prevent, hinder, or delay necessary action in coping with the emergency or disaster;
  • Utilize all available resources of the state government and of each political subdivision of the state as reasonably necessary to cope with the emergency or disaster;
  • Compel a health care facility to provide services or the use of its facility if such services or use are reasonable and necessary for emergency response. The use of such health care facility may include transferring the management and supervision of the health care facility to the Department of Public Health for a limited or unlimited period of time not extending beyond the termination of the public health emergency;
  • transfer from any available fund in the state treasury such sum as may be necessary to meet the emergency or disaster; and
  • provide welfare benefits to the citizens of this state in the form of grants to meet disaster related necessary expenses or serious needs of individuals or families adversely affected by an emergency.

Furthermore, in regards to the Department of Public Health, O.C.G.A. §38-3-51 (i)(1)  give the governor the power to direct the department to undertake the following:

  • Planning and executing public health emergency assessments, mitigation, preparedness response, and recovery for the state;
  • Coordinating public health emergency responses between state and local authorities;
  • Collaborating with appropriate federal government authorities, elected officials of other states, private organizations, or private sector companies;
  • Coordinating recovery operations and mitigation initiatives subsequent to public health emergencies;
  • Organizing public information activities regarding state public health emergency response operations; and
  • Providing for special identification for public health personnel involved in a public health emergency.

Under this emergency authority, the Georgia Department of Public Health has regulations in place authorizing it to do the following:

  • Isolate persons infected with communicable diseases or conditions likely to endanger the health of others, until they are found to be free of the infectious agent or disease;
  • Quarantine persons exposed to, or reasonably suspected of having been exposed to, a communicable disease, until they are found to be free of the infectious agent or disease;
  • Require surveillance, including the active and direct active monitoring of carriers of disease and persons exposed to, or reasonably suspected of having been exposed to, a communicable disease, until it is determined that they no longer pose a threat of spreading disease;
  • Require persons to be vaccinated or immunized, examined, and treated;
    • Except as provided in subsection (2) below, an individual shall be exempt from vaccination or immunization if the person, or the parent or legal guardian in the case of a minor, furnishes an affidavit that complies with DPH Rule 511-2-2-.07.
    • The Department may require vaccination or immunization of those who object on the grounds of religious beliefs if it is determined that an epidemic or the threat of an epidemic exists;
  • Restrict travel into or within the state;
  • Limit or cancel public gatherings; and
  • Close, evacuate, or decontaminate any facility, or destroy or decontaminate any contaminated materials, that the Department reasonably suspects may pose a danger to public health.

Ga Comp. R. & Regs. 511-9-1-.03

Within Georgia law and state regulations, there are additional procedures in place to implement and enforce these broad emergency powers and prevent abuses.  If you have any specific questions or concerns please let us know and we will follow up with further information. 

Georgia Legislative Update – March 9, 2020

Overview

In the midst of the state’s 2020 legislative session, Georgia has joined eighteen other states with confirmed cases of the COVID-19 virus, commonly known as coronavirus. Leading the state’s response to the outbreak are Department of Public Health Commissioner Kathleen Toomey and Governor Brian Kemp’s 18-member coronavirus task force. The Governor has stressed that the risk to Georgians remains low but that he does expect additional cases. 

Meanwhile the state legislature has been hard at work moving bills through the legislative process with an eye to March 12, when bills must cross over from one legislative chamber to the other or they will no longer be under consideration. 

Budget

The Senate voted to approve a midyear budget that supports many of the same appropriations adopted by the House of Representatives. Both the Senate and House departed from the Governor’s proposals. Specifically, both chambers opted to restore funding for public defenders, food safety inspectors, accountability courts, Morehouse and Mercer medical schools, and county public health departments. 

Lawmakers will now turn their attention to the Governor’s proposed $28.1 billion budget for FY 2021. That budget includes $300 million in spending cuts as well as pay raises for teachers and state employees earning less than $40,000 per year. Notably, several high-ranking members of the House, including Speaker David Ralston (R-Blue Ridge), have expressed a preference for cutting income taxes over raising teacher pay. 

Elections 

Two bills that would alter the way Georgians vote, both with Republican backing, are under consideration this session. The first, Senate Bill 463, would require election officials to take action to address long lines on election day. Specifically, the proposal, which is supported by Secretary of State Brad Raffensperger, states that if lines last more than one hour, county election superintendents would have to split up precincts that have more than 2,000 voters, provide additional voting equipment or hire extra poll workers in the next general election. The legislation also gives election officials greater latitude to provide more voting machines in the event of long lines. 

The other elections bill, House Bill 520, would give cities and counties the option to move local general elections from May to November to take advantage of the increased turnout that results from national election cycles. 

Education 

Backed by Gov. Kemp and State School Superintendent Richard Woods, Senate Bill 367, which would reduce the total number of mandatory tests in Georgia’s public schools to 19 from 24, passed the Senate last Monday. The legislation, which passed the Senate 53-0, cuts four tests from high school and one from the fifth grade. The legislation now heads to the House of Representatives. 

The House and the Senate have agreed on a legislation to limit state-funding college courses for high school students to 30 credit hours. The change to the popular dual enrollment program was spurred by increased costs as enrollment increased. House Bill 444 will now to go the Governor for his signature. 

The Senate Education and Youth Committee voted in favor of a piece of legislation, Senate Bill 386, that would expand Georgia’s only private school voucher program. The program aimed at special needs students would be expanded to include students with 504 plans which applies to students with disabilities that do not require special instruction given to students identified under the Disabilities Education Act. 

Senior care 

Prompted by an Atlanta Journal-Constitution investigative report on the state of senior care in Georgia, House Bill 987 passed the full chamber by a vote of 160-1. The legislation, which is sponsored by Rep. Sharon Cooper (R-Marietta), would expand the regulation of senior care facilities and increase fines for violations causing serious physical injury to, or the death of, a resident. Specifically, the bill would (i) require administrators who run assisted living facilities or large personal care homes to receive special training and licenses; (ii) require special certification for memory care units; and (iii) double the minimum fine where a home is cited in relation to death or serious harm. 

Tax credits

State tax credits have become a topic of conversation under the Gold Dome after several reports questioned the economic benefits of the film tax credit, an economic incentive credited with sparking the robust film industry in Georgia. One piece of legislation, House Bill 1037, sponsored by Rep. Matt Dollar (R-Marietta) would require every film production to be audited and would only award tax credits after the audit process is complete. The legislation would also expand the tax credit to include companies that broadcast non-recurring sports events with an economic impact of $50 million or more, such as Super Bowls and the NCAA Final Four basketball tournament. The House Ways and Means Committee has yet to take action on the bill. 

Meanwhile, House Ways and Means removed from the books a tax break that gave credits to employers that hired parolees. According to Chairman Brett Harrell (R-Snellville) the credit was going unused. 

Further scrutiny of tax credits could intensity if Senate Bill 302 by Sen. Jon Albers (R-Roswell),  which passed the Senate unanimously and is currently awaiting action by the House Ways and Means Committee, passes the full House. The bill would permit the chairmen of the House and Senate tax committees to request independent economic-impact reviews of a few tax credits a year. 

Tort reform

A major battle is brewing between the business and legal communities, specifically the Georgia Trial Lawyers Association, over a renewed fight over tort reform. State Senator Steve Gooch (R- Dahlonega) introduced two tort reform bills, Senate Bill 390 and Senate Bill 415. The former was assigned to the Senate Judiciary Committee and the latter to the Insurance and Labor Committee. Several trial lawyers are members of the Senate Judiciary Committee, so the hopes of the business community most likely lie with SB 415. 

One provision of SB 415 would prevent trial lawyers from arguing the monetary value of a victims pain and suffering or, in a wrongful death case, the value of a life. Additionally, the bill would make changes to premises liability in cases where someone is attacked on a property owned by a business or an individual and then sues the owner for not doing enough to prevent the crime. In such cases, the victim would be entitled to damages only when the landowner “had actual knowledge of the specific threat of imminent harm” and could have reasonably prevented it. 

Transportation 

The Senate approved a bill that (i) offers farmers a state income tax exemption on disaster relief aid and (ii) includes a 50-cents-per-ride tax on rideshare companies such as Uber and Lyft, taxis and limos to fund rural transit expansion. The per-ride tax, which will fund rural transit expansion. which will take effect on April 1, would replace the sales tax on rideshares and taxis. House Bill 105 which was adopted in the Senate by substitute will now return to the House for further consideration. 

Alcohol Delivery 

House Bill 879, sponsored by Rep. Brett Harrell (R-Snelville), which would permit home delivery of beer and wine so long as it is delivered to a person who would have to provide ID showing he/she is of legal age. The measure passed the House Regulated Industries Committee and is awaiting a full vote by the House of Representatives. 

Health care

House Bill 888 passed the House of Representatives by a vote of 164-4. The legislation aims to protect patients from having to pay bills after receiving care at a hospital that is in their insurance network. These bills are currently sent to patients in the event they saw a contract doctor who is out of network at a hospital where they are covered. In such cases, the insurance company and the provider would be required to sort out the payments through arbitration. 

Additionally, the full House passed House Bill 789, which requires insurance companies to maintain an online directory of anesthesiologists, pathologists, radiologists and emergency medicine doctors that are covered by their plans. 

In addition to surprise billing, legislators are looking to make changes to the pharmacy industries, specifically pharmacy benefit managers which act as middlemen between insurance companies, pharmaceutical companies and consumers. House Bill 946 would increase oversight on the industry and bar managers from charging an insurance company more for a drug than it cost from a pharmacy. The Senate passed SB 313 a nearly identical bill on Thursday. Another bill, House Bill 947, would allow the state to study the financial impact of removing pharmacy benefit managers from its Medicaid plan entirely. 

Maternal Mortality 

Republican House leaders are getting behind an effort to authorize the Georgia Department of Community Health to seek a federal waiver to expand Medicaid from two to six months following childbirth to address postpartum depression, high blood pressure and cardiac conditions.  

Conclusion

The legislature is speeding toward Crossover Day on March 12, when legislation under consideration has to pass at least one chamber or it is no longer eligible to pass into law this legislative session. As such, we expect a flurry of activity this week prior to the Thursday deadline.  Meanwhile, the Governor and the coronavirus task force continue to monitor the situation in Georgia and have committed to continuous sharing of information with the public.

Georgia Legislative Update – February 27, 2020

Overview

After a short break prompted by disagreements over the midyear budget, the Georgia General Assembly is back in session. In addition to appropriating taxpayer dollars, legislators are mulling legislation on sports betting, surprise medical billing, foster care, prescription drug prices, senior care,  and higher education admissions.

Budget

The House of Representatives approved the amended midyear budget last Wednesday with a host of changes from the Governor’s recommendation which was compiled after asking many agencies to cut 4 percent off of the budget passed last session. The largest chunk of savings in the Governor’s proposal came from the elimination of 1,200 vacant state government positions, many of which the legislature created in recent years to address important issues and which the legislature maintains remain valuable and necessary to citizen welfare. Under the House budget many of the positions would be retained, including food safety inspectors, crime lab scientists and public defenders. Those retentions came after testimony from agency heads who warned of the negative consequences of preemptive staffing cuts. For instance, Agriculture Commissioner Gary Black cautioned lawmakers that there would be fewer food and meat inspections if Governor Kemp’s proposal to eliminate vacant positions was approved.

House appropriators also rejected Kemp’s proposed cuts to accountability court funding after Taylor Jones, executive director of the Council of Accountability Court Judges (CACJ), told lawmakers that 336 fewer people would be able to participate in the diversion program if the agency’s budget were to be cut by 4 percent. The program, which diverts substance abusers and the mentally ill away from the criminal justice system, is a prized accomplishment of former Governor Nathan Deal.

The House also reduced cuts that Governor Kemp proposed for autism treatment, county public health departments, local libraries, the Morehouse School of Medicine and the Rural Health Systems Innovation Center at Mercer.

The amended FY 2020 budget is now in the Senate for consideration while the House will restart the process with the FY 2021 budget. The main point of contention in the FY2021 budget, at this point in the process, is the $2,000 teacher pay raise included in the Governor’s proposal, an issue he campaigned on in 2018. House Speaker David Ralston (R-Blue Ridge) has made it clear he is not opposed to raising teachers’ pay, but that it may have to be accomplished another year. Instead, House Republicans are focused on passing the second half of an income tax rate cut initiated in 2019. Their intention to reduce the top income tax rate to 5.5 percent from 5.75 percent, would cost the state an estimated $615 million in revenue according to the normally left leaning Georgia Budget and Policy Institute.

Foster care

Governor Kemp and Lt. Governor Geoff Duncan are pitching their focus on improving the foster care system as a moral imperative for pro-life Republicans. The Governor and his floor leaders have introduced several bills that address the state’s adoption system.

House Bill 912 would allow foster parents to leave children in the care of a babysitter for up to three days without having to get approval from the state Division of Family and Children Services (DFCS). Current law limits that time to two days.

House Bill 913 would drop the age requirement for potential adoptive parents to 21 from 25.

Senate Bill 335 would require judges to prioritize court cases involving children in foster care and asks juvenile courts to better track those cases. It would also allow DFCS to vary the amount of training time foster parents are required to undergo annually based on their experience level.

Health care

Legislators are considering bills to address prescription drug prices, surprise billing and the teen vaping epidemic.

Senate Bill 313, sponsored by State Sen. Dean Burke (R-Bainbridge), aims to shed light on prices that pharmacy benefit managers (PBMs) negotiate with pharmaceutical companies and pharmacies. It would make PBMs track their prices against a federally approved drug price list and report when they vary too much. The bill would also require PBMs to share more information with state regulators so they can investigate complaints.

Two surprise billing efforts, House Bill 888 and Senate Bill 359, aim to protect patients from having to pay bills after receiving care at a hospital that is in their insurance network. These bills are currently sent to patients in the event they see a contract doctor who is out of network at a hospital where they are covered. In such cases, the insurance company and the provider would enter into arbitration to sort out the payments.

To address a sharp increase in teen vaping, lawmakers are considering House Bill 864, which would require a license to sell e-cigarettes and add a 7 percent tax on their sale. Opponents argue such a change would mean that vaping would be taxed at a higher rate than traditional cigarettes, which are significantly more harmful.

Education

The Senate Higher Education Committee last week heard Senate Bill 282, sponsored by Sen. Brandon Beach (R-Alpharetta), which would require the University of Georgia, Georgia Tech, and Augusta and Georgia State Universities to set aside 90 percent of their early-applicant slots for state residents. The committee has not yet taken a vote on the bill.

Democrats are pushing another bill aimed at higher education that would allow immigrants with temporary status to pay in-state tuition at any of the state’s public colleges and universities. House Bill 896 would make the change for students (i) who were enrolled in a Georgia high school for at least three years; (ii) are seeking full legal immigration status; and (iii) have a high school diploma or GED. The bill does not have any Republican sponsors.

Senate Bill 367, backed by Gov. Kemp and School Superintendent Richard Woods, would reduce to 19 the total number of mandatory tests in Georgia’s public schools. There are currently eight state-mandated tests: two each in math, English, science and social studies. The bill would reduce that to one test per topic.

Senior care

After an Atlanta Journal-Constitution report exposed deep flaws in many senior care facilities in the state, legislators are looking to impose additional oversight. Reps. Sharon Cooper (R-Marietta) and John LaHood (R-Valdosta) are working together on legislation that would require senior care homes to provide more financial information to regulators and would increase fines on facilities that run afoul of safety regulations. It would also increase the minimum number of staff required. For instance, memory care units would be required to have at least one direct care staff member for every 12 residents at all times.

Criminal justice reform

Reps. Mandi Ballinger (R-Canton) and Gregg Kennard (D-Lawrenceville) are both supporting an effort to allow those convicted of certain misdemeanors and felonies to request sealed records so a prospective employer or landlord would not be able to access them. Whether the request would be granted would depend on the severity of the offense and the offender’s age when the crime was committed.

Coal ash

The concern over coal ash disposal reached a fever pitch this week as residents of Juliette, GA, traveled to the state capitol to talk to legislators about contaminants in their water supply as a result of old, leaky unlined coal ash ponds at Plant Scherer, one of the nation’s largest power plants. There are several bills addressing the issue, including House Bill 93, which would require public notice when wastewater is being drained from coal ash ponds into local waterways; Senate Bill 123, which would reduce imported coal ash; and House Bill 756, which would require coal ash to be disposed in lined pits.

Sovereign immunity

Rep. Welch (R-McDonough) is leading an effort to allow citizens to file lawsuits against the state to challenge unconstitutional laws. House Resolution 1023 would put a referendum on the statewide ballot asking whether to void the constitutional doctrine of sovereign immunity, which bars lawsuits against the government. To pass, the resolution will need to be approved by at least two-thirds of both the House and the Senate, and a majority of the public, determined at the ballot box.

Tax credits

Senate Bill 302 by Sen. Jon Albers (R-Roswell), which would permit chairmen of the House and Senate tax committees to request independent economic-impact reviews of a few tax credits a year, passed the Senate unanimously. A previous effort to set up tax break reviews was vetoed by the Governor.

Freight and Logistics Commission

House Bill 820, sponsored by Rep. Kevin Tenner (R-Dawsonville), passed the House of Representatives on Monday. The bill creates a permanent line item in the state budget for badly needed rail investments. The legislation, a recommendation of the Georgia Freight and Logistics Commission, does not come with appropriated funds but is intended to lead to future investments. The Commission would be extended to December 2020 should House Resolution 935 gain approval of the Senate after passing the House in earlier this month. 

Conclusion

With the amended 2020 budget moving over to the Senate and House consideration of the 2021 budget in full swing, a host of policy issues are coming to the forefront. Whether it be health care, education or coal ash the General Assembly is focused on everyday issues and thus far has not waded deep into divisive social issues that could threaten incumbent Republicans in swing districts. Moving forward, watch for representatives and senators to continue to emphasize legislation that will resonate with voters come November.

Georgia Legislative Update – February 6, 2020

Overview

The Georgia Legislature has been in session for twelve legislative days. Within that short time frame a wide variety of bills have been filed and top issues have begun to emerge, namely health care, transportation and taxes. However, hanging over any debate or specific issue legislation is a contentious budget process that has exposed fissures between Governor Brian Kemp and Speaker of the House David Ralston. Until the appropriations process progresses, don’t expect much legislation to catch the attention of leadership.

State Budget

The House Appropriations Committee and Republican Party leadership continue to sift through the Governor’s budget recommendations. Ultimately the General Assembly will deliver an appropriations bill that will stray from the Governor’s preferences in at least a handful of ways. A few issues will certainly be part of the discussion, the first being teacher pay raises. Governor Kemp campaigned in part  on a $5,000 pay raise for every public school teacher in the state. To finalize fulfilling that promise — a $3000 pay raise was appropriated last year —  the Governor will have to convince the General Assembly to approved the required funding to provide the final $2,000 bump this year. Speaker Ralston made it clear that the teacher pay raises, while laudable, were not his promise to voters. Instead, it appears that rural healthcare and agriculture programs are higher on the priority list for Speaker Ralston and his caucus.

In a dramatic move this week, the General Assembly changed its schedule and adjourned until February 18th to hash out the budget in hopes of coming to a compromise that can pass the General Assembly and earn the Governor’s signature. Such a long break in the middle of a session is unusual and underscores the tension between the Governor’s recommendations and the preferences of the State House of Representatives. As such, expect budget negotiations to dominate conversations under the Gold Dome until further notice.

Health Care

Medicaid Waiver: Public comment on Governor Kemp’s Medicaid waiver proposal is open until Friday according to the US Centers for Medicare & Medicaid Services. The Governor’s proposal would open Medicaid to a larger portion of indigent citizens but would not fully expand the program largely due to concerns over future cost. Under the waiver, Medicaid would be extended to those in need who also perform certain approved activities for 80 hours a month, like working at a formal job, including registered nonprofits, or pursuing higher education.

Ultimate approval of the waiver is not guaranteed. In fact, the USC-Brookings Schaeffer Initiative for Health Policy argues that the waiver does not meet the statutory or legal requirements of the program, a position that is disputed by the Kemp administration. Further complicating the matter is a recent push by the Trump administration to allow states to scale back Medicaid spending by converting to block grants thereby providing addition flexibility on coverage.

House Bill 789: In addition to the waiver, several health care issues have surfaced at the state legislature. One issue garnering a lot of attention is surprise medical billing. HB 789 attempts to bring transparency to medical billing generally. The bill would give patients more information about which doctors are in their insurance network through an online insurer portal. Ideally, this would allow patients to have a better idea of what services will be covered before they go to the hospital. However, the bill only covers four of the most common independent specialties: anesthesiologists, emergency doctors, pathologists and radiologists.

Senate Bill 293: Sen. Chuck Hufstetler (R-Rome) is pushing a bill that would stop surprise bills for all patients. However the Senator noted publicly that his bill is simply a starting point and he is open to working with others involved in the issue.

Senate Bill 303: Senator Ben Watson (R-Savannah) has introduced a bill to provide for greater price transparency for non-emergency health care services. The bill would require the disclosure of pricing information on insurer websites thereby allowing consumers to compare competitors.

Transportation

Senate Bill 159: The Senate passed SB 159 to take state government out of the debate surrounding electric scooters. The bill would leave regulation up to local governments while providing a definition of a scooter in state law. The bill defines a scooter as any device that weighs less than 100 pounds and is equipped with handlebars and an electric motor, human powered, or both, that is capable of a maximum speed of no more than 20 mph. The bill passed the Senate unanimously and has been passed over to the House of Representatives.

House Resolution 935: House Transportation Chairman Kevin Tanner (R-Dawsonville) introduced HR 935 to reauthorize the Georgia Commission on Freight and Logistics. The bill passed out of the House Transportation Committee on Thursday Jan. 30.

House Bill 820: Chairman Tanner also introduced HB 820 which would create a new line item in the budget of the Georgia Department of Transportation for freight rail appropriations. The money would be used for state investment in railways and railroad facilities and equipment.

House Bill 511: After passing in the house and then failing to cross the legislative finish line, HB 511 has been reintroduced by Transportation Chairman Tanner. The bill would create a division of transit and mobility innovation within the Georgia Department of Transportation to oversee eight regions outside of metro Atlanta and allow counties across the state to raise sales taxes for transit expansion. It would also impose a 50-cent excise tax on ground transportation rides per hire, and 25 cents on shared rides. The revenue from the tax would be dedicated to the new division and to the new metro Atlanta agency to pay for transportation pilot programs. Finally, the bill calls for up to three grants to companies that provide flexible transit services in multi-passenger vehicles. Each grant could be up to $500,000. The grants would cover services in metro Atlanta.

Taxes

House Bill 276: On Thursday, January 30th Governor Kemp signed House Bill 276: Marketplace Facilitator Act. The bill mandates online retailers to collect and remit state and local sales taxes. The new law will apply to internet businesses of all kinds including Amazon, Airbnb and Uber. The law goes into effect April 1.

Senate Bill 302: The Senate Finance Committee approved SB 302 by Senator John Albers (R-Roswell) which proposes a regular review of state tax credits. Specifically, the bill calls for review of five credits per year to determine actual return on investment. Copies of the analysis would be provided to the Senate and House budget offices.

Elections

House Bill 757: House Speaker Ralston has made it clear that HB 757 which would replace the planned jungle election for the Senate seat vacated by Republican Senator Johnny Isakson with a traditional primary followed by a general, would not impact the 2020 election but would instead mandate the change thereafter if passed and signed by the Governor. The bill, which was for a moment the focus of a proxy battle between supporters of Senator Kelly Loeffler and Representative Doug Collins, was sent back to committee.

Business Efficiency

Senate Bill 110: The Senate is currently debating SB 110 which would establish a statewide business court that would hear cases involving complex business litigation, mergers, high-level contract disputes, trademark litigation, securities litigation, typically between two or more businesses.  The version in front of the Senate is from the conference committee that came out of the 2019 legislative session.

Business Judgment Rule: Expect a bill to drop soon after the legislature reconvenes on February 18 to establish gross negligence as the standard of care by which the court could question the actions of officers and directors of non-profits, foundations and cooperatives. Currently the courts apply that standard to directors of Georgia banks and trusts and for-profit corporations. The impetus behind this legislation is to address the discrepancy between for-profit companies and non-profit organizations, eliminating a potential disincentive to serve as a non-profit officer or director.

Conclusion

In conclusion, at this point in the session the issues that will ultimately make it past cross-over day are, for the most part, unclear. Until the budget is settled and leadership is able to refocus on legislative priorities major legislation will be on the back burner. But don’t expect major changes to that status quo anytime soon. The difference of opinion between House Leadership and the Governor could make for a lengthy and contentious budget process.

Georgia Legislative Update – January 30, 2020

Overview

Unsurprisingly, the 2020 legislative session, still in its infancy, has been consumed by the General Assembly’s one constitutional obligation—passing a state budget—a task complicated by declining revenue and a Governor with clear (and expensive) priorities. Republican Governor Brian Kemp unveiled a $28.1 billion proposal for FY 2021 which reflects budget cuts for almost all state agencies. Since its release, the Governor has presented his priorities through appearances at budget hearings and his annual State of the State address. While the Governor’s recommendation has significant agenda setting power, it is simply a suggestion to the General Assembly, which ultimately has the power to appropriate state funds.

In addition to the budget a few legislative proposals have received attention thus far, including House Bill 276, adopted by the General Assembly and which makes changes to how sales taxes are collected from online purchases; a human trafficking bill promoted by the Governor; and an election bill that has the potential to upend the race for the US Senate seat currently held by Republican Kelly Loeffler, who was appointed by Gov. Kemp in December after Johnny Isakson announced he was retiring due to health reasons.

I. State budget

The Governor’s proposed budget aims to save about $200 million this fiscal year and $300 million next year, without negatively impact state services. The budget recommends reduced funding for a host of agencies and programs, including accountability courts, public defenders, county health departments and state Department of Agriculture initiatives. The majority of the reductions are funded by eliminating vacant jobs, about 1,200 of them according to The Atlanta Journal-Constitution. Those positions would include Department of Agriculture food safety inspectors and marketing staff, child welfare and program eligibility workers, agricultural extension employees, Georgia Bureau of Investigation lab scientists and technicians, juvenile justice security staff, and veterans affairs workers.

Notably, Gov. Kemp exempted from the budget cuts K-12 education, most college programs, Medicaid and funding for roads and bridges. Additionally, the Governor has been quick to point out it’s not all bad news. In fact, the budget includes additional funding for isolated schools, park/green space acquisition, lab equipment to test rural water systems, $51 million to state Department of Transportation for roadways, and $50 million in general obligation bonds to repair and replace bridges.

That being said, members of the General Assembly want to review all of the budget recommendations. As is tradition, the budget that is passed through the House and Senate will look drastically different than what is proposed by the Governor. As to what exactly the General Assembly will change, there are a few large buckets of spending to keep an eye on.

Education

The Governor’s budget includes the second half of the $5,000 pay raise he promised public school teachers during the 2018 gubernatorial campaign. Specifically, it allocates $362.2 million to provide a $2,000 pay raise for public school teachers (on top of the $3,000 approved last year. About half of that money comes from a reduction in what the state will need to put into the teacher pension system. In addition the proposed budget fully funds the QBE formula and includes $346 million in borrowing for K-12 school projects.

It should be noted that the teacher pay raise isn’t necessarily a done deal. In fact, Speaker David Ralston (R-Blue Ridge) said that the increase “was not my campaign promise.” The proposed raise is sure to face scrutiny amidst other cuts that rural legislators argue disproportionately harm their constituents.

Rural prosperity and agriculture

Rural-focused programs facing cuts include the Center for Rural Prosperity, a program cherished by Speaker Ralston and the Cooperative Extension Service and agriculture experiment stations, which would see reductions of $7.6 million next year. State Rep. Sam Watson (R-Moultrie) noted that he speaks with his local ag extension agent frequently and that the program has been essential to getting farmers through “the hurricanes, the disasters, the trade wars.”

The budget also eliminates funding for a rural water association and forest protection, and limits the Department of Agriculture’s ability to fill food safety inspection positions. 

Health care

Health care has been top of mind for legislators throughout the biennial legislative session, as demonstrated by last sessions Medicaid waiver bill, certificate of need reform battle and study committee on maternal health. Front of mind in each of these discussion was the rural health care crisis. Still in the early stages of the budget process, the cuts to health care services are alarming members of both parties, particularly as they relate to rural care.

One of the main points of concern surrounds proposed cuts in funding for county health department grants, including a $6.4 million cut in 2020 and a $9.24 million cut in 2021. That, combined with reductions to loan forgiveness for rural health care professionals, rural surgery initiatives and doctor training focused on rural care has sounded an alarm on the budget committees, which are dominated by rural lawmakers.

The cuts to the county health departments could be particularly damaging given that in many rural counties doctors are few and far between and a large portion of health-related services falls to County departments. Additionally, cuts to the Georgia Department of Behavior Health and Developmental Disabilities, which provides services to mentally unstable or addicted individuals, is proving to be a point of contention at the capitol. DBHDD Commissioner Judy Fitzgerald told legislators the safety net “is stretched to the max” and any cut in funding would lead to a disruption in services to the most vulnerable. Her passionate presentation left a mark on lawmakers, many of whom are concerned with the significant increase in mental health and substance abuse problems in the state.

Criminal Justice

One aspect of the budget Gov. Kemp is keen on bolstering are programs to address violent crime. The budget designates $2 million to increase staff resources for the GBI Gang Taskforce to dismantle gang and human trafficking operations, $3 million for the recruitment and retention of state prosecutors and $435,182 for State Inspector General Deborah Wallace to address sexual harassment complaints.

In addition to bolstering law enforcement efforts, Gov. Kemp’s budget proposal cuts funding to accountability courts, a core element of former Gov. Nathan Deal’s criminal justice reform package. These courts are geared to drug addicts, veterans and the mentally ill, who have mostly been charged with nonviolent or low-level offenses, directing them toward help and away from prisons.

A University of Georgia study found that the roughly 1,700 people who graduated from accountability courts in 2017 saved the state nearly $5,000 per person when compared with the cost of incarceration.

Many judges, including Georgia Supreme Court Chief Justice Harold Melton, have been critical of the decision. Melton warned that “you may be directing people to more expensive and less efficient alternatives.” This argument has been echoed by others who worry that short-term cuts to the program will lead to more substantial long-term financial commitments from the state. In addition to cutting funding for the accountability court program the Governor has proposed reducing spending on Georgia’s public defender network by $3.5 million.

II. Online retailers tax

Prior to fully diving into the budget process, the General Assembly was able to pass House Bill 276. The bill, which would put the burden of tax collection on online retailers, seeks to collect sales tax from online and third-party platforms selling retail products, thus leveling the playing field for Georgia-based brick-and-mortar retailers and increasing revenue for the state. After the bill almost passed last year, a conference committee was appointed from the House and Senate which produced a compromise bill that was approved by both chambers.

Unsurprisingly, the passage of the bill has now been incorporated into budget considerations. State Rep. David Knight (R-Griffin) asked Kelly Farr, the Director of the Governor’s Office of Planning and Budget, if the governor had considered raising the estimate of tax collections for next year to account for new sales tax money coming in from Internet- and app-based companies. A higher estimate of what lawmakers could spend would allow lawmakers to curb some of the spending cuts. 

Farr told lawmakers that he would advise against relying on estimates of how much a new tax bill would bring in.

III. Income tax

In 2018, state lawmakers reduced the state income tax rate to 5.75 percent from 6 percent, with a plan to reduce it again this year, to 5.5 percent. However, due to declining revenues and questions regarding the political benefit of another cut, many under the Gold Dome are rethinking the plan. In fact, State Senate Finance Chairman Chuck Hufstetler (R-Rome) threw cold water on the idea, saying “I don’t see the math there right now”. Notably, the Governor did not include the tax cut in his budget so lawmakers would have to find the money themselves should they want to move forward.

IV. Human tracking

Gov. Kemp is promoting new legislation to address human trafficking that will be carried by State Reps. Houston Gaines (R-Athens) and. Ed Setzler (R- Acworth) and State Sen. Brian Strickland (R-Stockbridge). The legislation has three elements. First, it would require people convicted of some trafficking crimes to register as sex offenders. Second, it would ban convicted sex traffickers from holding a commercial driver’s license if they are convicted of using a commercial vehicle to commit the offense. And third, it would make it easier for victims to restrict access to their criminal records or secure a judicial order that sets aside judgments issued for those who were wrongly convicted.

V. Election-qualifying

What would usually be a mundane housekeeping bill has the potential to shake up the race for Georgia’s US Senate seat currently held by Sen. Loeffler. House Bill 757 primarily clarifies the right of the Secretary of State to set an early-March qualifying date for candidates, Democratic and Republican, that would like to challenge Sen. Loeffler. Interestingly, House Minority Leader Bob Trammell (D-Luthersville) went public with a proposal, aimed at friends and supporters of US Rep. Doug Collins (R), to amend the bill so that instead of a jungle election that would probably lead to a run-off (which Republicans historically over the past 30 years have won), there would be two traditional party primaries and then a general election. Somewhat unexpectedly, that amendment was added and, this morning, the bill passed out of the House Governmental Affairs Committee. Gov. Kemp is strongly against any the change. However, Rep. Collins, a former Georgia House member, is close to both Speaker Ralston and other influential Republicans. It is possible, yet unlikely, that an interparty spat could evolve and ultimately alter the national political landscape by increasing the chances that Rep. Collins, who is expected to enter the race against Loeffler, is able to prevail in a party primary.

Conclusion

Until proven otherwise, in 2020, the budget is king. The Governor has made his priorities clear: teacher pay raises, infrastructure, curbing gang violence and tackling human trafficking. Now it is up to the General Assembly to determine where, if at all, its priorities line up with those of the Governor and how far it is willing to go in irking a Governor with a sky-high approval rating state-wide.

Georgia Legislative Preview 2020

Overview

Georgia’s state legislators reconvene today for the second 40-day session of the 155th Georgia General Assembly. With an impending election in November 2020, Georgia representatives and senators on both sides of the aisle, especially those with difficult reelection campaigns ahead, are likely to judiciously avoid controversy. As such, don’t expect as contentious a session as we saw last year, when the legislature passed abortion restrictions and reforms to the state’s certificate-of-need process, while also considering a state takeover of Atlanta’s airport. That being said, there is plenty to prepare for as legislators head back to Atlanta.

Top of mind for the Republican majority will be issues that Governor Brian Kemp has explicitly identified as priorities, including tougher penalties for violent offenders and human traffickers, a crackdown on gang violence, loosening adoption regulations and finalizing the $5,000 teacher pay raise he promised during the 2018 campaign. In addition to the Governor’s priorities, here are a few topics to look out for in 2020:

State budget

Facing declining revenues and an outstanding promise to teachers to deliver the final $2,000 of the $5,000 pay raise Governor Kemp promised throughout the 2018 gubernatorial campaign, the Governor is tasking state agencies with finding inefficiencies and cutting costs rapidly. Specifically, the Governor instructed most state agencies to reduce spending by 4 percent in the current 2020 fiscal year and by 6 percent in FY2021. The cuts are aimed at shrinking the size of government, preparing for the possibility of a recession and finding funding for the Governor’s priorities in light of shrinking state revenue. Notably, the burden of the cuts will fall on just a handful of agencies, as three-fourths of state spending is exempt from the directive, including funding for education, Medicaid and transportation infrastructure.

Achieving a balanced budget is the only constitutional responsibility of the General Assembly, and given the restraints put on state agencies by the Governor expect the budget process to take up a large portion of the legislature’s time in 2020.

Tax cuts

In 2018, the legislature voted to reduce the state income tax rate by .25 percent—from 6 percent to 5.75 percent. The cut, along with declining federal revenues, contributed to lower overall state revenues. The 2018 cut was only a first step in what was originally intended to be a cut of .5 percent. The second reduction is now up for consideration. The General Assembly will debate lowering the income tax rate to 5.5 percent. However, given the well-known revenue problem it is unclear whether the measure will pass. Governor Kemp told the Marietta Daily Journal that it “depends on if there’s legislative support for that and how we would structure the budget.”

Health care

Health care was a top priority of the General Assembly last session and it remains a hotly debated policy issue going into the 2020 session. In 2019, the General Assembly gave the Governor the power to pursue a Medicaid waiver to set up a Georgia-specific process for insuring low-income citizens. Notably, the new waiver program will require a significant budget line in what is an already jam-packed state budget. In addition, last year the legislature implemented changes to the certificate of need (CON) process that regulates hospitals in the state. Smaller CON reforms may arise again as reform proponents try to build on their momentum in a changing state health care environment.  

Finally, Lt. Governor Geoff Duncan is wrapping up a blue-ribbon panel on lowering the cost of healthcare that has been particularly interested in how technology can lower delivery costs and expand access to rural Georgians. The Lt. Governor is likely to support Senate legislation that comes out of the panel focused on telemedicine, health information technology and data sharing.  Similar House and Senate study committees will likely produce legislation focusing on issues involving maternal mortality, indigent care, patient access and patient billing.

Tax credits

Senator Lindsey Tippins (R) is leading the crusade against ineffective, unproductive and inefficient tax credits as a mechanism to avoid budget cuts. Sen. Tippins is looking at many existing tax credits, including the film tax credit, which has been credited by Republicans and Democrats alike for sparking what is now a thriving film industry in the state. However, the actual economic impact of that tax credit is challenged by a recently released state audit. The audit concludes that the state is not getting as much return on investment as previously thought.

In regard to the budget, Sen. Tippins believes that Georgia doesn’t have a spending problem but rather an income problem and has cited tax credits as one of the best options for raising revenue. It is unlikely that the film tax credit will be fully repealed, but minor changes will garner significant support. Two interesting features of the credit, pointed out by the Atlanta Journal-Constitution, are likely to be points of discussion: first, there is no cap, and second, the credits are transferable. The ability to transfer tax credits has sparked a secondary market which has allowed companies unrelated to the film industry to avoid paying taxes by purchasing credits from the film industry.

Thus far, Governor Kemp has remained neutral in the debate over the film tax credit.

Gambling

Legalized gambling, sports betting and horse racing, like all other issues this session, are now being viewed through the lenses of revenues and expenditures. Legalized gambling is seen as a potential moneymaker for the state government, a source of revenue to shore up the HOPE scholarship and pre-K programs and potentially address other critical issues, such as health care.

That is why proponents, both in the legislature and the gaming industry, see new energy around this issue. This energy was supported by the creation of two special legislative study committees, one in the House and one in the Senate, which held hearings this past fall to consider whether to make a real push in the 2020 legislative session to legalize casino gaming, pari-mutuel wagering and sports betting in Georgia. Casino gaming and pari-mutuel wagering are currently prohibited by the Georgia constitution. While there are some that believe a constitutional amendment may not be necessary to make sports betting legal, that the legislature would only need to pass a law, the General Assembly’s Office of Legislative Counsel has admitted this is a grey area and has recommended the pursuit of a constitutional amendment to avoid years legal battles. 

The most likely course of action for any new form of gambling is that a constitutional amendment would be pursued, which would require a two-thirds vote in both chambers to pass, as well as approval from the public via a referendum. Notably, enabling legislation is not required to accompany the amendment, but some legislators may push for such legislation before the referendum phase.

Governor Kemp, who has historically opposed gambling, has noted that constitutional amendments are veto-proof so should the legislature and Georgia voters support such an amendment his personal opinions would be irrelevant.

Tort reform

Conservative business interests, including the Georgia Chamber of Commerce, are making tort reform a priority this session. They aim to remove legal roadblocks in an area of the law they see as favoring individuals over businesses. It is possible that lawmakers will base legislation on a Tennessee tort reform law that caps punitive and noneconomic damages.

Conclusion

In sum, in 2020, the budget is king. Almost every piece of legislation will be weighed against budgetary concerns as lawmakers remain on high alert to declining revenues and an economic expansion that, some believe, must come to an end in the near future. Moreover, upcoming elections will likely tamp down talk of highly partisan issues, such as a state takeover of ATL and religious freedom legislation. However, like every legislative session, the unexpected is inevitable. Stay tuned.