Comité Finance del Senado, 17 de marzo de 2026

Transcripción

680 turnos. Seleccione un tiempo para reproducir ese momento del video.

1. 0:15:10

   Seeing a quorum present. Senator Tillery, our Appropriations Chair, would you do the invocation for us?

2. 0:15:16

   Sure. Dear Heavenly Father, thank you so much for, uh, taking care of us and getting us here safe this morning. I ask you just give us wisdom as we deliberate over the people's money, and make decisions that are wise, not only in the instant, but also for the future. In your name I pray, amen.

3. 0:15:30

   Amen.

4. 0:15:31

   Amen. All right, I think we're gonna start off first here with, uh, Representative Wade, which is, uh, House Bill 1001, if he's present here. You wanna do it for him? Sure. You're here for a reason, huh?

5. 0:15:52

   Yes, Mr. Chairman. I'm here for a reason, and it's for the people of the state of Georgia that want this bill. Uh, this is a governor's bill.

6. 0:16:00

   Let's give us the LC number and make sure everybody's got the right one. I think they do.

7. 0:16:04

   LC59-0226 EC.

8. 0:16:09

   Okay.

9. 0:16:13

   This is a bill that we have done b- in the past, but this will-

10. 0:16:18

    Is this going up?

11. 0:16:19

    ... accelerate the tax reduction, the income tax percentage down to 4.99%. Um, this was a governor's campaign promise. This is something that we've been able to do multiple times to accelerate the trajectory of when we're gonna get down below 5%. This will finally bring us underneath that 5% number.

12. 0:16:48

    All right.

13. 0:16:52

    Any questions from the, uh, committee? Are y'all looking it over?

14. 0:16:55

    Might be appropriate time.

15. 0:17:05

    All right, I'm not s- hearing any questions from anybody.

16. 0:17:08

    Mr. Chairman?

17. 0:17:09

    Sure, Senator Orrock.

18. 0:17:10

    Thanks so much.

19. 0:17:11

    I'll get the mic to you.

20. 0:17:13

    Thank you. Um, and my, my, my, my question is, the audit says that the Department of Revenue would be able to implement the bill's provisions with existing resources. How, uh... Is there any further, uh, data on that, that... I mean, we've got a whole analysis by the Fiscal Research Center, but how, how is that possible that we pull off that magician's trick?

21. 0:17:39

    What is the question? Like-

22. 0:17:42

    Did you wear a tie? No, no. Uh, uh, I take that question back. Uh, I, I was asking what's the, uh, the data behind the Department of Revenue would be able to implement the bill's provisions with existing resources?

23. 0:17:57

    I think it's because our... we c- collected more money than we projected in taxes, and this'll be a, uh, decrease that we've done before. The goal was to get to 4.99% by tax year 2029. Based on the last several years, we'll be able to do it by 2026, this year. So we'll get there three years earlier than, than planned, and this has been a consistent trend from the legislature and from Governor Kemp.

24. 0:18:43

    All right. Um, I'm not seeing any other questions, so we'll take a motion. Senator Albers, you want to make one?

25. 0:18:49

    It would be my honor. Uh, after the great work that you did passing market-based facilitator years ago that really saved us during COVID, and then Governor Kemp opening up the state before any other states, and us having great fiscal budgeting have allowed this to happen. So I would motion we do pass House Bill 1001, LC59-0226 EC.

26. 0:19:11

    Second by Senator Hodges. Any other discussion? All in favor, uh, raise your hand. And any opposed? One opposed. Motion carries.

27. 0:19:24

    Thank you, Mr. Chairman.

28. 0:19:25

    Um, are you your sponsor?

29. 0:19:27

    I am. I'm the sponsor.

30. 0:19:27

    Okay. All right. Well, good luck in r- good luck in Rules Committee.

31. 0:19:33

    Thank you.

32. 0:19:34

    Yeah, good luck in Rules Committee.

33. 0:19:37

    All right. Let me get this out of the way.

34. 0:19:42

    Um,

35. 0:19:49

    mark that one off.

36. 0:19:57

    I guess, uh, because somebody else printing, I need to bring Representative Monahan up here, even though I had a good bill over in the House, health bill that passed out 160 to seven-

37. 0:20:08

    Wow

38. 0:20:08

    ... that would save the state tens of millions of dollars, and for some reason he voted against it. So I'm-

39. 0:20:13

    Mm.

40. 0:20:13

    I'm not sure-

41. 0:20:13

    I'm gonna go check my machine, Mr. Chairman. It may have malfunctioned that day.

42. 0:20:17

    I, I don't, I don't know what the thinking was over there.

43. 0:20:19

    I'll double-check with the clerk.

44. 0:20:22

    Well, thank you, Mr. Chairman, members of committee. If y'all are ready, I've got, uh, House Bill 141, LC 443011S.

45. 0:20:30

    Pass this motion, yeah.

46. 0:20:34

    So tell us what the bill does.

47. 0:20:37

    Well-

48. 0:20:37

    Now, if you need Representative Martin to come help you explain, we'll bring him over too, but-

49. 0:20:41

    Yeah, he is a member of the Martin Caucus, Mr. Chairman. Uh- ... but today I'm flying solo.

50. 0:20:46

    Okay.

51. 0:20:46

    Uh, he's off. You know, he's been great help in the past. Uh, is he here with us today? He's not, Mr. Chairman. I'm sorry. So let me check the-

52. 0:20:55

    No, can't phone a friend today. You gotta explain it.

53. 0:20:57

    Uh, well, I'm actually gonna just read from it. And, and my friends over at the, uh, NF-

54. 0:21:02

    So you're gonna read what he wrote? Is that what you're saying? Or what are you telling us here?

55. 0:21:06

    Mm.

56. 0:21:06

    If, if that's appropriate for you, Mr. Chairman.

57. 0:21:08

    It's your-

58. 0:21:09

    Uh, I can do that Uh, or we can ask the crowd, but I don't think anybody's winning a million dollars. Uh, let's see, I- here's just a great way to put this. This is NFIB that put this. House Bill 141 provides for a practical improvement to the way occupation taxes are administered by allowing small businesses and practitioners to submit a certified public accountant's affidavit in place of a full tax return or other sensitive financial documents.

59. 0:21:40

    And that's just as simple as this bill gets. As you can see on the back page, it's just a couple lines here on lines 15 through 17, 23 through 25. And so here's, here's what we got. We've got, uh, some of these local jurisdictions, municipalities who are asking for sensitive, uh, financial information, uh, from these local businesses, and this could include stuff like wage data. This could include how much I pay if I'm a contractor, how much I'm paying for certain types of, uh, equipment that I'm, I'm deploying or installing for customers.

60. 0:22:14

    And that kind of information I feel like is just too sensitive, uh, in nature for a small local government. With that being said, this would just allow them to use a CPA, which is probably the highest level of scr- scrutinized, uh, fiduciary to, uh, provide a, a, uh, affidavit in lieu of those tax returns to the local government. Um, bill has many supporters, NFIB obviously being one of them, but also the Metro Chamber, uh, is a, is a big supporter of the bill as well.

61. 0:22:45

    With that, I'll stand for questions, Mr. Chairman.

62. 0:22:46

    So, so I, so if I'm hearing you right, a certified public accountant will not lie is, is what your basis is.

63. 0:22:51

    Well, Mr. Chairman, uh-

64. 0:22:53

    Good timing.

65. 0:22:54

    Senator Hickman, would you answer that?

66. 0:22:57

    I- if they are, Mr. Chairman, uh, they, they, they put a lot at risk for just a, uh, little, uh, occupational tax.

67. 0:23:06

    All right. Any questions from the committee?

68. 0:23:11

    We have seen this before, haven't we?

69. 0:23:12

    That's right, Mr. Chairman. Passed that unanimous last time, and looking for... I know we lo- uh, lost, uh, you know, time on the, on the last day last year on Saturday, so hopefully we can get it out this time.

70. 0:23:23

    All right. Senator Gooch? Just a simple question. Why, why do you limit- Hey, just hi- hit your button again. It's not wanting to come on ... I did. It's There it goes.

71. 0:23:33

    There you go. Is it, is it limited just to the occupation tax to be waived?

72. 0:23:37

    Yes.

73. 0:23:37

    It's not hotel, motel, or any other taxes?

74. 0:23:40

    That's all we've conceived here in this one. So we're only contemplating those occupational taxes here. Uh, when we talk about, you know, the... When we're talking about the data that's being sent off, we're kind of only thinking about, um, when you have to turn over your financial, uh, statements. I mean, you're, you're talking about... In some, in some municipalities they're asking for your entire books. I mean, they're not just asking for you-

75. 0:24:05

    Oh, I, I fully support it.

76. 0:24:06

    Yeah.

77. 0:24:06

    I'm just wondering why you limited it to just to the occupational tax.

78. 0:24:09

    That's where I'm starting this bill. We actually started this about six years ago, uh, on behalf of a constituent who had an issue with a local government, and, uh, me and, uh, Senator Anavitarte had just wanted to work this issue, but I'm with you. There, there's more to, uh, to work on here about kind of making sure that our small business community has that privacy, but that's all we've contemplated here.

79. 0:24:32

    Okay.

80. 0:24:32

    That's right.

81. 0:24:33

    Thank you.

82. 0:24:38

    All right. Senator, um, uh, is that Harvin? Ha-

83. 0:24:41

    Yes, sir. Thank you. Thank you. Great bill. I think that, uh, I was gonna ask this question, occupational tax, is there anything, can we go beyond that or has that been looked at from that standpoint?

84. 0:24:51

    So in, i- in, in the case where they're giving their gross receipts has always been basically a occupational tax. There are other, you know, levies by other local governments. For example, um, you know, if you're in a county, uh, and you own a commercial shopping center, for example, we have to turn over a rent roll-

85. 0:25:09

    Mm

86. 0:25:09

    ... to the county. That's really not contemplated here. This was a very specific instance in a municipality where they were asking for these gross receipts and in some ways arguably weaponizing them against a, a local constituent because she voiced, uh, some concerns in the community, and that's really way out of base. But when we start kind of investigating that issue and we start drilling down, we've got to start asking the questions, do local governments really need the entire books of a corporation just for a minimal occupational tax fee?

87. 0:25:43

    And the answer is, I think, simply no. And so that's, that's how this was contemplated. I know there are other issues out there, rent rolls, for example, uh, valuations of buildings, how we do and how we kind of bifurcate all these different types of taxes and the way we, uh, try to assess those. I really didn't want to contemplate that here. I had a very simple issue. I wanted to address it, but rest assured, my next step is to look at those other issues and I, I would welcome help from my friends in the Senate to do just that.

88. 0:26:16

    All right. Senator, uh, Tillery, you got a question?

89. 0:26:19

    Thank you, Mr. Chairman. Thank you, uh, Representative. Um, I think you got a really good bill.

90. 0:26:24

    Thank you.

91. 0:26:24

    And one of the things I wonder is, if it doesn't become effective until July 1st, you might miss out on a year of people being protected by this. Would you accept an amendment that just changed the effective date to say effective upon signature of the governor?

92. 0:26:43

    Well, let's just think through that.

93. 0:26:44

    Yeah.

94. 0:26:45

    If we do that, right now it would just be final passage in the Senate. If we do that, we've got to get and agree in the House. And I know sometimes as we're getting in these last eight days, we end up running out of time for things that just aren't. This is my sixth year working on this bill.

95. 0:26:58

    Mm-hmm.

96. 0:26:59

    If you're asking me, I would just rather see that if we like the provision of the bill, I would rather just see it move forward. If it's important to you, Senator, then I'm, I'm for you.

97. 0:27:15

    You got it.

98. 0:27:15

    Sound like an endorsement

99. 0:27:21

    He's tearing you down.

100. 0:27:22

     Could you, could, could you restate what you were looking at doing?

101. 0:27:26

     Yeah, uh, it would not be a... I'm afraid that folks would not be able to benefit under this for this tax year, potentially next la- tax year, and we could get it done a few months earlier. Um, knowing that most of these things usually go into place in April, thinking that we might be able to get it done in time for folks to not have to turn in their tax returns in 2026 with an amended date.

102. 0:27:47

     Like you, Senator, I wish we'd got this done last year.

103. 0:27:50

     Yeah. Okay. We'll think about it. I mean, I, I hear you saying pleasure of the committee. We'll see what we do.

104. 0:27:57

     Yes, sir.

105. 0:27:58

     Think about it.

106. 0:27:58

     I have great respect for my colleagues in the Senate.

107. 0:28:03

     All right. Any other questions from any of the committee members? Um, seeing none, we can entertain a motion. I'll make that motion. Senator Albers got a motion. Second. A second by Senator Harbin. Any further discussion? All in favor raise your hand. And we lost one, didn't we? Okay. Passed unanimously.

108. 0:28:29

     Thank you, Mr. Chairman. Thank you, committee.

109. 0:28:31

     Who's your, uh, Senate sponsor?

110. 0:28:32

     I think that's gonna be Senator Anavitarte.

111. 0:28:35

     All right.

112. 0:28:36

     Yeah. Thank you.

113. 0:28:43

     Okay. Um,

114. 0:28:47

     as R- Representative Barrett, are you ready now for yours?

115. 0:28:50

     Yes, sir.

116. 0:28:51

     Okay. Let's... Let me give you a little background on this. Go ahead and have a seat. Um, I am part of the National Conference of State Legislatures. I'm one of their board members on finance, we call it SALT, state and local tax legislation, and had recommended a, uh, nationwide plan for how to round the penny. Your original bill did that. It rounded the penny to go down, to go up, like we're trying to do all over the, the country.

117. 0:29:23

     Um, and then somehow it got changed along the way. So, uh, what I was looking at was your original bill, but now... And there's a question on whether our Department of Regulation, Department of Revenue regulation advisory is adequate or if we need a bill to codify it into law. So I guess if, if we do it like the rest of the nation is going, doing, I'd be for putting it into law, but otherwise, um, probably not.

118. 0:29:55

     So go, go ahead.

119. 0:29:56

     Thank you, Mr. Chairman. You're, you, you... And you said it better than I can. Um, the original bill is a simple, elegant bill. It kind of follows the guidance from NCSL, uh, th- that was passed out of committee. Uh, and, and it, it simply says for transactions that end... W- when you go to a retailer and you buy 13 different items, they will aggregate all of those things, come up with a total figure, and apply sales tax to that figure, and take the grand total, and if, if that final number ends in a 1 or a 2 or a 6 or a 7, it will be rounded down to the nearest nickel.

120. 0:30:34

     If it ends in a 3 or a 4 or an 8 or a 9, it'll be rounded up to the nearest nickel, and it's just very simple. Um, and that is sort of the guidance from NCSL, and that is sort of the consensus among states out there that are dealing with this.

121. 0:30:49

     And I, I helped write that-

122. 0:30:50

     Yeah.

123. 0:30:50

     ... for NCSL.

124. 0:30:51

     Yes, sir.

125. 0:30:52

     So I'm very familiar with it. Um.

126. 0:30:54

     The, the rule substitute came back and it said simply, uh, we'll just round down. Uh, which, which is problematic apparently. We've gotten a lot of feedback from retailers.

127. 0:31:04

     Mm-hmm.

128. 0:31:04

     And they said, "This is pretty problematic." For example-

129. 0:31:06

     I, I agree

130. 0:31:07

     ... imagine you're, you sell a dollar item. There it's $1.04, and you're rounding down 4 cents. That's, that's a lot of margin for a small item.

131. 0:31:14

     It, it's problematic, and in addition, we'd be doing it different than everybody else in the country. So I, I think that would be the case. Now, actually, we've got an empty spot.

132. 0:31:24

     Yes, sir.

133. 0:31:25

     How about coming up here and joining us, 'cause I've got a question for you. I, I took his original bill and was kind of okay with it, but then they pointed out that there was some slight differences with the exact NCSL language. So he's got copies of, that he could hand out, but we don't have an 01 and an 02, but can we just sub it into this? Can we sub that entire language into this bill?

134. 0:31:52

     Sub the entire language of what?

135. 0:31:54

     Of what he's fixing to hand out to all of us. Go ahead and-

136. 0:31:59

     Yes.

137. 0:31:59

     And, and while you're doing that, I should add that, um, while Diego had law class and is not here with me, the lovely Elizabeth Bennett is filling in for him once again. Um, I would think that it would be a refreshing change from her normal duties, uh, administrative assistant to, uh, Senators Ginn and Summers.

138. 0:32:20

     Oof. Absolutely.

139. 0:32:22

     Um, but-

140. 0:32:24

     Finance never looks so good, Mr. Chairman.

141. 0:32:25

     Yeah. And Anasha Hunter's here, as always, our, our intern from, uh, Georgia State and Minnesota.

142. 0:32:37

     So go through, go through the, this other language and, and explain what you've got.

143. 0:32:43

     Which LC are we walking, working off of?

144. 0:32:45

     Well, we're working off of, uh, the LC we were working off originally

145. 0:32:54

     is, um, 59-0439S. Oh, wait a minute, I might have gotten these mixed up.

146. 0:33:01

     Uh, Senator, uh, uh, Chairman, may I intervene?

147. 0:33:04

     Go, go, go ahead.

148. 0:33:05

     Um, the, the bill that was passed out of the House of Representatives was LC620462S. And, uh, that was the bill that simply rounds down. Um, the bill that was passed out of committee, uh, in Banks and Banking was LC620428S, which is the one that you have on your desk in front of you.

149. 0:33:24

     Right. And the one we had here in the folder Was the, actually the version before that, which was 590439S. So that's the bill we have in the folder. If I'm thinking of this right, if we go to this other one, which I don't disagree with going to it, that we would just sub this language in-

150. 0:33:43

     Mm-hmm

151. 0:33:43

     ... to that one. But, um-

152. 0:33:45

     Makes sense.

153. 0:33:47

     And you can, you can have a mic if you wanna talk at any point or whatever, you know, come join the crowd up here. But we'll, we'll, we'll, we'll get with you a bit later on that. But go ahead and go through the bill.

154. 0:33:55

     So, so the bill simply, uh, it, it rounds up and it rounds down. It only applies to transac- cash transactions or blended transactions. Say you use a, a, a gift card and you, for $20, but your item is $33.11. So it's, uh, it's a gift card and cash, in which case it would apply to that. About 11 to 14% of all transactions at retailers today are cash transactions. Most folks are, they're overwhelming- overwhelmingly using, uh, credit cards and debit cards. So it's just not that big of a universe of the transactions that happen anymore.

155. 0:34:29

     Um, and the goal is, uh, there's just not a perfect way to do this, which is why that excellent legislation that you helped write at NCSL says, you know, sometimes you'll, you'll win a penny or two, and sometimes you'll lose a penny or two, and it all will come out in the wash over time. Uh, in the case where a, a, a consumer has actual, uh, the ac- id- exact change, uh, you're, the, the retailer does, isn't allowed under this legislation to round up in that case. You know, the penny is still legal tender, and they can tender the exact change if they want, and, and that works fine.

156. 0:35:03

     But it's when they don't have exact change, it's that error ball, and you either round up or round down

157. 0:35:09

     And I, I think the retailers, if they're breaking even, they're fine with that. If they're losing, you know, somebody's got 100,000 transactions, which some of them do, then, uh, and they're losing on all of them, then I'm sure there'll be, there'll be quite a big outrage. But you guys passed it out over there, so I don't know. Uh, Senator Anderson, you got a question?

158. 0:35:30

     Representative, thank you for bringing this bill. Um, would this cause anyone to try to set their price to where it'd be on a high or a low on the amount of sales tax?

159. 0:35:46

     Uh-

160. 0:35:47

     Of the, of the, going, you know, up high or low. You follow what I'm saying?

161. 0:35:55

     It, it certainly is conceivable. It, indubitably, somebody will try to figure something out like that. Good, good luck to them. I, I, I don't, I don't think it would be effective. Um, you know, if you tended to round down only, you would end up having t- uh, retailers simply raise their prices, and that would affect consumers adversely, too. So it, it would all come out in the wash in the end. I, I think that this is a, uh, the reason so many states are doing it this way is just because it's, it's about as good as you can get with an unusual little situation.

162. 0:36:27

     You know, there's a, a penny or two to your benefit. On, on- only on the aggregate cr- transaction, though. So you might, if you have $135 transaction, it, you know, a penny up or a penny down is not going to be material really to any-

163. 0:36:41

     In my, in my little experience with that, about the, with the penny now, the situation we in, look like every time I go in, I get the shaft. I get the low end.

164. 0:36:55

     Well, I think then in this case, you're gonna-

165. 0:36:57

     I'm-

166. 0:36:57

     ... get some benefit instead, so it on- won't always be the shaft, Senator.

167. 0:37:01

     Well, I'm talking about, um, you know, you round it up or round it down, and it, like me, it's, they got it priced the way it always would round up.

168. 0:37:14

     Uh-

169. 0:37:14

     Are you paying, you paying cash or, or what on these? 'Cause this would only apply to cash transactions.

170. 0:37:19

     I know. I know.

171. 0:37:20

     And, and that-

172. 0:37:21

     I do, but-

173. 0:37:21

     And that might be the case, um-

174. 0:37:24

     Price is-

175. 0:37:24

     You know, in theory, it would be the case, uh, if, if they had a single item.

176. 0:37:28

     Order.

177. 0:37:29

     But it would be hard to anticipate if you had someone buying 11 items, how do, how to make it all come out where it's always rounding up. Um, let's say you had 10 different items and each one ended in one or two or three or whatever, and you aggregate them. It's only the, the total number plus the sales tax-

178. 0:37:46

     I see

179. 0:37:47

     ... that gets rounded. So it would be tricky to, to-

180. 0:37:50

     I gotcha.

181. 0:37:53

     All right. Senator, uh, Hickman.

182. 0:37:55

     Yeah. Thank you. Thank you, Mis- Mr. Representative. Thank you, Mr. Chairman. You know, I, I, I think about it, I look at this and I say, one, two, six or seven. And when I was in school, and I think most of us, it was like zero to to four you round down, and five and above you round up. So how are people gonna remember these odd number? I mean, I, I, that's what-

183. 0:38:19

     Well, well, because we're rounding to the nickel, it, there's, there's only-

184. 0:38:23

     Yeah

185. 0:38:23

     ... four pennies-

186. 0:38:25

     Yeah

187. 0:38:25

     ... between each nickel, right?

188. 0:38:26

     Yeah.

189. 0:38:26

     So one and, one and two go one way, and three and four go the other. It's exactly fair. There's no, uh, it's, uh, you know, someone asked me, "What about three? Why do you round three up?" But, but, uh, there's one, two, three and four, and two of them go that way and two of them go that way.

190. 0:38:44

     Okay. Okay.

191. 0:38:45

     All right.

192. 0:38:45

     I'll just have to put something on the wall to remind me of that.

193. 0:38:47

     Senator Gooch.

194. 0:38:49

     Can you go to line 20- 27 of the handout that you gave out? Explain that paragraph B to me, and then I'll have a question, if you don't mind.

195. 0:39:01

     Uh, if you have a transaction that's less than a nickel, the, you-

196. 0:39:05

     It rounds down

197. 0:39:05

     ... they're not gonna make you round down to zero. You go buy a piece of bubblegum-

198. 0:39:09

     Right

199. 0:39:09

     ... for two cents-

200. 0:39:10

     Okay

201. 0:39:10

     ... it's not gonna be free.

202. 0:39:11

     So-

203. 0:39:12

     It'll be a nickel

204. 0:39:12

     ... are the retailers gonna have to have different programming on all their machines? 'Cause, now there's a provision in here that also says if you're paying cash

205. 0:39:22

     And you have pennies, then this doesn't apply.

206. 0:39:25

     Yes, sir.

207. 0:39:25

     So how- are the, are the retailers on board with doing all of this?

208. 0:39:28

     Georgia retailers is, uh, in fact, I think they're, Kate Walker-

209. 0:39:32

     They're, they're supportive of this legislation.

210. 0:39:34

     They're here in the room.

211. 0:39:34

     This is the last one that just got done.

212. 0:39:36

     Absolutely. They're 100% supportive.

213. 0:39:37

     They, they are 100% on board with this. The, the, the Department of Revenue, Georgia retailers, uh-

214. 0:39:43

     Department of Revenue folks representing other retailers like McDonald's, they're all, they were all very much involved in this.

215. 0:39:48

     Okay. Thank you.

216. 0:39:51

     All right. Um, so, um, I guess the, the process here of how we do this, I'll see if our, uh, legislative council can... Yeah, you wanna get a mic up here?

217. 0:40:07

     All right. So my understanding at this time is that, um, it's the will of the committee potentially that LC 590439S be amended so as to conform with the language of LC 620428S, and I'll describe the specific changes, um, in a moment here. So on line,

218. 0:40:41

     on line 18, after the word including, strike any discounts on the price, comma, and then...

219. 0:40:54

     Sir?

220. 0:40:55

     Yes, sir.

221. 0:40:55

     I'm not trying to ... I apologize for interrupting. Is, is the will of the committee to, to do this completely?

222. 0:41:03

     That's, that's I think what we want to do. That's probably the best version.

223. 0:41:06

     Then, then rather than going through, I, I have no problem making the motion that we strip LC 590439S and replace it with LC 620428S.

224. 0:41:18

     Second.

225. 0:41:18

     Okay. Yeah, good. We-

226. 0:41:19

     I'll just save you some time.

227. 0:41:21

     I can certainly do that.

228. 0:41:22

     Okay.

229. 0:41:23

     All right. We've got a motion and a second to do that. Any other discussion? All in favor of this, raise your hand. All right, looks unanimously. Uh, who you want to sponsor it in the Senate?

230. 0:41:37

     I, I think it would be a tremendous honor if the person who helped craft the appropriate language for-

231. 0:41:42

     I'll be glad to, to carry it for you-

232. 0:41:43

     That would be fantastic

233. 0:41:44

     ... since it matches our language at the national level.

234. 0:41:46

     Outstanding.

235. 0:41:47

     All right. Thanks a lot.

236. 0:41:48

     Thank you, gentlemen. Thank you, sir.

237. 0:41:49

     Thanks. Appreciate it.

238. 0:41:52

     And you can stay up here if you want to, but, you know.

239. 0:41:58

     Okay. Um-

240. 0:41:59

     Report card. Report card.

241. 0:42:01

     We've got, uh, two more here to deal with. Uh, House Bill 439 has been substituted with a different bill. I think, uh, Mr... Representative Richardson, you wanna come up and go through this with us? Um, I would say in preface to this, this is just another tool to help out homeowner tax relief.

242. 0:42:30

     Yes, sir.

243. 0:42:31

     Um, and, um, it basically lets you establish a fund, if I'm reading this right-

244. 0:42:37

     Yes, sir

245. 0:42:37

     ... that would then be used, that fund, to shift revenue to homeowner tax relief.

246. 0:42:44

     Yeah.

247. 0:42:44

     Same as what we're gonna deal with in LHOST here in a minute.

248. 0:42:47

     Yes, sir.

249. 0:42:48

     Um, so there's, there's my understanding of it, but-

250. 0:42:51

     Yes, sir

251. 0:42:51

     ... go ahead through the bill if you would.

252. 0:42:52

     Yes, sir. Uh, HB, uh, 439. Thank you, Mr. Chairman.

253. 0:42:56

     And give us your LC number if you would too.

254. 0:42:58

     Yes, sir. Uh, LC 4742-

255. 0:43:01

     Well, we had to do a new LC number. Make sure he's got it. Could y'all get him a copy of that? They make us, if it's a new year, we have to put a whole new LC number on it, so.

256. 0:43:18

     This is the right one.

257. 0:43:25

     We, we have to... They make us put it on a new LC number for a new year.

258. 0:43:30

     Okay.

259. 0:43:30

     It can be the exact same thing, but...

260. 0:43:32

     Okay. LC 590438S.

261. 0:43:38

     And it'll be the same language you've got-

262. 0:43:40

     Yes, sir

263. 0:43:40

     ... on yours.

264. 0:43:42

     Yes, sir. This bill authorized the sas- establishment of a local homeowner's incentive adjustment grant fund through appro- approval by a local voter referendum, and may be discontinued by the same progress, process. This bill is created to provide local communities the ability to repa- uh, rebate homestead funds. If a local government wants to make use of this opportunity, it will call for a voter referendum to establish one. After such, a government will decide the appropriate amount of available funds to be deposited into the fund.

265. 0:44:16

     From there, the local government will s- spread the available funds between the homestead properties in the amount that the fund can afford. Currently, the cap on this program is, in the Constitution, is 18,000, uh, of assessed value. After the fund is initiated, the government shall appropriate the fund unless the, uh, revenues collected failed to cover their budget, at which point they would not need to add funds. The amount of the contribution is the choice of the local government.

266. 0:44:48

     The local government will spread the funds between homesteads with a credit applied for each tax liability. The credits issued cannot exceed the amount that is the homestone- homeowner's incentive fund. If the fund is discontinued after a voter referendum, the fund will be closed, and remaining funds shall be deposited in the county or municipality's general fund.

267. 0:45:16

     All right. Um, so if, if you had, I guess in some cases, say if you had, say, a, a data center that was bringing in a bunch of property tax- ... nuclear power plant. I don't know, something along those lines that was significant, that you could direct more of it to the homeowners. But this would be done, it would be voted on locally, is that correct?

268. 0:45:39

     Yes. Yes, sir.

269. 0:45:40

     And it would be totally at the will of the local jurisdiction-

270. 0:45:44

     Yes, sir

271. 0:45:44

     ... to do this?

272. 0:45:45

     Yes, sir.

273. 0:45:47

     Okay. Senator Albers.

274. 0:45:49

     Thank you. This is, uh, this is a good bill. Uh, would it also include things like impact fees and other things that a, a city or county might collect or not? No? Okay. So really it's just gonna be the, um, a large business that's going to provide, um, additional tax revenue up and above what they had originally anticipated then.

275. 0:46:09

     Any good conservative community that is growing their tax base and go- as, as the revenues come in, it gives a opportunity to, um, you know, rebate- rebate to the homestead folks. And-

276. 0:46:23

     And what would be the difference of that versus just rolling back the millage rate?

277. 0:46:27

     Um, well, if you roll back the millage rate, that affects every-

278. 0:46:32

     Commercial

279. 0:46:32

     ... all the big, big commercial-

280. 0:46:34

     Okay

281. 0:46:34

     ... industry and all of, all of that.

282. 0:46:36

     Very good. Thank you.

283. 0:46:37

     Yes, sir.

284. 0:46:38

     Now, um, well, Senator Tillery, you go ahead first.

285. 0:46:42

     Thank you, Mr. Chairman. Uh, thank you, Representative Richardson. This is a pretty ingenious thing. We came about it from another standpoint on the Senate side. We tried to give you two different millage rates, but this might actually be a little bit easier. I think you said two or three things. One, is, does the constitutional, constitution currently cap the amount you can roll back at $18,000? So it's just like our homestead or... Well, I see you nodding yes. I guess I should let you answer you at first, but-

286. 0:47:06

     Y- yes sir, it is, and we, we originally wanted a constitutional amendment, but we didn't feel that we could get there this year, uh-

287. 0:47:16

     Really?

288. 0:47:16

     ... on our, uh, our side of the, uh, the, the-

289. 0:47:20

     So it would cap... So, so you're not gonna be able to wipe out homesteads then unless the assessed value is less than 18,000.

290. 0:47:26

     But, uh, my intent is in the future to come back and-

291. 0:47:30

     And address it again?

292. 0:47:31

     Yes, sir. And to try and remove the, the cap so we can do that.

293. 0:47:37

     When you l- levy the rollback, it's not really levied, I guess, 'cause it's, it doesn't l- it doesn't reduce the millage rate. You're gonna apply it dollar for dollar, so to each tax. So if you have 100 homes and $100 in the fund, each home's gonna get a dollar. It's not gonna be millage rate reduced. So that means you're gonna actually eliminate this property tax on lower valued homesteads first. Am I correct on that?

294. 0:48:05

     Y- yes, sir. Now let, let me just quickly, uh, interject. My name's Tom Gale, and I'm representing Columbia County, of which he, he serves, uh, as, as one of the representatives from that, that area. Um, yes, to your point, a dollar for dollar basis, um, the Constitution was amended, uh, back when Governor Barnes was in office to create a, a hom- homestead tax-

295. 0:48:26

     Understands that

296. 0:48:26

     ... deduction

297. 0:48:27

     That's how we actually funded the rollback that we just did.

298. 0:48:30

     Correct. Correct.

299. 0:48:30

     We tried it in our budget.

300. 0:48:32

     And so that provision is, is actually referenced on line 56 through 59.

301. 0:48:36

     Okay.

302. 0:48:37

     Um, and what we're trying to do is, is establish this type of, of program subject to the approval of voters for cities and counties that have the growth in the digest, that have benefited from economic development or are just, uh, good fiscal stewards of their taxpayer dollars. And, uh, it would be, um-

303. 0:48:57

     Give me one question, okay

304. 0:48:58

     ... it would be up to that $18,000 cap, which is in that constitutional provision. Um, so the tax liability of, of a homestead property up to that $18,000 could be potentially covered depending on the fu- fund, uh, that's established by the local government.

305. 0:49:15

     Would... So I know your area a little bit. I guess you're gonna eliminate the, the folks in Grovetown would probably see if, assuming their values were lower at their homesteads, would see their income, their property taxes eliminated quicker than the folks living on the Savannah River maybe.

306. 0:49:33

     Well, what the, what the hope is, is as the growth comes in and we grow-

307. 0:49:39

     You get more

308. 0:49:39

     ... as, as we grow our base, and as in the future, if we can do away with the $18,000 limit-

309. 0:49:47

     That's where you want the line

310. 0:49:48

     ... then whatever your tax is, if there's funds enough, we'll roll back yours, whether it be a $100,000 house-

311. 0:49:55

     Right

312. 0:49:55

     ... or whether it be a 200,000.

313. 0:49:57

     I don't expect you to have this answer today. I do need to know it at some point in time. If, if this passes and folks in Columbia County or other counties enact it, does it prohibit us from the, in the future from being able to use state taxpayer dollars, state, state general funds 'cause of that $18,000 cap?

314. 0:50:15

     N- uh, that, that may be a question for legislative council, and we can get that, that answer for you. But the, the constitutional provision-

315. 0:50:24

     Constitutional cap, really. Yeah, not legislative cap.

316. 0:50:26

     The, the provision is constitutional. Um, and of course, the original intent of this, uh, was for state grants to local governments for this purpose. Um, whether you can stack them, so to speak, um, would be a question for legislative council. In o- in other words, could you, uh, if you've got a tax liability of $36,000 on your homestead, could the county and the city both implement programs like this to reduce i- it up to 18,000, and then could the state then come and reduce it another 18,000 to get you to that full tax elimination of tax liability?

317. 0:51:00

     You can find that out. I'm g- I'm for the bill. I just, I'm wondering that before I get to the floor, 'cause I'm obviously thinking through other numbers that we're trying to fund.

318. 0:51:06

     Yeah, we'll follow up.

319. 0:51:06

     All right. Thanks.

320. 0:51:07

     Se- Senator Hickman.

321. 0:51:10

     Yes, thank you. Thank y'all for bringing this. Help me, I just say, and this may not be a relevant question, but I'm gonna ask you anyway. Does Columbia County, did y'all adopt the FLOST, F- L- O-S-T?

322. 0:51:21

     We did not.

323. 0:51:22

     Okay. Okay. So I was wondering if so- if a county did adopt that, and that obviously was your bill, Mr. Chairman, um, would they still be able to handle this? Do this also 'cause actually the FLOST would take it-

324. 0:51:33

     Well, it would, it would ... Some counties, it ... Well, let me back up. The, the FLOST, the data we had before on it, and we've got another bill coming up that would have everybody opt in-

325. 0:51:43

     Oh

326. 0:51:43

     ... following this bill. But the cities that adopted the FLOST, it, it came out to about two-thirds of them would completely eliminate-

327. 0:51:53

     Yeah

328. 0:51:53

     ... the property tax. Uh, the counties, not as, not completely. So it, it could be used in conjunction with it, but in some cases, um, it would, it would be a wash either way because once you hit that no, no homeowner tax, it's all gonna flow to all the other taxes anyway.

329. 0:52:13

     So, so if in, in your example, once the FLOST wipes out two-thirds of the taxes, there's only one-third left, and this thing comes in and builds a greater fund, what ha- if, if that greater fund, he sees taxes all together, but a FLOST has to be used, these for nothing but offset property taxes, correct?

330. 0:52:31

     Right, all property taxes, not just homeowners.

331. 0:52:34

     Okay.

332. 0:52:34

     Here, he's trying to shift it to homeowners.

333. 0:52:36

     Okay. I got you.

334. 0:52:36

     And Mr. Chairman, if I could-

335. 0:52:37

     I understand. I understand. Thank you.

336. 0:52:39

     And, and if I could just add, um, the senator from the 36th is not here, but, um, but I know that I've heard her on many occasions talk about the importance of home rule and, uh, the fact that this is a locally initiated program that would be approved locally by the voters and could not be removed without another referendum to remove the voters. This is, um, I would argue, a, a local control ability to, to drive down homestead property li- tax liability.

337. 0:53:07

     All right. Senator Anderson?

338. 0:53:11

     Representative, thank you for being here today, and thank you for bringing this bill. Isn't it true that as we all hear, we poll things and see what the, the great people of the great state of Georgia would like to have, doesn't this poll pretty highly that people are fed up with property tax and how high they are?

339. 0:53:35

     When I was on the county commission of Columbia County, that was the number one thing that I, that, that I heard the whole time I was there, was the property tax and-

340. 0:53:44

     And isn't it true that this is one s- good step toward, going toward doing away with property taxes?

341. 0:53:54

     Yes, sir. We feel confident that it, it, it

342. 0:53:57

     Isn't it true-

343. 0:53:58

     ... will get it down

344. 0:53:59

     ... isn't it true that any, any county that's being a good conservative county can also use this same plan?

345. 0:54:09

     Absolutely. Good conservative leadership will, uh, it'll, it'll, it'll come back and reward the, the, the homeowners.

346. 0:54:16

     And isn't it true that you are my representative?

347. 0:54:18

     Yes, sir, and I want to do all I can to help you on your property tax, sir. And help him get reelected too, huh?

348. 0:54:25

     Yes, sir.

349. 0:54:26

     Sure.

350. 0:54:26

     Thank you for bringing this bill.

351. 0:54:28

     All right. My senator is Senator Lee Anderson of the 24th.

352. 0:54:32

     Oh.

353. 0:54:33

     All right. Um, Senator Gooch, one more question and we'll bring-

354. 0:54:36

     Isn't it true if Senator Anderson would make a motion to pass this, we can move on?

355. 0:54:41

     I, I agree. I think that time is now.

356. 0:54:44

     I make a motion to pass.

357. 0:54:47

     All right. Uh, we've got a motion and a second by Senator Hickman. Any other discussion? All in favor, raise your hand. Any opposed? Pass unanimously.

358. 0:54:56

     Thank you.

359. 0:54:56

     Thank you very much, and I'm gonna have Senator Anderson-

360. 0:54:59

     Well, I wouldn't go that far, but- Motion to recess, Mr. Chairman.

361. 0:55:03

     We, we back Patton today.

362. 0:55:05

     Yeah. Okay.

363. 0:55:05

     Thank you.

364. 0:55:06

     All right.

365. 0:55:06

     Thank y'all very much.

366. 0:55:07

     Our, our chairman, I hate to have him wait to the end. We're saving the best for last, but he got to see all his, uh, members in action here, if you want to come on up.

367. 0:55:15

     I am back there.

368. 0:55:19

     Madam Secretary and Senator Simpson.

369. 0:55:22

     I like the senator's idea over here. Just move along, right?

370. 0:55:26

     Yes.

371. 0:55:26

     Go to the right.

372. 0:55:29

     All right. We have, uh, House Bill 1116. Um, we've had a lot of conversations between a lot of people, including the cities and the counties and us, and weekend calls and things like that, and, um, and our higher-ups as well. This is a thick bill, but let me tell y'all something. A lot of this bill you've already seen already, because we've got in there both our, uh, our bill that we passed out with a mandatory cap and that the FLOST money through six months of this year would go ahead and get off the property tax bills in November.

373. 0:56:11

     And then the, the bill we passed out recently for the property tax appraisal notice, we left that in there, too. Now, they're moving those alone in the House, but, um, one is passed out of full committee and one out of subcommittee. Um, but we're still trying to keep options available. So half this bill you've already seen, and we'll try to just focus on the other part. So if you wanna go ahead and start, Mr. Chairman, the floor is yours.

374. 0:56:40

     Y- yes, sir. Uh, thank you, Mr. Chairman. Thank you for, for all of your, your hard work on this, and, uh, agree with Senator Anderson over here. We've all, all of our constituents we've heard from, uh, all of us have heard from our constituents the unsustainable path that property tax is on and the, the burden that it is on our, on our homeowners especially, and appreciate working with all the various stakeholders to try to come up with some solutions here, and, uh, try to put some- something that is gonna bring real relief back to, uh, to our property owners and specifically to our homeowners across the state.

375. 0:57:13

     Um-

376. 0:57:14

     I think the new part is more the front part of the bill-

377. 0:57:18

     It is

378. 0:57:18

     ... from, from our other two that they've already seen. So once you get halfway through the bill, you'll be there if that, if that gives you any hope that there's an end of the day.

379. 0:57:26

     I'll try to hit these parts pretty quick, Mr. Chairman.

380. 0:57:28

     Okay.

381. 0:57:28

     If you want me to dive in a little bit more so, then I'm, I'm happy to do so. Um, but again, uh, you know, part one is just the name. It is, uh, named the, the Homeownership Opportunity Market Equals Equ- Equalization Act of, uh, 2026 Part two, um, talks a little bit about sales tax. Right now we have a, a two-cent cap with a whole bunch of exceptions that really puts our, our true cap at five, and this just kinda clarifies and clears that up. Um, part three, uh, s-

382. 0:57:59

     Before you, before you go into, into three, let's talk about, um, the, the, the, the area that'll probably have a lot of discussion is the lost ending, uh, December 31st, 2027 getting replaced. But I do wanna point out to everybody on line 107, the cap actually has been 14%, um, and, uh, we're repealing that. So we're lowering the, the... We're lowering the, the cap for, for sales tax in Georgia.

383. 0:58:30

     What line was that?

384. 0:58:32

     Line 107.

385. 0:58:36

     107.

386. 0:58:36

     We're, we're repealing that section, so, um, the cap of 14's going down. So you, you, you guys running for higher office, you know, can maybe use that. I don't know.

387. 0:58:47

     What does it go down to?

388. 0:58:49

     Um, I guess it's going-

389. 0:58:50

     5.9? That's exciting.

390. 0:58:54

     Yeah.

391. 0:58:55

     Well, the, the state's four, and so the local will be five- capped at five, so you're at a nine.

392. 0:58:59

     Nine. 9%.

393. 0:59:00

     Yes.

394. 0:59:01

     Okay. So go ahead to your, uh, part three.

395. 0:59:05

     Part three converts, uh, some of the existing OSTs, if you will, um, to the LHOST, which, you know, provides homeowner relief, uh, based on that, uh, that penny of sales tax is dollar for dollar offset, um, which kind of gets us into, uh, part four, which establishes that LHOST that would, would go towards homestead property tax relief. Um, again, it, it, it replaces some existing property tax pennies, uh, and, and, uh, gives deference to homesteads and then other properties, um, is, is the way that would, would actually work.

396. 0:59:46

     Again, it, you know, I can jump into, uh-

397. 0:59:48

     And, and there's some unusual ones. I know DeKalb is a little bit different, but I believe they're on board from what I'm understanding, that this would not, would not hurt them in any way by doing this.

398. 0:59:58

     That- that's the intent. And, uh, again, it would allow you to have, uh, a, a homestead penny, and you would have access to FLOST, and so you have a property tax, uh, reduction mechanism and a homestead reduction mechanism. As you move into, uh, part five, it, it speaks to the, the school, um, reserve cap. Um, it, it, it takes that from 15% to 25% that they can keep on hand, and I think that kinda is part A of part five. You get into part B, and 36 other states right now have some sort of revenue cap when it comes to ad valorem property tax, and this would institute a 3% or CPI, the greater of, of that, on our local, uh, governing authorities, our levying authorities, the schools, uh, the cities and the counties.

399. 1:00:45

     It does provide some exemptions for emergencies, and it also allows them to exceed that with a referendum or a local act. Um, so again, some, some other stuff that we can talk about in, in greater detail. I know the hour is late, Mr. Chairman. Um, part C of that is a duplicate piece, and that gets into the 566, Senate Bill 566, Senate Bill, uh, and 382, that are also included in here. Um, part four includes the t- the t- the language about twice per year referendum, um, on any sales tax that, uh, locals wanna institute.

400. 1:01:21

     And what that would be is that you can do it in the, uh, off years at the date of the March or the, uh, election in November. And then in even years when the state elections are held, you can do it the date of the primary or the general election. It's not, you can't do it in a bunch of other locations. I think there's been maybe a little bit of gaming, some people that go to a time with low turnout. Though I do think that default will probably be that March of the, uh, odd years is where they'll still try to go to.

401. 1:01:53

     Well, the, uh, you know, that piece, the caps, and then something I'm about, about to get into are some recommendations that we've seen from various institutions, whether it be the National Taxpayer Union or the Tax Foundation or, um, Americans for Prosperity. But I, I, you know, seven is largely, uh, the notice, uh-

402. 1:02:13

     Tax appraiser notice, yeah

403. 1:02:15

     ... the notice, uh, s- you know, uh, language from 566. It does marry up the truth in taxation piece. That is another, uh, piece that's advocated for, um, with some of our, our partners that would require a mailer in addition to the newspaper ad if there's gonna be a tax increase. So you'd have to mail it to every parcel. We don't see the newspaper in quite the level of circulation, the, the print as, as maybe in years past.

404. 1:02:39

     And some of our national groups suggest that. I know places like Ohio and some other states, they're doing that. That is a, is a requirement.

405. 1:02:45

     Yes, sir.

406. 1:02:46

     So it, it is workable because other pla- states are doing it.

407. 1:02:48

     They are. Um, and then back assessments, uh, it, it does, uh, have some language that speaks to, you know, how those would be resolved in, in kind of the taxpayer's favor. There's, uh, some, uh, data required for a local government, so I know that language might need a little bit of, of help. And then there's a, a database for homesteads with some penalties that in- are included if you, uh, if you don't qualify and they determine that you have-

408. 1:03:16

     And, and we-

409. 1:03:16

     ... have notified incorrectly

410. 1:03:17

     ... we've gone through that part already in here on the, on the previous bill. So I think the committee's good with it, but they could speak up if not.

411. 1:03:25

     I, I think most of the rest of the provisions are, you know, 566 or 382, Mr. Chairman.

412. 1:03:32

     Mm-hmm.

413. 1:03:33

     I stand for questions, of course, and...

414. 1:03:36

     Right. Senator Albers.

415. 1:03:38

     Thank you, Mr. Chairman. Uh, Chairman Blackmon, you've spent a lot of time on this, so thank you first for your hard work on- Uh, I know this is challenging to pull these together. Knowing that there's been changes from the original version that had passed the House, help me to be able to communicate back to some of my local elected officials that had concerns about that original version and why this might help alleviate those concerns.

416. 1:04:00

     Um, well, uh, you know, I, um, it probably would depend on the certain concern, uh, that, you know, that, that they have. Um, do you, do you have-

417. 1:04:11

     All my cities, cities, counties, and schools are having a, a, a bit of a coronary when this first came out.

418. 1:04:17

     I think a lot-

419. 1:04:17

     Well, we, we, I, I think our original goal-

420. 1:04:19

     A lot of them still remember that original bill where there was additional sales tax.

421. 1:04:23

     There was-

422. 1:04:23

     And there was data centers and things like that in there.

423. 1:04:25

     Y- yes, sir. We've been through three iterations. Our original goal was to try to eliminate homestead property tax.

424. 1:04:30

     Sure.

425. 1:04:30

     And we did have a, a path and a plan, again, working with our, our local partners to, to try to come up with something that was workable there. Um, we moved from that to some suggested languages from the cities and counties.

426. 1:04:42

     Okay.

427. 1:04:43

     And it was more reliant on a sales tax replacement mechanism. This does not do that. This just replaces some local sales tax options-

428. 1:04:54

     Okay

429. 1:04:54

     ... and again, provides some relief for our homeowners, at the same time, all of our property owners. And it does prevent, I think what we've seen, the trajectory over the last few years on property tax. If you look at, at the numbers, you know, 50-plus percent over the last five or six years, um, this would cap, uh, you know, that kind of growth. So you do have the exclusivity of new economic development, new growth, any kind of emergencies, and then of course inflation. But it would put some guardrails on that growth.

430. 1:05:25

     Thank you.

431. 1:05:25

     Yes, sir. Thank you.

432. 1:05:26

     All right. Um, I can... If, if y'all are okay, I, I see another question or two. Maybe I can get some testimony. I think that's gonna flush out some stuff. Is that okay? Um, uh, Tony West, why don't you come up? We'll hear from him and the cities and the counties and the realtors.

433. 1:05:46

     Thank you, Mr. Chairman. Uh, I want to start off, uh, by introducing myself, I suppose. Tony West, state director for Americans for Prosperity here in Georgia. I want to thank Chairman Hufstetler, Chairman Blackmon, for their continued work on trying to protect the taxpayers of Georgia from these rising property taxes we've all faced. Um, I wanted to focus... I, I haven't seen this committee sub, but I wanted to focus specifically on, um, the sections regarding levy limits, the, uh, when the ballot referendums actually take place, and then of course the enhanced, uh, voter notification when tax increases are being proposed.

434. 1:06:21

     Um, like Chairman Blackmon mentioned, levy limits are in place in most states. They're a guardrail to make sure, uh, taxpayers are not facing dramatic increases year over year. I think the, the 3% or inflation standard makes a lot of sense. Um, the level of in- information providing to voters, so when they do go to the polls, you know, what previous year revenue was, what the proposed budget ordinance revenue was, and whether the increase is due to, you know, new growth or a levy limit increase, I think that's really important for taxpayers to know when they go to the polls.

435. 1:06:57

     Um, in regards to the, the twice-per-year ballot referendums, that's another thing that we, you know, wholeheartedly support. This ensures that when these types of questions are voted on by the voters, it's broadly representative of the voters and reflect, reflect the public's true preferences. Um, in terms of the enhanced notification to property owners when a proposed tax increase is, is before them, really like to see the personalized notification.

436. 1:07:28

     The information in there is not just, you know, summary information about what the entire district's looking at. It's their personal property, how they would be impacted by the proposed increase. That level of detail I think is really important. It's gonna lead to more engagement by citizens, 'cause they're gonna actually know what's going on. And I think that level of increased engagement's gonna be really important for, for property owner buy-in when these types of tough decisions are to be made. Uh, I'll close by saying, you know, for years, local taxation decisions have been made about property owners, not by them, and the reforms in this bill will provide a sustainable solution to Georgia's property tax burden by promoting transparency and helping all of us be more informed and engaged citizens regarding these local property tax decisions.

437. 1:08:16

     I appreciate your time.

438. 1:08:17

     Thank you very much. Thanks for your work in Georgia and, and bringing the national perspective. Could you mention a few states, I know, that do this? It seemed like Ohio was one of them and...

439. 1:08:27

     I'm not sure if Ohio was. I know U- Utah was the first.

440. 1:08:30

     Okay.

441. 1:08:30

     I, I did leave this out of my testimony. In 1985, Utah was the first to combine the idea of a levy limit with enhanced, uh, taxpayer notification-

442. 1:08:39

     Mm-hmm

443. 1:08:39

     ... what's called Truth in Taxation. And over the years, because of that level of citizen engagement and the accountability that comes with it, they went from one of the highest property tax states to now the fourth lowest in effective tax rate, and that's Utah. So I mean, if we can get anywhere near that in the coming years, I think we'd all consider this a success.

444. 1:08:58

     All right. All right. Thanks for your testimony.

445. 1:09:00

     Thank you.

446. 1:09:00

     We appreciate it. We've got, uh, Betty Bradford with the, uh, Realtors, Georgia Realtors.

447. 1:09:12

     Thank you, Mr. Chairman. Betsy Bradfield with the Georgia Association of Realtors here on behalf of all home buyers and homeowners in the state of Georgia, and we urge your support for House Bill 1116. So for many Georgians, purchasing a home is the single greatest investment they may make in their entire life. And it represents stability, opportunity, and in our opinion, is the pinnacle of the American dream. But for too many families in the state, that dream is slipping out of reach because they cannot rely on a fair and balanced property tax system.

448. 1:09:44

     Frankly, they just do not know how much property tax they may pay in the next year. And this legislation can change that trajectory. So this legislation provides a path towards meaningful, um, long-term property tax relief that will help keep seniors who are on fixed incomes able to stay in their home, and it will give potential future homebuyers the predictability that they know what their property tax bill may look like year over year in order to plan for their financial futures. So passing House Bill 1116 will provide critical, lasting property tax relief for our state, and we believe it will strengthen homeownership opportunities, um, across the state of Georgia.

449. 1:10:20

     So I'll stand for any questions, but thank you for your consideration. Thanks for meeting at, at this hour and, uh, hearing this important piece of legislation. And thank you, Chairman Black, for all your work on this.

450. 1:10:31

     And this was the slot they gave us. I didn't have any choice. I didn't want to meet right now.

451. 1:10:34

     Well, you did a great job.

452. 1:10:35

     Um, all right. We, we do appreciate your testimony and your support on this.

453. 1:10:39

     Thank you, sir.

454. 1:10:39

     Thank you. Let's have, uh, Clint Mueller with the ACCG, if you wanna come up.

455. 1:10:49

     Hear from the counties and the cities, and then we'll continue back with the discussion.

456. 1:11:02

     Thank you, Mr. Chairman, members of the committee. My name's Clint Mueller. I'm with the County Commissioners Association. We represent the 159 county governments in the State of Georgia. Um, we also are the ones that sort of administer the property tax system for the schools and the cities. As you know, we put together the tax digest that the schools and the cities operate off of. Wanna thank, uh, Chairman Blackmon. He spent countless hours with us on this legislation and trying to, um, get a piece of legislation, obviously, that, that we can implement and, and will work in practice for the local governments.

457. 1:11:33

     Um, we have had some further discussions just on a few things that I'd like to point out to the committee. Uh, obviously, Section 31 is a big section of the piece of leg- of this piece of legislation, 'cause that's where we're converting what we call the local option sales tax to this LHOST. So if you're not familiar with LOST, it's the first sales tax that we have in Georgia for local governments. It applies for across the board property tax relief. So what we're gonna really do here is, is convert that to a more targeted tax relief program for homesteads first, and then once you eliminate all homestead property taxes, then whatever's left over continues to go to across the board property tax relief.

458. 1:12:16

     One provision that's in here, though, is, um, when this kicks in January 1 of 2028, they're gonna continue, uh, this is on lines 136 through 139, continue to split this money between the county and the cities the same way we currently split LOST funds. But when those LOST negotiations took place, they took place, uh, predicated on splitting the money based on how much total property taxes each jurisdiction had to, to offset. Here, since we're just offsetting homestead property taxes, one thing we'd like y'all to consider is maybe we should split this money more in line with how much homestead property taxes each jurisdiction has.

459. 1:12:53

     That way you can kind of e- eliminate homestead property taxes across the board for everybody before you start providing any additional property tax relief to non-homestead properties. Does that make sense? Sort of a proportionate, right? So if, if you got $10 and, and the, and the county c- uh, has $8 of that in their homestead property taxes, and you got two cities that have a dollar each, right? That's so you would split it that way, so you could bring down homestead property taxes for the county and the cities proportionately across the board, um, instead of splitting it the way we currently do with LOST, which was n- which was not designed to be, uh, the way to split it for homestead property tax relief.

460. 1:13:32

     Um-

461. 1:13:37

     So let me ask a question on that. I- i- as- if somebody's got higher taxes than somebody else, does that reward them by getting them more money?

462. 1:13:46

     Well, it, it, it, no, because you're reducing all home- homestead property taxes for all jurisdictions, regardless of what their levies are. Um, to raise property taxes, obviously they'd have to raise the millage rate. If they raise the millage rate, then that raises, that does raise property taxes across the board.

463. 1:14:03

     Mm-hmm.

464. 1:14:04

     There's also, one other thing about this is there's, this is not a homestead exemption. This is an offset on homestead property taxes.

465. 1:14:13

     Mm-hmm.

466. 1:14:13

     And we're really not sure how that applies to the bill. So for example, I think earlier, uh, it was mentioned, do you do the HDRG method of reducing property taxes, which would wipe out lower value property first, or do you do sort of a percentage reduction where everybody gets the same percentage off their property tax bill? There's nothing in here that, that gives us guidance as to sort of how we apply this. Since it's not a homestead exemption, I assume we would need to apply it as some sort of a credit on the bottom line of the homeowner's tax bill.

467. 1:14:43

     But that's-

468. 1:14:44

     It, it would be a, you'd, you'd roll it back in here. I- I-

469. 1:14:47

     Well, it's not a millage rate roll. Remember, with the millage rate-

470. 1:14:50

     Mm-hmm. But you're applying it to taxes, home- homeowner taxes first.

471. 1:14:54

     That's right, but we, we can't, we legally can't reduce the millage rate just on homestead property taxes. If we reduce the millage rate, we have to reduce the millage rate on-

472. 1:15:03

     Mm

473. 1:15:03

     ... all property. There's no mechanism in current law to say that we can, say, have a millage rate of five mills for homestead property owners and a millage rate of 10 mills for non-homestead property owners.

474. 1:15:14

     Mm-hmm.

475. 1:15:14

     So that doesn't really-

476. 1:15:15

     It's a, it's a credit to it.

477. 1:15:16

     It does say-

478. 1:15:17

     Senator Tillery, you wanna jump in here? You had a-

479. 1:15:18

     Yes, sir. No, that, that-

480. 1:15:21

     You're, you're right where I was asking with the first question, so I, I'm ... Thanks, Clint, for that. One of the things that I didn't realize until you just brought it up is I was trying to figure out why we were changing LOST to LHOST.

481. 1:15:33

     Mm-hmm.

482. 1:15:33

     And if we do that, while I don't think I would rather worry about homestead, but we are gonna raise the property taxes on every commercial and industrial user.

483. 1:15:45

     Mm-hmm.

484. 1:15:47

     Mm-hmm.

485. 1:15:47

     Potentially substantially, like double.

486. 1:15:51

     Well, if you replaced the LOST-

487. 1:15:53

     That-

488. 1:15:53

     ... with the FLOST-

489. 1:15:55

     Right

490. 1:15:55

     ... you would break even.

491. 1:15:56

     Yeah, that was the argument. If you, if you were to implement a FLOST at the same time you take away the LOST, and then there's a lot of ifs there. But the, the FLOST is across the board property tax relief. So maybe that offsets losing the LOST by putting that in effect at the same time you take away LOST. It's, it's different per district.

492. 1:16:16

     Oh.

493. 1:16:17

     So I mean, it's gonna, it's gonna be implemented differently, and it, and it affects ... I mean, there are some, as Chairman Hufstetler said, two-thirds of the cities can eliminate all their property tax. So that's still gonna be the case, so you're still gonna eliminate property tax with a LHOST.

494. 1:16:31

     Well, but let's-

495. 1:16:32

     Because it rolls into non-homestead property tax the minute you eliminate the homestead.

496. 1:16:36

     Do you still think you eliminate industrial and commercial property taxes too?

497. 1:16:41

     I'm just saying in certain districts it operates that way. Um, you know, n- and but the FLOST is designed to lower all property tax. So again, you still have the two mechanisms that would, would, would operate in a little different manner. But you-

498. 1:16:55

     The FLOST is still the-

499. 1:16:55

     ... you double down-

500. 1:16:56

     ... additional penny that you're not paying now. You're still just converting, instead of paying property taxes, moving it to sales tax.

501. 1:17:01

     Several of the, uh, districts have already implemented a FLOST, yeah, in addition to their LOST. So this redirects one to homestead.

502. 1:17:09

     How many counties is it? It's 30-something. I don't know if it's 32, 30-

503. 1:17:12

     I think we have about 34 that have implemented FLOST

504. 1:17:14

     ... 34. That's what I was thinking. Yeah.

505. 1:17:15

     Yes.

506. 1:17:15

     That's the-

507. 1:17:16

     Right

508. 1:17:16

     ... you know, kind of balance.

509. 1:17:19

     All right. Um-

510. 1:17:20

     Um-

511. 1:17:21

     Senator, let me, let me get a couple of questions here before you go. And Senator Anavitarte, you had a question.

512. 1:17:28

     Straight out of a great meet- well, great meeting downstairs. GMA, thank you. Do you hear that often? DJ, where you at? Where'd you go?

513. 1:17:36

     Right here.

514. 1:17:36

     Thank you, DJ. So I just left the meeting with the City of Hiram. Um, we'll see if they finish the drill so we don't have to dissolve them. Um, they currently don't have a property tax. So under this LOST and this situation, what happens to a city that doesn't have a residential property tax?

515. 1:17:56

     So this may be a better question for GMA, but we do have about roughly 125 or so cities that they technically have a property tax, but they use this LOST sales tax that we're talking about to roll their property tax down to zero. So they don't actually send out a tax bill because their millage rate is zero. They've rolled it all back. Of course, with this conversion from a LOST to an LHOST, they're gonna have whatever their property tax is that they no longer roll back anymore with LOST, and now they're gonna have to use LHOST to roll it back.

516. 1:18:29

     Now, I assume LHOST, if it wipes out their homestead and there's enough left over to wipe out everything else, they can still get back to zero maybe.

517. 1:18:36

     And it's still the same penny, so it should do what it was doing before. It's just simply it would apply to the homeowner first-

518. 1:18:41

     First

519. 1:18:41

     ... to the rest of the property second, and then the rest would be left over for what they're doing with it right now.

520. 1:18:47

     That's correct. Yes.

521. 1:18:48

     As long as the distributions stay the same. I'll say that.

522. 1:18:51

     Right. And then-

523. 1:18:52

     And I know you're, you're ... It sound like you're advocating to change the distribution.

524. 1:18:55

     Yeah. And later on in here, there is a provision in, I think, in 2032 to renegotiate.

525. 1:19:00

     Mm-hmm.

526. 1:19:00

     And then at that point in time you can change the distribution. And we say in that section of the bill, it's by intergovernmental agreement, and then we're working with, uh, with Chairman Blackmon on a, on a default if they can't reach an intergovernmental agreement. So i- in, in 2032, we could in a sense, you know, create a new distribution.

527. 1:19:19

     And, and, and I guess my position would be if we're gonna do this, let's disrupt everybody the least amount possible i- in whatever we do. 'Cause, you know, I don't wanna do that. Um, Senator Hickman, if you wanna go ahead real quick and then-

528. 1:19:32

     Well, just real quick. I'm, I'm in one of those counties. Bulloch County has a extra 1% for schools.

529. 1:19:37

     Yes.

530. 1:19:38

     How does all this LOST, FLOST, XYZ, ABC affect my county?

531. 1:19:43

     So I don't know that it does, 'cause you're one of the counties where you've got a low constitutional amendment where you have a, a LOST that goes to the school system. You do not have ... And this does not touch the school. So it doesn't, it does not touch the E-LOST. This only would touch local governments where they have the county city LOST tax in place, and your, yours is not one of those. So I, I don't ... If Chairman Blackmon-

532. 1:20:04

     The original bill-

533. 1:20:05

     ... can make that assessment

534. 1:20:05

     ... in the House did have some effect on-

535. 1:20:07

     It did, but I think this bill affects schools

536. 1:20:07

     ... and they may, they may be still thinking from that original bill if you're hearing from your constituents, but this one has nothing to do with the schools. It doesn't affect it at all.

537. 1:20:15

     It-

538. 1:20:15

     No, the, the pennies, the pennies for the schools, you know, remain status quo. So if you had two, then you maintain those same two. Um- All right. Senator Harbin.

539. 1:20:25

     I'll ask this question. In our, in my district, one of our counties has an exemption for those who are 65 and over that there's no school tax at all. I go across the county line, and that's not true. That's a ... A- and they don't understand when they move from one county to the other what's going on. How does this affect a, the differential at, at, at all? None?

540. 1:20:48

     I wouldn't think it would affect it at all.

541. 1:20:50

     N- no, there's no exemption component to, to 1116.

542. 1:20:53

     Okay.

543. 1:20:54

     Um, that requires us ... That, if you were to exempt and take money from a, a district, then that does require a two-thirds CA type, you know, either legislation-

544. 1:21:04

     But local legislatures can change those exemptions if, if you choose to. Okay.

545. 1:21:08

     Yeah.

546. 1:21:08

     Let's go ahead and let, let Clint finish here.

547. 1:21:11

     Yeah. The, and the default that I was talking about that would occur in 2032 once you renegotiate and you don't have an intergovernmental agreement, that would need to go in on line 349 after the or. Right now it just says, "Or as necessary to provide funds to each eligible local government for property tax relief." It doesn't give any guidance as to what- How you split it there. So that's where that default formula, which would be in our opinion or our recommendation to be a pro rata sort of split based on how much homestead property tax is collected in each local government, that's where that would go.

548. 1:21:44

     Um, moving over to the, the, uh, revenue cap. So this is an ad valorem revenue cap, um, starting for the counties and cities, not the schools, uh, is, is on line 494 of the legislation. Um, one thing, so if you look on line 499, it says, you know, we're having this 3% or CPI that's gonna be added to property taxes that were collected, and it specifically says the amount of such revenues raised by a unit of local government which would be raised by the unit of local government from the levy of its rollback rate.

549. 1:22:16

     I just wanna point out that the rollback rate in current law only applies to our general M&O levies. So the city M&O levy, the county M&O levy. It doesn't apply to bond levies, special service district levies. So you have other property tax revenues that are being collected that aren't tied to that rollback rate. So y'all may wanna think about how does that addressed. Um, otherwise, you may be in- incentivizing people just to create a bunch of special district levies to get out from under that M&O levy, right? Or just create a fire district levy or whatever.

550. 1:22:48

     Um, 'cause that, again, I, I just didn't know if you all recognized that, but that rollback rate only applies to one particular type of property tax levy, not all of our property tax levies. And then, uh, we, we do appreciate, uh, Chairman Blackmon putting in the economic growth in the local emergency, um, as a way to exceed-

551. 1:23:07

     I put that in. Don't give him credit for that

552. 1:23:08

     Okay. We appreciate Chairman Hufstetler. Okay. Whoever put it in, it was a great idea. Um, we, we, uh, obviously, we don't wanna disincentivize economic development, right? We want our local governments to encourage economic development and the growth in their tax base because of that, and we have a lot of growing communities. I'm sure Bryan County where the Hyundai plant is going in, they're gonna need some of that revenue to, to pay for all the new services, for all those new homes, for all the workers that maybe eventually will live there.

553. 1:23:35

     Now, Chairman Blackmon's position, and, and it very well is correct, is that that growth is in law already.

554. 1:23:42

     Well, that, that was the use of the rollback rate, yeah.

555. 1:23:44

     But I wanted to make it explicitly clear in the bill that growth-

556. 1:23:47

     It is in the rollback rate, but again, like I said, only applied to the M&O levy.

557. 1:23:50

     Well, we're, we're-

558. 1:23:51

     Yeah

559. 1:23:51

     ... we're trying to make it extra language maybe, but it makes it clear in that.

560. 1:23:56

     The only other thing I'll say about the revenue cap, obviously with, especially with county government, just remember, 'cause we are the local arm of the state, we have constitutional officers that, you know, the sheriff, the probate judge, the superior court clerk, tax commissioner. We don't really control them. We have to fund them, but we don't control them, right? So there's situations that it can occur in those constitutional officers. I know in Fulton County, they're looking at a jail situation right now. And-

561. 1:24:21

     Oh, I've heard

562. 1:24:21

     ... and, and, and if they were to come under, say a, a court order, a federal court order dissent decree where they had to pay for that, I don't know where they'd get the money if there was a revenue cap. But there, there are situations like that that maybe apply to county government, that don't apply to schools, excuse me, that don't apply to cities because of the constitutionally mandated services that we do provide. Um, so there's, again, federal state requirements that, that are on counties. Uh, obviously, we can lose other types of revenues. Um, and if we lose other types of revenues, we may have to rely more, we don't wanna rely more on the property tax, but there could be situations where that would occur.

563. 1:24:55

     Anyways, the, I know that the revenue cap, some of our members are concerned about that it's sort of the only flexibility they currently have right now in their budget. Um, so if they're sort of capped on that, again, there is provisions in here to get around it. You just gotta have a local act passed or, or a local referendum. But that does take a little bit of time to do.

564. 1:25:15

     Or local legislatures can do it or a local referendum.

565. 1:25:17

     Right.

566. 1:25:17

     Yeah.

567. 1:25:18

     Right.

568. 1:25:18

     But I mean, it's, again, it's still you've got the, the growth, um, the, the rate of inflation. It's, uh, unlike my county of Florida, we've just got a flat freeze on there. I mean, there's-

569. 1:25:30

     Right

570. 1:25:31

     ... on, on the homeowners. But, you know, I think there's some, some ways, and, and we've seen this work in other states. I, you know, I have to add that.

571. 1:25:38

     And we do support, by the way, all, a lot of the additional stuff you put in there. Obviously, you cleaned up the notice of assessment. We even support doing the, you know, eliminating the opt-out on the, on the assessment freeze.

572. 1:25:50

     Mm-hmm.

573. 1:25:50

     We support that. So-

574. 1:25:51

     Most of the cities and the counties did opt in.

575. 1:25:54

     Right

576. 1:25:55

     Uh, originally.

577. 1:25:55

     Some that didn't, but, but-

578. 1:25:56

     Yeah

579. 1:25:56

     ... we've, we've maintained from the very beginning that we would support that a- across the board. So there's a lot of good stuff in here. Um, we, and we wanna continue to work with this committee and the chairman on just refining some of the-

580. 1:26:07

     All right. We appreciate your comments.

581. 1:26:08

     Great. Thank you.

582. 1:26:09

     Are they, are these questions for-

583. 1:26:10

     Just quick statement.

584. 1:26:12

     Uh, go ahead.

585. 1:26:13

     I, I just wanna state for the record, 'cause you did invoke Fulton County Jail, we're not gonna hear some story in weeks and months from now after we pass this that Fulton County could not address their jail situation because of this bill, correct?

586. 1:26:27

     I was just using that as an example of, of things that are constitutionally required of counties. So counties are required to have jails, whether they want to or not, and there, there could be the potential of a f- of, you know, the f- federal court come in and say-

587. 1:26:40

     Right, but-

588. 1:26:40

     ... "We don't think it's up to par. You, we're gonna change this."

589. 1:26:43

     That already is.

590. 1:26:44

     Right? So-

591. 1:26:44

     That already is.

592. 1:26:45

     But I, but I just wanna be clear. You're not stating that because we're passing, passing this bill, correct? 'Cause that's been going on for many years. Oh, yeah. That's, that, that's-

593. 1:26:51

     Okay

594. 1:26:51

     ... just an example.

595. 1:26:52

     All right.

596. 1:26:52

     Yeah.

597. 1:26:52

     Just checking. Thank you.

598. 1:26:53

     All right. Senator Hodges.

599. 1:26:55

     Um, thank you, Mr. Chairman. Just quick question for Clint. Um, what kind of feedback have you gotten from your members? I mean, this is not uncomplicated.

600. 1:27:05

     So obviously, mixed feedback. Um, you, you can understand, and f- you all are elected officials just like our members are elected officials. From a policy standpoint, a lot of our members would love to make the homeowners have less property taxes, 'cause that's probably where they get most of their complaints from when it comes to property taxes. So and, and this bill moves in that direction. Um, but there are others that, that, you know, may be concerned about how it affects the business community if they lose some of their current Property tax, um, break, right? So it's k- it's, it's where do you, where do you wanna give the priority, right?

601. 1:27:38

     So this legislation I think gives the priority to the homeowner, not to the businesses. Um, and so it kind of just depends on what your viewpoint is of that, and I probably have members that are mixed.

602. 1:27:48

     I've got six counties, and I think this would work great in my home county, and I'm not so sure what it would do in some of my smaller counties.

603. 1:27:59

     Well, I would, I would say as far as the, the penny sales tax, again, if they do the LOST and they've got the FLOST, those even out. So if we got the FLOST, you even that out, and then the, I don't wanna say it's gravy, but the additional penny for LHOST going straight to the homeowners. No business taxes are raised because of that. Uh, but the homeowners would be reduced further.

604. 1:28:24

     The... I- if I may, Mr. Chairman, just real quick. I mean, it's not something that hasn't been contemplated. There's a few things if you're looking at a income-producing property versus a non-income producing property, which is, you know, homestead versus non-homestead, basically. If you're income producing, just like my business, I mean, I've got all of the employees that are, many of them are homeowners. So they're gonna see the benefit. I may pay a little bit more, but I also get to take it against my P&L. So I mean, I get to take it against what my taxes would be.

605. 1:28:54

     So ultimately, that ends up half, and then I get depreciation on top of that. And guess what, what my employees save on their property tax, they're gonna go spend it. They're gonna go spend it at the businesses in their local community, and that's gonna churn in the community some more. So there are some things to, to consider along those lines as well, not to mention the cap that would prevent the increases year over year that some of these businesses are seeing right now. So you're gonna have a planing off of what those increases would look like over time. But I, I appreciate the question, Mr. Chairman. I think that's a great question.

606. 1:29:26

     And I do think previous versions of this, the, the locals in more rural parts of our state were concerned. If you look at the more rural parts of our state, most of them are staying underneath the cap now. So you don't see as much of the increases. I looked at Worth County, for example, as a good, good example in rural Georgia, but they have traditionally and historically stayed a little bit lower with regards to their increases, and the population hadn't changed that much. There's not as much growth. So usually, they're unaffected if you look at what this would've done maybe if it was implemented five or six years ago, not nearly as much af- affected by it.

607. 1:30:01

     All right. Well, thank, thanks for your testimony.

608. 1:30:02

     Thank you. That's, that's more than you wanted, Mr. Chairman, I'm sure. I, but thank you.

609. 1:30:05

     Did, did you have something for Clint itself or?

610. 1:30:07

     Uh, probably just in general. It's fine.

611. 1:30:09

     Okay, go ahead.

612. 1:30:10

     Uh, thank you, Mr. Chairman.

613. 1:30:10

     And cities can come on up. I think Jim's here if you wanna make your way up while we're doing this.

614. 1:30:14

     I think what Leader Anavitarte was saying has a lot of merit, that we should just remember that when somebody goes under a consent decree, like it happened years ago for the water and sewer here in Atlanta, um, where currently the Fulton County Jail sits, et cetera, that that is something to have be considered if they're gonna have to either increase their millage rate or they're gonna have to live within their means, et cetera. Of course, all this could be settled if the City of Atlanta would just give the jail to Fulton County that they already paid for. Let me say that on the record. Um, but what I'm gonna ask, uh, uh, Chairman Blackmon along with your, uh, office, is we all work together and come up with a single one-page talking points before we get to the next meeting, so that all of us prior to voting on this can have that conversation with our local elected officials to show them how this is different and better than it was in the past.

615. 1:31:00

     Thank you.

616. 1:31:01

     And there have been so many versions that people are, some people are making comments from three versions past, and I, and I understand that. If you're not here, you don't know the process. All right. Introduce yourself and...

617. 1:31:13

     Thank you, Mr. Chairman. Jim Thornton with, uh, GMA. We represent all 536 cities in the state, and, um, I appreciate, uh, you hearing this legislation. Uh, certainly want to, uh, thank Chairman Blackmon for all the work that he did on the House side. Um, he has, he has put a lot of time and effort into this. There have been a lot of iterations. I want to, uh, to just share a few concerns that cities have with the particular version that is now before you. Um, but I want to begin by acknowledging that, uh, GMA recognizes the goal of homestead property tax relief.

618. 1:31:45

     Um, our, our statement throughout this has been to try and if that's the will of the general assembly to, to provide additional homestead tax relief and to have the shifting around of the tax, um, burden, that we want to make sure it can be minimally disruptive. And I think, uh, Chairman Hufstetler, you used that term disruptive a minute ago. Try to make it minim- minimally disruptive because property tax is the primary mechanism for funding schools and counties. It is a significant mechanism for funding cities. Cities also are, are heavily reliant on sales tax already, but it is certainly a big port-- portion of that, um, portfolio.

619. 1:32:22

     We also want to make sure that we're balancing the, the different constituencies inside of cities, the homestead property versus the non-homestead property, and ensure that cities can still provide, um, a, a consistent level of service of public safety, public works, transportation, et cetera. Um, so to just focus on a few of our specific concerns, some of which you've already talked about in Q&A, um, we are very concerned about the LOST to LHOST conversion. Um, we're concerned about that because there are 144 counties and all of the cities in those 144 counties that currently receive funding from the local option sales tax, and they use that for a property tax rollback that applies to all property owners in the, in the community.

620. 1:33:08

     So that is, that has been in place now for, um, over 30 years, that most of those communities have had local option sales tax in place. It has been built into their budgets and their calculations. They, they understand how it works. They understand exactly how that benefit is applied and distributed, and everybody in the community benefits. Um, I appreciate what, um, has been placed in this most recent iteration, maybe a little dis- disagreement with Clint, but I appreciate the fact that you're not disrupting the 10-year cycle in this current iteration.

621. 1:33:38

     All of those 144 counties and their cities had to renegotiate those local option sales tax agreements in 2022, and they run through 2032. So those agreements are already in place. So we appreciate the fact that y'all have recognized that. But we do recognize that, that there will be some, um, significant shifting, um, as, as that rollback, um, uh, calculation changes. I might point out that again, y'all have recognized this in the most recent iteration in lines 142 to 144, where you have carved out the increase in the rollback rate from the TARBOR notices when LOST converts to LHOST.

622. 1:34:16

     And we appreciate that, but I think that is a recognition that in 2028, under this iteration, the, of the, of the bill, there will be a significant millage rate increase on commercial, industrial, and non-homestead residential, so apartments, rental properties, et cetera.

623. 1:34:31

     So, so if you have a FLOST that, that, uh, already in place with a, with a LOST, there shouldn't be an increase on those two. But you do have a few that have already put a, a FLOST in place.

624. 1:34:41

     So, so actually, there would still be an increase because the FLOST, in those 32 counties that have adopted the FLOST-

625. 1:34:47

     Mm

626. 1:34:48

     ... they are currently rolling back with LOST, I think 29 of them. I think 29 of them maybe have a, uh, have a FLOST and a LOST. But they're currently rolling back with LOST and with FLOST on their, on their m- general millage.

627. 1:35:03

     Mm.

628. 1:35:03

     But when LOST goes away, that would be an increase on the non-homestead component of their millage rate when LOST is eliminated, unless LHOST has sufficient extra cash to offset that, and that's a, that's a question that's on the table.

629. 1:35:17

     And in two-thirds of your cities, our data said it would have-

630. 1:35:20

     If they, but they haven't, but they haven't all implemented the FLOST.

631. 1:35:22

     Right.

632. 1:35:23

     Uh, a- and, and, and quite honestly, some of them have not implemented the FLOST. We have some cities that didn't implement the FLOST because maybe the county opted out of the 581 cap, or maybe one of the cities inside of the county opted out.

633. 1:35:34

     Mm. Yeah.

634. 1:35:34

     And so if you do remove that opt-out for the 25% of the cities and the 30% of the counties that opted out, that makes FLOST eligible. But remember, FLOST will require an intergovernmental agreement and a referendum. So it's not a-

635. 1:35:48

     Mm

636. 1:35:48

     ... guarantee. And I would like to come back to that and maybe I can make a couple other quick points-

637. 1:35:52

     Okay

638. 1:35:52

     ... and then come back to that, 'cause I do think there is a less disruptive way to go about this and achieve the same, the same goal. Um, we share the concerns that Clint mentioned about how you would use the LHOST to reduce property tax without a homestead exemption to fund with the sales tax, without some sort of c- you know, some sort of, uh, credit against the property tax. W- we don't think constitutionally we can create a different millage rate on different classes of property. We think that would be a, a uniformity issue, and that's what our city attorneys are telling us.

639. 1:36:26

     So I think there is a, I think there is a mechanism question about how that would work that we need to think through, um-

640. 1:36:31

     Well, we currently put a-

641. 1:36:33

     And-

642. 1:36:33

     ... a credit on there from the LOST anyway.

643. 1:36:35

     So the, no, but so the LOST actually is an across the board millage rate reduction.

644. 1:36:39

     It's across the ro- but you put on there how much it reduced.

645. 1:36:41

     Absolutely, 100%. And on FLOST, you put the dollar amount. But both of those are across the board, meaning that y- uh, Chairman Blackmon's office building and his home-

646. 1:36:50

     Mm

647. 1:36:51

     ... see the same, would see the same reduction, right? You have the same, you don't-

648. 1:36:54

     Mm.

649. 1:36:54

     The millage rate is across the board reduction as opposed to segmenting out one particular, uh, class of property.

650. 1:37:02

     I, I don't mean to interrupt, but the, the, these two gentlemen have put in countless hours. You and I, we know we sacrifice. We, you know-

651. 1:37:09

     Yeah

652. 1:37:09

     ... that's what we're in for. That's what we're doing here. But I was just gonna say, Mr. Chairman, that, uh, you know, with, with all, all due respect to both of them, when we mention the six and a half billion increases in property tax over that 19 to 24, you know, 2019 to 2024, we've seen this three and a half billion dollars of increases in sales tax, thanks to marketplace facilitator and other-

653. 1:37:32

     Mm

654. 1:37:32

     ... other reasons. So there's extra and excess money being, you know, collected there.

655. 1:37:37

     Yeah.

656. 1:37:37

     Something to consider as we talk about these sales tax.

657. 1:37:40

     A- a- and, and, and I, I, that was not, that was not the, the point I was going to, but I do agree with Chairman Blackmon that there has been an increase in sales tax. We appreciate marketplace facilitator and all the other things that have, have gone into to do that. And if the general assembly wants to shift from more reliance on property tax to more, to more reliance on sales tax, I think that's something we can implement. But we need to make sure that it's not disruptive, and that it also doesn't create winners and losers between different classes of, of property owners. That's what-

658. 1:38:05

     So we, we need to have-

659. 1:38:06

     That's the concern

660. 1:38:06

     ... we need to have a, a credit, not a lower millage rate, but a credit that just goes to the homeowners.

661. 1:38:12

     Some sort of mechanism that, that, that, that can, that can, um, that can break, uh, uh... Homestead exemptions are an exception to uniformity. Uniformity is the default rule, and homestead exemptions are an exception to that. We need some type of exception to uniformity in order for us, cities, county, school board, or cities and counties in this case, cities, counties, to be able to constitutionally favor one class of property owners over another. That's-

662. 1:38:38

     Mm

663. 1:38:38

     ... that's the, that's the concern. Um, m- moving on quickly, um, so w- we have, we share the concerns about the cap, and I think the questions that were raised about the possibility of consent orders and so forth are part of that. There are so many things that can be unexpected, um, coming down the, coming down the road for local communities. Um, the 3% or CPI cap, we understand how that would function, and we appreciate the fact that you have built in, um, exceptions for growth, but also exceptions for emergencies.

664. 1:39:10

     State of emergencies are built in. Um, and, and this is nothing new for Chairman Blackmon. On the house side, we suggested that there could be some additional exceptions for court orders, that if a court order did come in and say, "You have to rebuild your, uh- Sewage treatment plan, or you have to build a jail or something like that, that that might could be a carve-out. We also have a concern about bond pledges, because we want to make sure that there is no, um, disruption of the cities' and counties' bond ratings and their ability to pledge their revenue, their full faith and credit pledge, when they have to build some of those large projects and go to market.

665. 1:39:42

     And then, um, one of the things that we have alluded to is the great increase in sales tax, and we all, you know, recognize that sales tax numbers, uh, receipts for the state as well as for the locals, have increased dramatically. That has not always been the case, and there were years, exceptions that prove the rule maybe, but there have been years in the past when sales tax rates have declined, such as in the Great Recession and so forth. And so one of the things that we suggested was an exception to the cap in... And it's a dollar for dollar sort of limit.

666. 1:40:13

     I- if the sales tax did go down by a million dollars from year, you know, 28 to 29, that that would be an exception to the cap, because the money has to come from somewhere. The only thing that local governments control, for better or worse, the only thing they control is the property tax. They don't control the sales tax. They don't control the other fees and, and, and occupation fees and all of that that come in. That's handled by the economy. The one thing that they have to do to balance the budget is consider property tax at the end of the day.

667. 1:40:44

     So that's, that's one exception. But m- my final point, and I'll be glad to answer any questions, is in terms of a less disruptive way to go about this, um, 144 counties have a LOST. They've negotiated those. They, they're, they're working. They're built in. Um, the comment has been made, well, if we convert LOST to LHOST, you can always then go out and ask for a FLOST to replace the LOST. And so the question is, why are we, why are we eliminating LOST and replacing it with LHOST and then doing a FLOST to replace the LOST?

668. 1:41:18

     It, it sort of has this, this circular nature to it. It, it seems like the much more straightforward and less disruptive way to do this would be FLOST is new. It's available, and if, and, and, and if, if the, uh, legislation moves forward to remove the opt-outs, it will be available in every county, essentially.

669. 1:41:36

     It'll be available this November.

670. 1:41:37

     A- and so, so it will be available in every county, and so, and, and the cities therein. So in the, in the 32 counties that have done a FLOST now, I understand there's an issue there that Senator Hickman m- mentioned. But in the other 130 counties out there that have FLOST available, they could do the LHOST in lieu of the FLOST, and that could actually be done, um, as a homestead exemption mechanism where it was voted on by the local voters, creating a homestead exemption, funded.

671. 1:42:09

     It's additive. It's new. It's not disruptive of something that's been in place for 35 years, but it becomes a new source of revenue to directly offset homestead using a formula mechanism, so there's no arguing about how that, you know, how that gets divvied up. And then if it eliminated the homestead, there would be additional revenue to benefit everybody else. But that would be a, that would be a simpler me- in our opinion, that would be a simpler-

672. 1:42:34

     I, I understand

673. 1:42:34

     ... way to do that.

674. 1:42:35

     Mm-hmm.

675. 1:42:36

     Um, and then those 32 FLOSTs have a five-year expiry. So if they're in year one, in four years, they could very easily convert to a, um, to an LHOST, and that would be, that would be no disruption in the sales tax base, and it might delay the homestead benefit. But you might could even give the, the voters a local referendum to convert early that FLOST by, um, by lo- it was cr- created by referendum, could be converted by referendum. Um, so I would just pitch that out there. We think that would be less dirup- disruptive.

676. 1:43:07

     Um, we think that would be, achieve the s- the same goal that we all have, but it would do so without having the immediate adverse effect on non-commer- on non-homestead property in 2028. Um, and-

677. 1:43:20

     All right

678. 1:43:20

     ... and, and one, one last comment I'll just make, and I, and I'll be quiet. Um, we have a lot of cities that have local millage rate caps, and if you do move forward with the LOST to LHOST conversion, all of those cities are going to have no choice but to raise their millage rate above the cap on their non-homestead property. The math wouldn't work otherwise. Um, and w- and so, uh, Sandy Springs, for example, I know has a 4.7 mil cap. If they eliminate homestead, they will have to raise their, the non-homestead property above that 4.7.

679. 1:43:56

     We have offered language to Chairman Blackmon, and be glad to offer it to you as well, Chairman Hufstetler, that that would essentially remove those millage rate caps for the purpose of that conversion if that's the direction that the committee decides to go.

680. 1:44:10

     Okay. I'll, I'll, I'll... Valid points, and we appreciate your testimony. We'll continue this process. Um, I think I'm wearing out the committee or they've got- ... St. Patrick's Day parties to go to. So, uh, we'll continue this. We appreciate everybody's hard work on this, and meeting adjourned.