GCC Legislative Update 4/7/2010

We still have a mess at the Capitol.  With only six legislative days left to work.  The one issue that the legislators are constitutionally required to do—adopt a budget--is not close to being resolved.  Although many expected the FY 2011 budget to pass the House this week, the House Appropriations Committee is still in a holding pattern. The current version of the House proposal is contingent upon the passage of a couple of revenue enhancing measures in the Senate that passed the House on Crossover Day. At the close of Day 33, the Senate passed one of those measures. Passage of these bills is crucial for the House to move the budget based on revenue numbers being projected.  On Thursday, legislators completed day 33 of their 40-day session. The General Assembly will now stand in recess for the next week and will reconvene for day 34 on Monday, April 12th.

Issues of concern

HB 1405, sponsored by Ways & Means Chairman Larry O’Neal, Speaker David Ralston, Majority Leader Jerry Keen, and Speaker Pro-Tempore Jan Jones, has passed the House and easily cleared the Senate Finance committee and now heads to the Senate floor.  This bill creates a “Council on Tax Reform and Fairness”, and a “Special Joint Committee on Georgia Revenue Structure.” HB 1405 could have far-reaching consequences. With Georgia’s budgetary crisis, key leaders have made it plain that all issues are under consideration with respect to revenue generation and structure.  GCC is working with other industry groups to develop a plan of action to be engaged in this process.  The study requirements of this measure could expose industry to losing some valuable sales tax exemptions, but it will also provide a forum to present our urgent need to have energy exempt.

The proposed Council will conduct a thorough study of Georgia’s current revenue structure and report its findings and recommendations to the Speaker of the House and the Lieutenant Governor no later than next January. It will consist of 11 members:

3 economists-

Dr. Jeffrey Humphreys, University of Georgia

Dr. Roger Tutterow, Mercer University

Dr. Christine Ries, Georgia Institute of Technology

Governor Sonny Perdue

Former Governor, Lt. Governor, & U.S. Senator Zell Miller

2010 Chairman, Georgia Chamber of Commerce

2010 Georgia Director for the National Federation of Independent Business

4 members appointed by the Lt. Governor and Speaker of the House

If legislation is warranted after the Council makes its recommendations, the Special Joint Committee on Georgia Revenue Structure will introduce a bill in the House.  The legislation will bypass all committees and go straight to the floor of the House for an up or down vote without amendment. If passed, the bill will go to the floor of the Senate in a similar fashion. The Special Committee will consist of 12 members:

Senate President Pro Tem and House Speaker Pro Tem

Majority Leaders, House & Senate

Minority Leaders, House & Senate

2 members appointed by the Lt. Governor (one Republican, one Democrat)

2 members appointed by the Speaker (one Republican, one Democrat)

Chairs, Senate Finance & House Ways & Means Committees

The last two will serve as co-chairmen of the Special Committee.

HB 1055 – Fee Increases

This legislation would raise more than 100 fees currently paid by Georgians or create new fees for various services.  Though not many of these fee increases would apply to the chemical industry, it would increase the pesticide registration fee from the present “not more than” $100 to “not less than” $200.  This would be a substantial fee increase and opens the door for unlimited escalation.  GCC is working to at least change the “not less than” to “not more than.”  Further, we are seeking some reduction in  the proposed fee.  Presently, all chemical registrations are handled by a private vendor at a set price.  This contract has not changed recently, so the increased fee is simply a money maker for the state.

HB 1283 – Mammoth Fee Bill

This measure requires state agencies to review all user fees to determine if it needs to be adjusted in order to adequately cover the cost of the goods and services provided by the state.  Further the bill requires all user fees to be remitted to the state treasury unless it is specifically exempt by the Constitution.  This provision will hurt a number of GA EPD programs.  In practice, EPD retains certain fees to run programs, i.e. air permitting.  This provision would require the fees to be deposited in the treasury and then appropriated by the legislature back to the division.  In a perfect system, this would work.  But the legislature has a habit of not appropriating the funds back to the agency.  The hazardous waste fee that we pay generates about $7 million a year.  It is supposed to fund cleanup activities of contaminated sites.  But over the past decade, only about half of the funds have been returned to EPD for the intended use.  In the 2010 and 2011 budgets, the hazardous waste fees have been zeroed out.  EPD is not getting any of the funds back.  If this provision of HB 1283 is adopted, GA will be in jeopardy of losing the delegated programs from US EPA.  GCC is working to develop a reasonable bill that will not hurt GA EPD.

SB 78 – Voluntary Remediation Program (VRP) Technical Corrections

As you will recall, GCC sponsored legislation last year to create the VRP.  Since enactment there has been a couple issues that have developed.  First, the application and reimbursement fees were intended to be held by GA EPD to implement the program rather than putting the fees in the state treasury and waiting for the legislature to appropriate the funding.  Second, we believe EPD did not fulfill the legislative intent of the VRP when they developed the application for the program.  GCC has developed a substitute for SB 78 that addresses both issues.  It would create an escrow account for the fees so that EPD could retain the funds until it was needed to cover the cost of oversight for the different projects.  Our substitute bill would clarify the application process so as to make sure in is streamlined and does not include a requirement that the site investigation should be completed before the application would be considered complete.  We have had a series of ongoing facilitated discussions with EPD regarding the application provision and it may be deleted if the division makes the changes administratively.

New Resolutions

HR 1649, introduced by Representative Mike Keown (R-173) on March 16, urges the Georgia Congressional delegation to support legislation that would prevent U.S. EPA from adopting regulations to regulate carbon emissions. The Georgia Chemistry Council will work to secure passage.  In a related resolution, Representative Keown also introduced HR 1650 that urges the Georgia Governor and Attorney General to initiate action to sue the federal EPA in an effort to prevent them from regulating GHG emissions.   You may recall that GCC sponsored a couple of similar resolutions--Georgia Senator Chip Pearson (R-51) introduced SR 958  and Rep. Ron Stephens (R-164) introduced HR 1367. GCC will make sure these measures are adopted in order to send a clear message to US EPA, President Obama and the Georgia Congressional delegation.  Further, we have plans to release an opinion column signed jointly with the Georgia Mining Association as soon as the measures are adopted.