Senate Finance Committee, March 25, 2026

Transcript

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1. 0:42:59

   Sorry we're late. The floor took a while, and Rules Committee as well just finished. So I think we got a couple more coming down from Rules right now. Senator Albers, would you lead us in the invocation, please?

2. 0:43:09

   Yeah, please bow your heads. Uh, Lord, uh, while the days get longer and, uh, the stress gets higher, we know that Your abundant grace, wisdom, and discernment will give us all that we need to finish strong, Lord. So just bless this meeting, bless our time together. For it's in Jesus' name we pray, amen.

3. 0:43:27

   All right. Um, Chairman Blackmon, do you wanna come up and, uh... Where'd he go? There he is. Come on up here and we'll, we'll do the, probably the most important bill. Um, and to the committee, um, this probably still needs a little bit of work, I'll be honest on that point. But, um, we've gotta get something out. They're getting something out probably, and we've gotta get to work on it together. We're, we're hitting up some deadlines.

4. 0:43:57

   The bill we have has really several components. Um, we are leaving the, uh, caps in place that the House put in and the language of how that works if you wanna go above the cap. We're setting up an LHOST that actually would not be available until next year. I think we've got some creative ways to maybe look at something different on that. But right now, this would not be n- until next year. It would require local legislation.

5. 0:44:29

   Since it requires local legislation, it's too late for that this year, so we can't do it until next year. But again, we're working on some solutions to that as well. Um, and, um, the other thing that we'll look on this, and I'll, I'll have Leg Council look at this, is the House a couple hours ago passed out Senate Bill 566. They're not exactly the same, uh, but at the same time, I think we can probably go ahead and strike 566 from this version so that moving forward we will have, um, less in there to deal with.

6. 0:45:08

   So with that, um, Chairman Blackmon, any comments you wanted to make?

7. 0:45:14

   Uh, just thank you, Chairman. Thank the members of the committee for indulging, I think, uh, you know, a good bit of discussion on this bill. I know there are a lot of stakeholders here. And I was gonna say that, you know, I've talked to a lot of people that either misunderstood or had some bad information, and I appreciate them giving us the opportunity to kind of right that, uh, information and including many of you in this room. And, um, I did tongue in cheek wanna say that much, uh, of, of what, um, our friends up against the wall over here, uh, you know, have crafted, um, to go into the legislation has survived and some of it has not.

8. 0:45:51

   Uh, but, you know, we see, um, the, the, you know, some, some relief in future years. We see some predictability and some transparency. And again, I wanna thank you for working with us on, on this, Mr. Chairman.

9. 0:46:06

   Well, I think we still have some opportunities to, uh, make it happen sooner. But, um, the, uh, the mandatory, um, opt-in that we have also in, um, in, um, 382, S- Senate Bill 382 over there, does make everybody eligible for the FLOST. And I think we still wanna look at that being available by local resolution. So that's, that's where we go moving forward. It doesn't... Nobody under this bill is being, any of their revenue being cut from any sales tax whatsoever.

10. 0:46:44

    We would both agree on that. I know there's been some people, "You're cutting my revenue," and, and none of that's in this bill. Um, so-

11. 0:46:52

    Yeah

12. 0:46:52

    ... with that, um-

13. 0:46:53

    If I, if, if just, you know, one other thing-

14. 0:46:56

    Sure

15. 0:46:56

    ... I might say is that I, I think the people that, that we hear from outside of this building are what, what we've been working on this for, and that's who this is about. What we've been hearing inside this building are, are a lot of folks, you know, that are familiar with our process and know what's going on here. But, uh, the, the primary objective is our taxpayer, our, our homeowner, our property owner, uh, all across the state. So millions of Georgians stand to benefit from your work, uh, work of this committee, work of this General Assembly.

16. 0:47:29

    And, uh, again, thank you.

17. 0:47:31

    And I, I would concur with that. And when you look back at some of these trends over the last few years where we saw 74% increase in taxes in the county, 81% in the county, 107% in the county, uh, you know, the people are outraged, and they want some sort of control that would put this more in, in line with inflation. And as our, uh, Chairman of Appropriations, Blake Tillery, would tell you, since 2000, our budget per capita is no higher in the state of Georgia based on inflation than, uh, than it...

18. 0:48:04

    You know, there's no increase on that on inflation. So we're not asking anybody to do anything that we're not currently doing in the state of Georgia. And, um, we've certainly heard from, from a lot of those people. Any questions anybody has on the bill? Um, is that Senator Hickman?

19. 0:48:21

    Yes, sir. Th- thank you again for bringing this up. Just a clarification. The sales tax and all this tax that's gonna be charged is not gonna be expanded on any goods and services that are not currently ta- taxed. For instance, like rental property and, and things like that, or sale billing. So everything that we pay in taxes on currently for sales tax will be the same thing with this bill.

20. 0:48:44

    That, that is 100% correct, and we do not expand the amount of sales tax either.

21. 0:48:49

    Yeah. Thank you, sir.

22. 0:48:50

    The, a lot of states do have a much broader sales tax than us, but we're not broadening the sales tax at all. Um- So we're gonna need to, uh, strike, uh, this, this section of, uh, S- SB 566 from the bill. However, we'll first have to have a motion on the underlying bill.

23. 0:49:11

    Motion to pass.

24. 0:49:12

    Second.

25. 0:49:13

    We've got a motion and a second on the underlying bill.

26. 0:49:15

    We got an amendment.

27. 0:49:16

    Now we're ready for an amendment.

28. 0:49:18

    Uh, I'd like to delete line 677 to 833, and then also delete lines 869 to 970, and, uh, reorder, uh, per legislative council.

29. 0:49:29

    All right.

30. 0:49:30

    7 to 7.

31. 0:49:32

    This is redundant language. Yeah, go ahead.

32. 0:49:35

    677 to 833, and then 869 to 970.

33. 0:49:42

    That language passed out in the House this afternoon, so it's really unnecessary at this point. We weren't sure what would get passed out, so we had it in there.

34. 0:49:54

    Um, it was the, uh, tax appraiser part that was in the bill.

35. 0:49:58

    Lines again.

36. 0:49:59

    Lines again? Okay, lines again. We're gonna strike line 677 to lines 833. And then again, we're gonna do 869 to 970.

37. 0:50:14

    All right. We've got a motion, and that's per... I, I talked with leg counsel when the bill passed over in the House today and asked him to, to look at that and give us the language to strike out, which he's given us. So we need a second on that.

38. 0:50:27

    Second.

39. 0:50:28

    Second from, uh, Majority Leader Anavitarte. Any discussion on the amendment? All in, all in favor of the amendment... Or you have one?

40. 0:50:40

    I do.

41. 0:50:40

    Okay. All right. Ev- m- the amendment passed unanimously. Now, you had a question on the underlying bill?

42. 0:50:48

    I do.

43. 0:50:50

    Microphone.

44. 0:50:52

    Um, maybe two questions. The lost still translates to the el host?

45. 0:51:02

    No.

46. 0:51:03

    It does not. Okay. Then the question I have is that in some cities where there is already a millage rate cap...

47. 0:51:16

    Okay, here's the thing. Sandy Springs, for example, they have a 4.731 millage rate cap, but the new millage rate on other classes of property will have to be seven mills in order to keep the c- the city revenue neutral, for example. Is there an ability to put a raise of the cap that this bill then causes?

48. 0:51:38

    I'm not sure why, if we're not affecting their property taxes or their sales taxes, they're getting the same lost amount, there shouldn't be any change in the millage rate.

49. 0:51:46

    Shouldn't be, okay. Thank you.

50. 0:51:47

    I c- can

51. 0:51:48

    All

52. 0:54:57

    right

53. 0:54:57

    ...

54. 0:54:59

    County manager from Colquitt County, isn't it?

55. 0:55:02

    Colquitt County.

56. 0:55:02

    Colquitt County. We say Colquitt up north. I don't know, maybe. Uh, um, get- ca- can y'all get him a sub? Yeah.

57. 0:55:11

    Mr. Chairman, I'll try to be as brief as possible. I know the committee doesn't love tax credits, but this is a little bit of a tax credit bill.

58. 0:55:19

    So, so let me-

59. 0:55:20

    Go ahead

60. 0:55:20

    ... let me ask you. Well, I'll, I'll wait on a question, but go ahead. Go ahead.

61. 0:55:24

    Okay. Just wanted to say thank you for letting me... I've been in here multiple times, so appreciate the committee's willingness to hear me on multiple bills. Um, 1148 is basically a reauthorization of the Georgia Conservation Tax Credit. Uh, and I wanna preface the discussion here today by saying I think we can all agree that we've had a very successful state, a very pro-growth state. Uh, we have many programs that incentivize economic growth and development very well, and as a result of that, just a quick stat, as a state, we develop anywhere from 50 to 60,000 acres per year in development.

62. 0:55:59

    Uh, so just in terms of balance, um, we're trying to consider incentivizing some of our land to be taken off the table in terms of development, and to instead make sure that land is conserved for future, future generations, and that's the policy goal of, of 1148. So what the bill does is, uh, seek to set aside a very small percentage of those acres, uh, so that they can be protected from development in perpetuity. That's an important aspect of this tax credit.

63. 0:56:29

    So I, I need you to hold on just a second.

64. 0:56:31

    Sure.

65. 0:56:31

    I don't think this is the right LC number.

66. 0:56:33

    Okay.

67. 0:56:33

    So if you'd stand at ease for just a minute.

68. 0:57:07

    That's fine. I'm, I'm sorry my mic wasn't... And we'll have to come back to this bill in just a little bit-

69. 0:57:11

    Yes, sir

70. 0:57:12

    ... on it.

71. 0:57:12

    Appreciate it. I stand by.

72. 0:57:26

    All right. Uh, Representative, uh, Franklin, you wanna come up right now?

73. 0:57:39

    Thank you, Mr. Chairman, m- uh, members of the committee. I, I, appreciate y'all hearing this, uh, this bill. I know y'all got a lot in your committee, and so I really do appreciate you taking time to hear this, this, uh, this measure. Um, just to let you know, this, this came from, uh, my local Habitat for Humanity affiliate in my county. I support them financially in, in, uh, in all the ways that I can, and I asked them what we could do or what I could do, um, or what they needed legislatively to, to be, uh, more productive. And, uh, they gave me this idea.

74. 0:58:10

    And then through that, I went, um, on the state level and I, I, I met with them, and they all, uh, agreed that this was a, would be a really good measure for them, um, as well as the local principalities and my local, um, cities and, and, and county development as well, because there's a, a need to rehab, uh, the houses in, in my area, um, and in affordable housing. So you... I don't know if you have it in your folders, but you should have two, uh, sheets there, and it gives kind of a summary of what the bill does and a little bit about it.

75. 0:58:40

    But basically, this, um, it said the, the bill allows a tax exemption, uh, for-

76. 0:58:47

    We got this right, the LC number.

77. 0:58:49

    Oh, I'm sorry.

78. 0:58:49

    Yeah, we do on this one.

79. 0:58:50

    So it's L- LC LC443... Sorry, 501S is what I have. So, um, it basically is a, a, a tax exemption for the state and local level for the construction materials of, of, um, these homes that qualify, um, for organizations that are 501[c][3] public charities. And we've narrowly structured it to basically be, um, uh, you know, narrowly tailored to be a Habitat for Humanity organization.

80. 0:59:22

    Um, and, and the way we did that was that we, we put in there that it's a single family home. Um, uh, it needs to be that the, they have to live in the home and the, have the primary residence. They have to earn 80% of the area medium income or less. Um, um, and they have to, uh, uh, be able... It needs to be protected by a minimum 30-year resale rest- restriction on the household, um, with income, income below the 80%. And that prevents them from flipping the home. So, um, and that was the goal behind that. But, so it, I can go into more details about it or, or, or have questions for you, but the numbers that I have for it with, uh, it's on your, back of your page.

81. 1:00:01

    Habitat for Humanity does an average, or last year they did an average of 161 homes. Uh, they renovated 16, so it's 177 total. Um, the average, um, uh, cost, uh, for the State of Georgia for Habitat was, uh, 2,000 s- uh, $273,000 per home. So if you do the, the math with that, you're, you're basically looking at about a savings of about $7,000 per home, per unit, for each one that they, uh, produce and build.

82. 1:00:33

    Um, splitting that between the, the, the different taxes, uh, the state and local, you're looking at about a- around $3,000, um, in local contribution, and the state's looking at about, uh, 3,800 in the contribution that they would give according to those numbers. So it's a shared contribution with the local and the state. Um, and, uh, it's just an effort to give us more affordable housing in our area and to rehab certain areas in, in our downtown area. I'm happy to answer any questions if, if I can.

83. 1:01:01

    Yeah. So I, I know a, a bill presented in past years was a little different than this.

84. 1:01:06

    It was. Um- Well, first of all, the, the, the bill last year didn't have a sunset. This one does. It's got a five-year sunset on it. Um, what else did we do? I think we tailored it, um, um, to have, um-

85. 1:01:21

    I think we were given more of a credit back then versus-

86. 1:01:23

    Yeah, we were

87. 1:01:24

    ... exemption.

88. 1:01:24

    That's right. Yep, you're, you're absolutely correct.

89. 1:01:29

    Another bill I had in there to take out some credits, um, I thought that had a better chance of getting it passed, so I, I put in some in there to take out, some to put one in, but...

90. 1:01:40

    Okay. Um, fiscal note, I guess y'all see on there, um, this is, as he said, um, building housing. So I'm, I guess I'm maybe neutral on this. I'm not, I'm not great on these, but at the same time, it is a minimal impact cost, I guess.

91. 1:02:07

    Any questions by the committee? Senator Harbin.

92. 1:02:12

    Just curious, median income base, what, what, what is 80%? What, what kinda number is that?

93. 1:02:18

    Um, well, th- that's crafted in there to, to make it, to make sure that it comes from a Habitat for Humanity home.

94. 1:02:24

    Okay.

95. 1:02:24

    Um, and that's why that language is in there. Um, I don't think any other 501[c] qualifies, um, for that with that language, and that's the purpose of that in the bill.

96. 1:02:34

    Okay. Thank you.

97. 1:02:35

    And that's for the, Mr. Chairman, if I can-

98. 1:02:37

    Yes.

99. 1:02:38

    ... add on.

100. 1:02:38

     Sorry, what? Give me, hit your button. Okay, go ahead.

101. 1:02:41

     And that, that's, um, um, 80% of the county in which the, the, the house is-

102. 1:02:47

     That's my understanding

103. 1:02:47

     ... located. Yeah, so it will vary based on the county that they're in, in terms of the actual dollar amount.

104. 1:02:54

     That's my understanding.

105. 1:02:54

     But it's 80%. Uh, I'm ready to, to make a motion, uh, when it's appropriate time, Mr. Chair.

106. 1:03:01

     All right. Any questions from the committee? Um, do you have a question or you just-

107. 1:03:06

     Just, just one.

108. 1:03:07

     Sure.

109. 1:03:08

     Just, just one quick question. Representative Franklin, do, do, uh, do, do you know if Habitat has any other breaks on the purchase of construction materials, or they pay the same freight that everybody else does?

110. 1:03:24

     I, I believe, I haven't heard that if they do. I'm-

111. 1:03:27

     Okay

112. 1:03:27

     ... my understanding is they, they pay same as everybody else.

113. 1:03:29

     Okay. Okay. They do.

114. 1:03:32

     All right. All right. We've got, I guess we can take now a motion from Senator Orrock.

115. 1:03:39

     Right. I, I'd like to move due pass on, um, House Bill 1132. That's LC4435-01s.

116. 1:03:52

     Second.

117. 1:03:53

     All right. We've got a motion, second by Senator Hodges. Any other discussion? All in favor, raise your hand. All right. Passes unanimously. You know, I haven't been asking your Senate sponsors either. We're-

118. 1:04:08

     Oh

119. 1:04:08

     ... at a long day. I should've been asking that before, so.

120. 1:04:11

     My Senate sponsor's, uh, uh, Senator Billy, Billy Hickman.

121. 1:04:14

     Okay. And, um, 11, 1116, I will be the, the sponsor on. Well, I guess they both left me now trying to get these copies made. Um, we can get that information to them la- later.

122. 1:04:29

     Thank you, Mr. Chairman, members of committee. I appreciate it.

123. 1:04:31

     Thank you.

124. 1:04:35

     I'm sorry.

125. 1:04:43

     All right, Representative Stephens, you wanna come up?

126. 1:04:56

     Make sure I've got the right LC number. Miss... Thank you, Mr. Chairman, members of committee. I'm here to present House Bill 1209, um, LC 59-0359s, if that is the same LC you have.

127. 1:05:13

     That's the correct LC number, yes, sir.

128. 1:05:15

     Thank you, Mr. Chairman. This is a sales tax refund on extremely large project. We're trying to finish out the, um, build-out down on our River Street in, um, uh, in Savannah. It provides an incentive for a, um, uh, since our investment of $276 million to double the size of the convention center there in Savannah, uh, our hotel rooms requirement has increased drastically. So this sales tax refund, not an exemption, uh, is for the construction materials to finish these hotels and restaurants and other facility space that'll help meet the need for this, um, uh, hotel capacity.

129. 1:05:56

     The project brings short-term and long-term benefits, and the, uh, if the incentive is approved, uh, the project would begin this fall, um, bringing 300 immediate construction jobs with $100 million construction cost spent in the ma- in the first eight months. When completed in the fourth quarter of 2028, the half-billion-dollar project is expected to produce approximately 1,000 jobs, permanent jobs, um, and a total tax revenue of $12 million.

130. 1:06:28

     What they're requesting here to offset the massive increase in cost, building cost in the area, is a $7 million refund on sales tax after they have fini- finished the, uh, project, once they get their CO. And this project, either the 7 million first in aggregate or, um, the, the, uh, sunset, which would move from July 1st '26 to June 30 of '33. Mr. Chairman, that is the bill, and this should finish out our build-out.

131. 1:07:03

     All right. Um, any questions from the committee?

132. 1:07:11

     Uh, this is- if you see on the fiscal note, it looks like it's just got an impact for two years. This has been pretty narrowly tailored to where I think probably not much will qualify for this other than-

133. 1:07:23

     Yeah

134. 1:07:23

     ... than what you've got. So, um, all right. Don't see any questions. If someone wants to make a motion, they're-

135. 1:07:33

     I make a motion to debate.

136. 1:07:35

     Okay. A m- motion and a second. Motion from Senator Lee Anderson, a second from Nan Orrock. All in favor, raise your hand. All right. Opposed? One opposed. Passes one of six to one. All right. And who's your sponsor?

137. 1:07:53

     Senator Ben Watson.

138. 1:07:54

     That's what I figured.

139. 1:07:56

     Thank you, Mr.-

140. 1:07:56

     All right. Thanks

141. 1:07:56

     ... Chairman and members.

142. 1:08:01

     Yeah.

143. 1:08:10

     All right. Um, we do have the, the correct LC now. So, uh, let's see. We need

144. 1:08:19

     one, two, three, four, five.

145. 1:08:28

     All right. Go ahead. Come on up. Give you a copy of the LC.

146. 1:08:42

     All right.

147. 1:08:48

     Okay, Mr. Chairman, as I was saying, um, again, what we're trying to do here is just set aside some land, uh, take off the table for in terms of development through a tax credit. The ke- the primary purpose that we want to get this thing reauthorized. It, if, if not reauthorized, it ends this year, December 31st. Uh, a couple other points just wanna run through real quick. Again, it reauthorizes conservation tax credit for another five years through December 31st, 2031.

148. 1:09:19

     Uh, it caps the value of the, of the tax credit of 500,000 for individuals and one million for partnerships. Uh, reestablishes, we- the aggregate of credits back when this first became about was $30 million. Um, I'm certainly willing to work with the committee on that number as the most important-

149. 1:09:37

     We, we've got a, we've got a sub here that had it at, uh, 10 million.

150. 1:09:41

     Yes, sir.

151. 1:09:41

     Now, the, the, um, the original amount was four million. Um, and, um, I guess we can, we can do this in a different order, but, but question, I got a couple of questions on it. Um, lines 29 and 30, and maybe ledge council could even help me out on this too. We're, we're saying fair market value means the value of the donated property is determined, and we're, we're, uh, cutting out these subsections C1 and changing it to D and C2 and changing it to C.

152. 1:10:16

     So tell me what's going on there, because I've been on the floor and haven't had time to vet that particular line out.

153. 1:10:25

     And that's not new language. That's, that's in the bill you had for us.

154. 1:10:30

     You asking me, Mr. Chairman, or ledge council?

155. 1:10:32

     Well, whoever-

156. 1:10:33

     Mr. Ledge Council

157. 1:10:33

     ... can give me an answer.

158. 1:10:34

     Uh, I defer to ledge council, I guess.

159. 1:10:38

     I figured it was your bill and you had cut it for a reason. Yeah, step up here if you would.

160. 1:10:47

     So specifically as it relates to lines 29 and 30, I believe that's just re-designating, and I'm focusing here on the strikeout of C.1 underline of D, strikeout of C.2 underline of D. It's just re-designating those sections.

161. 1:11:06

     Okay.

162. 1:11:07

     Is that a D or something?

163. 1:11:08

     Yes, ma'am.

164. 1:11:09

     It is, yeah.

165. 1:11:11

     All right. And then the other, um, well, there were a few big changes. One going from 44 million to 30 million, that's a pretty big change.

166. 1:11:18

     It is. It's a big change. I agree, Mr. Chairman.

167. 1:11:20

     And, but also going from state properties to the Department of Natural Resources to certify this. So the only reason I bring that up is there were a lot of scams in Georgia a few years ago on these conservation easements, and the federal government got involved and a lot of people got in trouble. Um, so I wanna make sure we're not doing something that's gonna head in that direction again.

168. 1:11:48

     Right. Yeah. I think, you know, the reason with that was I think DNR wanted an independent agency to verify, you know, any s- any, you know, assessment values on property that's gonna be considered for this program. Some of the issues with going through the State Properties Commission was just the time it took for this thing to, to occur. Uh, a couple of points. In 2012, there were 126 applicants, and then between 2014 and 2019, there were 106 applicants, and in, in 2024, there were two applicants for the program.

169. 1:12:22

     So we're trying to do a little bit of streamlining there with the, uh, moving it to an independent, you know, someone that can verify the assessments on these properties, um, which is, will be the Georgia Real Estate Commission.

170. 1:12:37

     Okay. Um, so-

171. 1:12:40

     That'd be an independent reviewer.

172. 1:12:41

     Or who, who had the question over there? Senator Hickman, go ahead.

173. 1:12:45

     Yes, I just had a question. You know, and you mentioned, and this conservation easement was a disaster. I mean, so many of them would call. You know, I'd look to them, I'd never refer a client to those things, um, because the, the appraisal would trumped up so much. But, but does fair market value here mean the fair market value if, if, if a, if they build a mall on that property, or is the fair market value the fair market value of what the farmland is worth?

174. 1:13:12

     I think there's a, there's an appraisal done based on what, you know, could be developed there. Uh, I'm not exactly sure. Maybe someone could assist me this From Tall Timbers back there, but-

175. 1:13:22

     I think that's important.

176. 1:13:23

     Um, I know there's some comps that they use in these assessments.

177. 1:13:26

     Right.

178. 1:13:27

     Um, but typically I'm not sure if it includes like the full, um, use of the-

179. 1:13:30

     Excuse me, I, I gotta call you up just by our rules. But we'll, we'll call you up, um, when we, when we're ready.

180. 1:13:37

     We're gonna call him anyway.

181. 1:13:39

     Um, so, so what you're saying, and, and I know we'll get somebody up here to help out in just a minute, but what you're saying is that, um, the land is worth what it, what could be built on it then.

182. 1:13:54

     I'm not 100% sure, Mr. Chairman, but at, in some cases that could be the case, but I think that's why it's important to have that third party agency out there to confirm or back up any appraisal values. And they also have disciplinary powers too, to go after any bad actors.

183. 1:14:12

     All right. Senator Albers.

184. 1:14:14

     Thank you, Mr. Chairman. Uh, thank you, Representative Cannon. A, a couple of, uh, questions and comments. Uh, similar to what Senator Hickman said, I know there's been a lot of fraud in this over the years.

185. 1:14:23

     Sure.

186. 1:14:23

     So I've got a lot of, uh, concerns about that. Uh, how are we gonna be sure that if this goes forward that we're not going to have those same problems again?

187. 1:14:33

     Well, there's never 100% guarantee you're not gonna have any issues, but I do think the way we've kind of set up the language where we've talked with DNR, we've set up this third party in- agency, I think they feel comfortable managing the program. I think they feel comfortable with a third party, uh, person, you know, checking on the values that have been turned in. Uh, so I think the guardrails are there to prevent that. I think there's some federal language now that kind of constrains it. So I think if you look at all the stuff that's been done federally plus what we have in the bill, uh, I feel comfortable with.

188. 1:15:03

     I want this thing to make sure it works. Uh, I think DNR feels comfortable with it, and I think the Georgia Real Estate Commission feels comfortable with it.

189. 1:15:11

     So if, if we've watched people do this over the years, what happens, if I'm correct, is then they're not paying property tax either because it's been put into this.

190. 1:15:19

     I think there's still some property tax that takes place, but let me, let me confirm on that though, but, uh-

191. 1:15:25

     Well, I guess my question is it goes back to years ago 'cause we put, we, we'd updated the CUVA laws I don't know how many times in my 16 years here, and-

192. 1:15:31

     Mm-hmm

193. 1:15:32

     ... you know, we update it 'cause we want everything conservation.

194. 1:15:34

     Right.

195. 1:15:35

     Uh, until, well, unless we wanna do a wedding there, and then, well, unless we wanna do a rodeo there, unless we wanna do this there, and then all of a sudden we're doing 10 types of business there and nobody's paying any taxes, and the local government's just saying, "Well, we're dying 'cause we don't get any taxes," but then we allow everything to happen anyway. So it seems like we're, especially in our rural areas, we're, we're wanting to do something, but then we're doing it to the detriment of the other side.

196. 1:15:56

     I concur with your sentiment, and most of the, the, the bills you'll see from me will be clawing back from those carve-outs for CUVA or FLPA land.

197. 1:16:05

     Okay. Thank you.

198. 1:16:06

     Yes, sir.

199. 1:16:06

     All right. We've got a couple more questions, but I'll let you have a friend come up to help out.

200. 1:16:12

     Yes, sir.

201. 1:16:12

     If you want to come on up.

202. 1:16:14

     Come on up, Mr. Fleckenstein.

203. 1:16:14

     Uh, tell us who you are and who you're with.

204. 1:16:17

     Thank you, Mr. Chairman. Neil Fleckenstein with Tall Timbers Research Station and Land Conservancy.

205. 1:16:23

     Say, say that again.

206. 1:16:24

     Neil Fleckenstein, Tall Timbers Research Station and Land Conservancy.

207. 1:16:28

     Okay.

208. 1:16:28

     Accredited land trust that we work in, uh, southwest Georgia and north Florida. Um, I've heard some very good questions. Uh, the one question about, uh, the syndicated conservation easements, the fraudulent transactions, that was certainly an issue in the late teens, uh, up until about 2022. Um, the Land Trust Alliance and a number of land trusts around the country, including Tall Timbers, lobbied Congress to pass the Conservation Easement Integrity Act, and that Conservation Easement Integrity Act, which was passed in, I believe, January of 2022, essentially stopped the use of, uh, hypervaluation on syndicated conservation easements.

209. 1:17:08

     So that, that was addressed at the federal level, and then, um, accredited land trusts have never been able to hold those kinds of transactions in the first place. Um, the legislation you've got in front of you requires that, um, that these conservation easements be held by an accredited land trust. So we can't hold those hyperinflated conservation easements, and Congress has passed legislation to outlaw them.

210. 1:17:34

     What about paying their property taxes?

211. 1:17:35

     I'm sorry, sir?

212. 1:17:36

     Will they pay normal property taxes once it's in that easement?

213. 1:17:39

     Usually they're, they would pay like a green belt property tax, so a low- lowest value taxation.

214. 1:17:44

     Well, again, so that gets back to my point, right? It's the lowest value taxation. So we're in an area that is dying for revenue, and every time we do this, while it sounds good, then we're also undercutting what they're paying. So it's, it's just a little bit of a, uh, of a loop we keep creating that we wanna do something, but then it's hurting somebody on the other end. And there's, there's part of my challenge.

215. 1:18:05

     Yeah. A lot of the, uh, I would say that the projects that we're working on, we've worked on 38 projects through the Georgia Conservation Tax Credit. Um, those have been almost exclusively forest land conservation easements and farmland conservation easements, so those are, you know, working landscapes. Uh, they continue to be working landscapes with these conservation easements, um, in place on them. Um, so yeah, they are in a, a lower aspect of taxation, but they are a working rural landscape.

216. 1:18:33

     And just understand, what we have to deal with is, uh, folks that are trying to get enough money to do their schools. They're trying to keep-

217. 1:18:39

     Yes, sir

218. 1:18:39

     ... their fire department, their police department, and their locals going, and they're-

219. 1:18:41

     Understood

220. 1:18:42

     ... um, and they're struggling. And every time we do this, all we're doing is lowing, lowering the amount of revenue they're gonna get to take care of those things.

221. 1:18:49

     Understood. Yes, sir.

222. 1:18:51

     I think the revenue, I think the actual assessment value on the, on the property from the county level stays the same as it was before this easement takes place. So it's fif-

223. 1:18:59

     That's correct

224. 1:18:59

     ... it's a, if it's land that's enrolled in CUVA or FLPA and they apply for one of these credits, then the, the local government still receives that revenue as if it was not even part of the, the tax credit. Same kind of revenue. And they, it's subject to the millage rate increase, just like any other type of parcel in the county.

225. 1:19:18

     All right. Senator, uh, Harbin, you've got a question.

226. 1:19:22

     Um, as I would understand this, it has to be used for the items in line 19, and, and as far as what it can be used for. The donated property, um, is the valuation. Is it, are... A- and we... And I think is, is this gonna be... It says fair market. Is it whatever the appraised value is of the property with its current use, or is it its future use that it could be used for from that standpoint? And that's a lot of the issues that we've had with the syndicated land issues-

227. 1:19:50

     Right

228. 1:19:50

     ... is it was, it was a, a cow pasture, and then it was valued as a subdivision would, would be there.

229. 1:19:57

     Right.

230. 1:19:57

     And my question is under fair market value from that standpoint, what value is fair market from that standpoint? Is it the current use of the property?

231. 1:20:08

     It's the highest and best use of that property as judged by a certified appraiser.

232. 1:20:14

     Okay. And then my s- second, is that, uh, on line 33, you could give this property to a charitable nonprofit organization qualified by the Internal Revenue. You, so you could give this to any nonprofit, but it also says accredited by the Land Trust Accreditation Commission. Talk to me about how that changes that. If I wanted to give a 500-acre farm to a church as a charitable contribution, you're gonna have to approve that as I see from that standpoint.

233. 1:20:46

     Am I correct?

234. 1:20:47

     Yeah, the, uh... It would have to be, go to an accredited land trust. There's a very lengthy accredit- land trust accreditation process to ensure that the highest standards are in place for how those land trusts work with landowners and ensure, uh, the lands are taken care of, and they're, and done in a fiscally responsible manner. They're meeting all the standards of the conservation easement. This kind of goes back to the earlier question about the, um, syndicated conservation easements. So when you put a land trust accreditation kind of seal of approval on there, you're ensuring that it's, the, that the deal is done, it's, there's good dil- due diligence done throughout the process.

235. 1:21:22

     The easement is monitored by the easement organization. Uh, you have to meet all the standards and practices. So there's, there are about 1,000 conservation easement organizations in the country. I'd say about 400 are accredited land trusts, like Tall Timbers, Georgia-Alabama Land Trust, et cetera.

236. 1:21:37

     And what would happen is the person that owns the property, let's say it's 500 acres, that value, let's say it's $3 million, becomes a tax deduction to him or, or the persons that own that property, and then the property is locked in and I, and I guess forever and ever-

237. 1:21:55

     Perpetual

238. 1:21:55

     ... amen. Am I correct?

239. 1:21:56

     Yes, sir.

240. 1:21:56

     For what it can be used for. So basically, when we do that, wherever that property is, whatever develops around it, that property can never be used for anything except what it's been put there for.

241. 1:22:07

     Correct.

242. 1:22:08

     Okay. And-

243. 1:22:09

     But it could, it could stay as farming or forestry, and it could still be an income producing-

244. 1:22:13

     Correct

245. 1:22:14

     ... property as well.

246. 1:22:15

     To your point, though, the land continue- the, the landowners continues to own and operate and manage it and spend money on it and have capital costs and that kind of thing associated with the parcel-

247. 1:22:24

     Right

248. 1:22:24

     ... that's in conservation.

249. 1:22:25

     He used the example of a farm, and, and so can it be row crop? Can it be a dairy?

250. 1:22:31

     Yes, there can be-

251. 1:22:31

     So-

252. 1:22:31

     It can be row crop. It could be, um, you know, cattle, uh, cattle operation, uh, forestry, et cetera.

253. 1:22:39

     Okay. So I'm, I'm just asking. I got, I got a dairy farm with 200 acres. I can put that in this conservation issue, take a deduction for the land, but continue to use the land.

254. 1:22:50

     Yes, sir. That's correct.

255. 1:22:52

     Wow. Okay.

256. 1:22:53

     Yeah. It's, it's one way that we ensure the, the continuing use of, of land for crops, for forest lands, for, uh, um, agricultural uses.

257. 1:23:04

     Yeah. That's the whole point.

258. 1:23:05

     Ju- just keep in mind that land has to be there in perpetuity-

259. 1:23:07

     Yes, sir

260. 1:23:07

     ... and it can't change.

261. 1:23:09

     All right. Uh-

262. 1:23:10

     Yeah

263. 1:23:10

     ... I believe Senator Hickman was next.

264. 1:23:13

     Thank you, sir. Um, Mr. Cannon, thank you for bringing this. Uh, you know, we had a study committee a couple years ago, preservation Georgia farmland, so we are, we are very concerned about our farmland being developed away.

265. 1:23:28

     Yes, sir.

266. 1:23:29

     I agree with the concept. I just don't agree... I, I would think the fair market value needs to be fair market value of the farmland, not a what if situation. I totally agree with the concept, and I appreciate your, your concern on this, but that- that's my, that's my only hangup. I, I don't think this is, I don't think we ought to get into a what if situation and the state of Georgia have to pay for the what if. Thank you.

267. 1:23:57

     Sorry, Senator Hodges.

268. 1:23:58

     Following up on, um, what Senator Hickman was asking, um, highest and best use, uh, established by an appraisal. Appraisal always uses current zoning, right?

269. 1:24:11

     Yes, sir.

270. 1:24:12

     So if something's zoned farmland, you can't appraise it like it's gonna be a, a, a mall.

271. 1:24:18

     Yeah. You have to be realistic about what that, uh, highest and best u- I'm sorry.

272. 1:24:22

     Go ahead.

273. 1:24:23

     You have to be realistic about what that highest and best use can be. I would say the vast, vast majority of the lands that we work with, the highest and best use is, um, is forest land.

274. 1:24:32

     Yeah.

275. 1:24:32

     You can't take a piece of land-

276. 1:24:34

     Sure

277. 1:24:34

     ... in the middle of, of nowhere and, and say, "In the very imminent future, it's going to be a high-end golf course community for instance."

278. 1:24:40

     Well, you're o- I mean, you're using an appraisal. Somebody's gonna appraise it.

279. 1:24:43

     Yes.

280. 1:24:43

     And appraisal rules dictate-

281. 1:24:46

     Yes

282. 1:24:46

     ... that you have to use current zoning. Am I correct?

283. 1:24:48

     Yes, sir.

284. 1:24:48

     Okay.

285. 1:24:48

     And there's a third party to back up that appraisal, too. They're separate from DNR.

286. 1:24:52

     All right. Thank you.

287. 1:24:53

     Yes, sir.

288. 1:24:54

     All right. Uh, Senator Still, I believe it is. Is it, or is that Lee Anderson? Sorry.

289. 1:24:59

     Senator Anderson.

290. 1:24:59

     Go ahead.

291. 1:25:01

     Explain to me how, you're talking about the farmer could keep farming it, but then he retires, and then he passes away. The pad-

292. 1:25:17

     Mm.

293. 1:25:17

     What happens then?

294. 1:25:21

     I mean, sure. Uh, that, that land is protected by the conservation easement, so it cannot be developed. It can continue as a, a farm, or it could be used for forestry or other uses that are consistent with the, uh, the easement terms

295. 1:25:34

     So could it be passed on to the next generation?

296. 1:25:40

     Absolutely. And we're, we're saying that we've got conservation-

297. 1:25:44

     But if he, he does not have nobody to pass it on, then it just stays with DNR?

298. 1:25:50

     Well, the easement stays on the property, but that land can be sold pursuant to that conservation easement. So the land would continue to be protected, uh, and we've seen that now. We've had multiple generations where the conservation easements have been transacted with, with future generations.

299. 1:26:05

     One-

300. 1:26:05

     That easement runs with the land

301. 1:26:07

     ... one more question. What if the, the farmer files bankruptcy?

302. 1:26:15

     In terms of what happens to the conservation easement on the property?

303. 1:26:18

     I mean, yeah. Does the property ... It's still te-

304. 1:26:21

     Yes, sir. It's still under a conservation easement. Yes, sir.

305. 1:26:24

     Perpetually.

306. 1:26:24

     In perpetuity.

307. 1:26:25

     Per-

308. 1:26:25

     Yeah, perpetually.

309. 1:26:26

     In perpetuity.

310. 1:26:28

     All right, I think it's Senator Harbin again. You had a question.

311. 1:26:30

     Yeah. Let me ask this. As far as these nonprofits, could a nonprofit be a foreign, owned by a foreign entity? And I'm just saying, if that entity is a foreign entity, but it can be a charitable, is that a possibility, or is there any provision-

312. 1:26:44

     Mm

313. 1:26:44

     ... to deal with that? I'm just asking because we're trying to protect-

314. 1:26:47

     Understand

315. 1:26:48

     ... land from foreigners-

316. 1:26:49

     Yeah

317. 1:26:49

     ... owning our properties and doing things with it. Is there any provision in here that would do that?

318. 1:26:55

     Uh, so that would go back to ... Well, it's a little above my pay grade. Um-

319. 1:26:59

     Okay

320. 1:26:59

     ... but, uh, again, with the n- the nonprofit organizations, they would have to be an accredited land trust, a, a, a land trust accredited by the Land Trust Accreditation Commission, which is, I'm not aware of any foreign-owned entities that are land trusts in the United States, but-

321. 1:27:16

     The CUVA and the FLP laws do not allow foreign entities.

322. 1:27:18

     Well, I, I, I was re-

323. 1:27:19

     Yeah

324. 1:27:19

     ... uh, familiar. That's why I was asking here.

325. 1:27:22

     Right.

326. 1:27:22

     And I'm saying, I don't trust my enemies-

327. 1:27:24

     I understand

328. 1:27:24

     ... if you will, the enemies of the United States.

329. 1:27:26

     I understand.

330. 1:27:27

     And I think that's a question that we have to ask, 'cause I think-

331. 1:27:29

     Yeah

332. 1:27:29

     ... they'd do whatever they can to, to muddy up the mess, if you will.

333. 1:27:32

     Yeah. I, I think the, the inc- land trust accreditation process is in- incredibly rigorous. It takes, you know, literally years to go through, and there's all kinds of checks and balances in that. So I, I, I just don't know that that's-

334. 1:27:44

     I just wonder if there was any provision within your rules, regulations for foreign entities and knowing who owns it or who has control of it from that standpoint. That was my only part.

335. 1:27:52

     Okay.

336. 1:27:53

     Um, last part is, is, uh, lines 46, 47, 48. Is, it says, uh, "Real property which is used for the association with playing golf or is planned to be used or associated or shall not be eligible." Is it ... Am I correct that, um, it, it specifically noted golf? Am I correct?

337. 1:28:12

     Golf courses.

338. 1:28:12

     Courses.

339. 1:28:13

     Can't be a golf course.

340. 1:28:15

     Yes, sir. You're correct.

341. 1:28:16

     Soccer field?

342. 1:28:19

     Uh-

343. 1:28:22

     I think, uh ...

344. 1:28:25

     Yeah, I'm, I'm not, I can't give you a, a good answer on that. I'm not, I'm not familiar with that.

345. 1:28:28

     Okay. Just curious-

346. 1:28:29

     Yeah

347. 1:28:29

     ... as far as why we-

348. 1:28:30

     Yeah

349. 1:28:30

     ... we've got one sport, but bear with me. We have a, um-

350. 1:28:33

     Understood

351. 1:28:34

     ... we have the, um, National Soccer League down in our, our neck of the woods, and I'm wondering if they're, they put all their soccer fields in.

352. 1:28:42

     I, I think the, the important key would be, uh, and I have, I don't have the updated-

353. 1:28:46

     Yeah

354. 1:28:46

     ... legislation.

355. 1:28:46

     Mm-hmm.

356. 1:28:47

     But, uh, the conservation, it ha- have to meet the conservation purpose, uh-

357. 1:28:50

     Everything in 19 through-

358. 1:28:52

     And outdoor recreation

359. 1:28:53

     ... yeah, line 19 through 25.

360. 1:28:54

     And out- outdoor recreation was in here?

361. 1:28:56

     Right.

362. 1:28:57

     Yeah.

363. 1:28:57

     It is. Yeah.

364. 1:28:57

     Right. Okay.

365. 1:28:59

     And, and typically, when we think about that, we think about sort of passive recreation-

366. 1:29:02

     Okay

367. 1:29:02

     ... uses, trails, et cetera.

368. 1:29:03

     Bale, hay also.

369. 1:29:04

     All of them, including bale, hay, also. Okay.

370. 1:29:06

     All right. Um, Senator Still-

371. 1:29:08

     Okay

372. 1:29:08

     ... I believe that was you.

373. 1:29:09

     Thank you, Chairman. Um, Representative Kennedy, you and I have talked about this one before, and the concern I expressed to you was IRS audits. So-

374. 1:29:23

     ... reading from the IRS website, "The IRS aggressively targets syndicated conservati- conservation easements as abusive tax shelters, often auditing 100% of these transactions to disallow inflated deductions. Investors frequently face 40% penalties, tax liability on 7% or less. Key risks include overvaluation of land potential, failure to meet perpetuity rules," which talks to Chairman Anderson's question. And it says, it goes on to say, "The IRS listed these as top tax scams since 2019, designating them listed transactions requiring strict reporting." Are we setting people up for potential failure, potential audits, potential other issues?

375. 1:30:07

     Because, um, it allows for so much, uh, room for fraud, and I don't think any of our state agencies want to be in the business of monitoring that.

376. 1:30:21

     Down, going to hell.

377. 1:30:22

     Sure. I think it's a good question. I do think the federal law in 2022 addressed specifically your concern there, um, with the Charitable Conservation Easement Program Integrity Act, which I think put some guardrails around that. I cannot say that you will not get an audit based after this transaction, but, uh, I think, Neil, if you want to speak to some details, I think we can address your question.

378. 1:30:45

     Yeah, I mean, uh, Representative Cannon nailed it. The, the Charitable Conservation Easement Integrity Act specifically was put in place to address situations like you're saying, these hyper, hyper-valuated, uh, projects. They have very strict regulations that apply to, um, accredited land trusts like Tall Timbers, so we cannot accept that kind of transaction, and it's been by and large eliminated by the, the 2022 Congressional Conservation Easement Integrity Act. So that was specifically designed to address the situations you're referring to, Senator.

379. 1:31:15

     So you're saying that the number of audits have decreased since '22?

380. 1:31:19

     Um, I can't, I don't have statistics on the number of audits, but I know that-

381. 1:31:23

     Um, according to the Land Trust Alliance, the number of, uh, hyper-valuated syndicated conservation easements, uh, has almost been completely eliminated as a result of, of that Congressional Integrity Act.

382. 1:31:35

     Okay. Is anybody from DNR here?

383. 1:31:38

     I think so.

384. 1:31:39

     All right. Can, can you let... I need to let them come up here.

385. 1:31:43

     Thank you, senators.

386. 1:31:44

     And we're gonna... I, I'm gonna go ahead and say we- we're losing people. We're, we're, we're gonna have to not vote on this today.

387. 1:31:50

     Okay.

388. 1:31:51

     Um, we, uh, have got till Friday morning, I guess. But w- I, I'm getting texts from a lot of questions. And so go, go ahead, um...

389. 1:32:00

     Good afternoon, Mr. Chairman, or evening. Trevor Santos with DNR.

390. 1:32:04

     Uh-huh.

391. 1:32:04

     Uh, we do not have a position on the bill, but we do have, um, just some, some thoughts and some resources that would be needed if we were to fully administer and state properties were to come out. Uh, we do see an increase in workload. Uh, right now we've got, uh, two biologists that work on this program. But to fully administer, we're looking at the need for a grant specialist, additional biologist, and also the need for contractual services. Uh, our expertise is not appraisal, so we would need to contract with a certified appraiser to review those appraisals that come in.

392. 1:32:38

     If there are any that come in that would be overvalued, um, thanks to, to working with the, uh, the bill sponsor, we would have the ability to refer that to the Georgia Real Estate Commission. Uh, but there would be some resources needed within the department to fully administer this program.

393. 1:32:53

     All right. Does, does the state properties division that's been doing this, have they had real estate appraisers, either one of y'all know, or...?

394. 1:33:01

     I, I do not know if they have been doing that in-house or if they have been contracted.

395. 1:33:04

     And I don't guess anybody from state properties would be here, are they? I wouldn't expect anybody. Okay, we're gonna have to stop at this point.

396. 1:33:11

     I got, I got one-

397. 1:33:12

     One, one more question. Okay, Senator Anderson.

398. 1:33:15

     How, how would it work if the landowner did, did this, but then we had another, um, Helene and destroyed part of the property? Who's in charge of... I mean, would they, would it get cleaned up? And what happens there?

399. 1:33:36

     Well, I, I suppose that the land would still subject, be subject to the easement, uh, because it is in perpetuity. And any cleanup would have to be subject to the lines we talked about in terms of what it, you know, lines 19 through 24. Conservation purpose means the three things outline, or the couple of things outlined there for, uh, what the purpose of the easement is for. So I mean, it's hypothetical, but the land would still be subject to the easement. And whoever the landowner is would still be subject to some of the thresholds of managing the property that are in the language.

400. 1:34:13

     Okay. All right. Well, thanks. And sorry, we, we've got a few more questions from some people that we need to get answered in, in a couple areas on this. And part of it is that section that I'm, I'm still not sure what it says there on, on striking those sections and how the appraisal's done. But appreciate you presenting it to us.

401. 1:34:30

     Yes, sir.

402. 1:34:31

     And we've got one more we're gonna hear today. Um-

403. 1:34:33

     Thanks for having me.

404. 1:34:34

     Thanks a lot. HR, uh, 1000. I believe our majority leader in the House, Chuck Efstration's here.

405. 1:34:43

     The floor is yours.

406. 1:34:44

     Mr. Chairman. Thank you, Mr. Chairman. Well, the, um, LC on the agenda that I was aware of was the bill as passed out of the House. Uh, I do have an alternative, uh, to present to the committees today. But thank you, Chairman and members of the Finance Committee. I know you all are well aware of the struggles right now that we're facing, um, due to the closure of sawmills, paper mills, um, in the state, and the impact that that, that that's having, having, particularly on family timber farms, where, uh, right now, um, it is difficult to, uh, to even be able to see a path forward for the future.

407. 1:35:20

     We have circumstances where the expense, uh, or the revenue generated from, uh, timber harvest, um, is, uh, is, um, used to just pay the tax and then not even potentially left to replant after harvest. And as you all are aware, um, in Georgia, we tax... The, the severance tax is unique. No other commodity is taxed at harvest like timber. There's, there's nothing else. This committee's also considered legislation in previous years, I believe it was two years ago, a constitutional amendment that would, um, eliminate the timber tax across the board and then have a means of backfill to local governments.

408. 1:36:02

     I've taken a very different approach here because of the cons- the crisis that we're in right now, um, in our state. And, uh, the approach here is that this would only, the elimination of the timber tax would only apply w- if land is in conservation use. So be it CUVA, FLPA conservation, and only if it's to stay in that use. And, um, and as a result, the fiscal note is real- is about half of what it was for the, for the resolution that you considered two years ago.

409. 1:36:32

     So it's, uh, far less of a financial obligation involved. It will actually allow family timber farms to keep that timber farm in conservation, be able to replant, not sell cheap to private equity or other investors who are trying to buy land cheap. And so I'm very excited by this, uh, measure. I appreciate the committee's, uh, consideration. Now, Mr. Chairman, I want to thank you personally for the time you've afforded me to discuss this measure with you. An idea had come up at a certain point about a sunset potentially.

410. 1:37:05

     And so I have an alternative draft that, uh, that I have today to present to you, which would include a 10-year sunset. The only request is that if there's gonna be a sunset, it's a sunset across the board, so it's not gonna be, um, an unforeseen fiscal impact. It is just, it would expire in its entirety after 10 years, which is-

411. 1:37:26

     Well, you, you had provided me with that, and I'm... Maybe we had the wrong LC on the agenda, but- That's the one the committee has-

412. 1:37:31

     Yes, sir. Okay

413. 1:37:32

     ... is the 2037-

414. 1:37:33

     I- also, Mr. Chair- Mr. Chairman, um, the commit- if you don't have it, I have the fiscal note as well, which will correspond to the same dr- the same language that you have. The LC numbers, um, it is, it is for this proposal. And then also I have a one-pager, uh, that was, uh, placed on the desk in the House. I'm happy to-

415. 1:37:56

     Mm-hmm

416. 1:37:56

     ... pass these around if that's all right, Mr. Chairman.

417. 1:37:59

     Sure.

418. 1:38:03

     And, um, I-

419. 1:38:05

     So the, the-

420. 1:38:05

     Yes, sir

421. 1:38:06

     ... timber is not assessed while it's growing at all, is it? It's, it's only when it's harvested.

422. 1:38:11

     That's correct, at harvest.

423. 1:38:12

     So you would, you wouldn't pay any tax for quite a number of years, but when you harvest it, it's that-

424. 1:38:16

     And it's u-

425. 1:38:17

     ... two and a half.

426. 1:38:18

     As I said, we don't do that for cotton, soybeans, peanuts, any other commodity. It's, timber is unique in how it's treated.

427. 1:38:25

     Mm-hmm.

428. 1:38:25

     And, um, and you know, a lot of, um, colleagues that I've spoken to, uh, Georgians who have reached out to me about this resolution have said, "You know, uh, our, um, our livelihood is really tied up, um, in the, in the land and in our family timber farm operations, and this taxation is really preventing us from being able to continue to operate." And so my objective was to focus in on specifically family timber farms in conservation to allow them to have the, uh, the, um, the tax savings that would allow them to continue to operate.

429. 1:39:05

     Now, if they, um, if they breach and, or n- it's, the land is no longer in conservation use, then they're gonna owe 100%, and that's in this proposal. So I'd, I'd submit to you this is a very fair, even-handed approach that is actually a savings com- uh, compared to the previous version that this committee's conser- uh, considered, and I'd ask for the committee's favorable consideration at the appropriate time, Mr. Chairman.

430. 1:39:31

     And I, I, I guess some of the comments that I've heard and, and had some of the same was that we're basically, somebody's not gonna be paying their property taxes in a, in some counties, and then the state is gonna make up those property taxes, so the, the people from the rest of the state would be paying the property taxes for those-

431. 1:39:51

     The severance tax.

432. 1:39:52

     Yes, for the se-

433. 1:39:53

     The se-

434. 1:39:53

     But I mean, basically it's, it's, it's a property tax in that form. Senator Albers, I think you had a question first.

435. 1:39:59

     Thank you, Mr. Chairman. Leader Efstration, great to see you again.

436. 1:40:01

     Good to see you, Mr. Chairman.

437. 1:40:02

     Uh, first, your heart's absolutely in the right direction. Once again, uh, I think we did a great job with the House bill we passed, I believe, uh, two days ago on that floor, which was a tax credit for the folks that are trying to spurn the timber industry a bit more, and I actually didn't look at like a tax credit 'cause I'm fundamentally against those. I looked at it more as a disaster relief measure because that was the best way we could, we could get it to them. Uh, my concern, uh, is, is the precedence of doing this. Um, I'm not aware, and perhaps you are, of any place else that we would be doing this, and, and, and I'll let you answer this, but my concern is the next time anything happens, once we've done this once, that we're gonna be, "Well, if we just pay the city, county, and school taxes for this area for a certain amount of time," and I, I just, I see that, that spiraling in my mind, so help me understand.

438. 1:40:54

     Yes, sir. So as I understand it, when really this conservation classification came about, a part of the discussion at the time was that this timber tax would be in place. I wasn't in the General Assembly at that time, but, um, but as I said, it is very unique in how it exists, and I think that the purpose of, um, of putting this in place is to frankly preserve and save family timber farms right now because the, while that tax structure may have made sense decades ago when it was enacted, it is strangling those family timber farms, and it is going to cause Georgians to have to sell land cheap because they just cannot sus- they cannot pay the tax and replant and maintain the existing, uh, classification of the land.

439. 1:41:40

     So to answer your question, Chairman, I think that this committee, by proposing a sunset, helps to ensure that, Chairman Albers, your, your concern would not play out because this would be for a limited period of time, the 10 years in which that c- that classification would be in place, where we could actually see that it has had the desired effect in this crisis, and then it would expire as a matter of law.

440. 1:42:07

     For, uh, obviously this is Hurricane Helene, which, you know, I, I think we all know how bad it devastated Georgia. Uh, how does this play into the, I can't remember how many billions, but I know it's a big number, uh, came from the feds in order to help out these folks who suffered this, you know, immeasurable damage?

441. 1:42:26

     Uh, you're asking all federal relief? Is that what you're asking, Chair?

442. 1:42:29

     Correct. Yeah.

443. 1:42:30

     I j-

444. 1:42:30

     I just wanna make sure we're not doubling up on what has already been given.

445. 1:42:33

     Yeah, I don't, I don't have that, but this would be, obviously, uh, if timber was destroyed due to the storm, uh, that could not be sold at the rate it would otherwise be sold. And as I understand it, um, that, that has caused a significant loss for Georgians. So what we would be t- what we'd be talking about here is standing timber. You can see it in the CA. For standing timber at harvest, so those, that would be timber where presumably grant federal relief was not provided, right?

446. 1:43:04

     Uh, thank goodness, you know, that that, uh, farm wasn't impacted, but that, um, but that then harvest is to occur, obviously with prices, with the, with the cost right now around all the economic issues that I know you're well aware of and I don't have to detail for the committee, that this is gonna provide, um, more immediate relief. And, um, and also when, because I really looked at this issue at, at, uh, potential economic development projects or other ways to, uh, spur- Uh, greater demand or, you know, this, in my mind, was the way to most quickly provide relief to the Georgians that absolutely needed it.

447. 1:43:45

     And, um, and it would not be a circumstance, as I, I believe you're concerned about, where they, uh, their, these individuals would have already received relief. It's really the contrary that the, uh, financial cliff is there because they can't... Any, any, um, proceeds from the harvest are going to be used to, for taxes, and that then there's no money left to replant. And also, with the timber industry in decline, why not just sell to this, you know, to private equity that, that will buy it cheap?

448. 1:44:18

     Yeah, certainly understand. I, and perhaps offline, uh, I'd like to work. I, I don't know if Commissioner Harper has this or, uh, if it came through, uh, GEMA, but I'd love to figure out what FEMA grants came down, what did, what did we get already that's already there. And, um, and I hear what you're saying about a sunset. It just... I still have this concern of setting precedents that even though we set a sun-sunset for this, the next time it's gonna happen, I just don't know if there's a better way that we can figure this out that we don't get ourselves on the hook for the future. But I love what you're doing. I just, not sure I'm getting there in the same direction, but I'd love to continue to work with you on it.

449. 1:44:51

     Thank you for your question.

450. 1:44:53

     All right. Majority Leader, you're up.

451. 1:44:55

     And Mr. Chairman, Leader, thanks for being here tonight.

452. 1:44:58

     Yes, sir.

453. 1:44:59

     Um, I mean, a couple of questions, I mean, I mean, sort of to where Senator Albers is. But I know, you know, this session, last session, I mean, we've spent a lot of time passing legislation for, um, you know, a one-time natural disaster, which was pretty horrific for, you know, over half our state. Um, but one of the things that I feel like sometimes we fail to discuss, um, you've kind of hit on it, but I wanna go a little bit deeper, is, you know, in terms of the longevity and future of our state, you know, what, what are the true investments to the small farmer, to the, to the small landowner that we're gonna make, that once these one-time investments, because of Hurricane Helene run out, then what?

454. 1:45:46

     So it's a-

455. 1:45:47

     And, and I, and I think that, you know, when we look at what's been done in Florida and what's been done in other w- Midwest, even, you know, Southeastern states on this topic, um, you know, I think that preservation of land, but also the pres- preservation of the integrity of that family, there are other, you know, there are a lot of tools in the toolbox. I do view this as a tool in the toolbox. Um, but my concern is, you know, what, what are the other things we could be doing long term, you know, kind of like this?

456. 1:46:20

     Um, this is obviously outside the box. Other states have done this, so it's really, on a national level, this is not a new concept of any sort. Um, but, you know, to kind of pres- you know, preserve over half our state where this is kind of, you know, the prim- the primary, you know, product or, um, you know, usage of land, you know, being one of the, you know, biggest forestry states in America, if not the number one forestry state in America. I guess I should say number one since we're in Georgia. Um, but-

457. 1:46:51

     Oregon would argue with you, but okay.

458. 1:46:52

     Well, yeah, Oregon. They- They've got ducks, right?

459. 1:46:57

     You know, my daughter's at the University of Oregon-

460. 1:46:58

     That's right

461. 1:46:58

     ... getting her PhD, so-

462. 1:46:59

     She's a duck

463. 1:47:00

     ... let's not trash it too bad, but she went to Georgia undergraduate.

464. 1:47:02

     Don't get those politics.

465. 1:47:03

     Okay, there you go. Um, but I mean, talk about, I mean, in terms of, you know, kind of, you know, where, where are we going as a state, um, beyond the one-time event? 'Cause when we get into next year, you know, it's, it's, it's kind of a different story.

466. 1:47:17

     Well, thank you very much, Mr. Leader-

467. 1:47:18

     And years from

468. 1:47:18

     ... for the question. And I'll just, uh, express some of my thoughts. Hopefully, uh, this is responsive. But, uh, in addition to Hurricane Helene, which was incredibly devastating, we also have had economic devastation, which has rocked our state since we were last in session. I mean, I'll never forget where I was when I heard the news about International Paper, uh, closing with, uh, with... It just seems like the rolling news updating with, um, uh, with paper mills, sawmills closing, with, um, impacts on demand, uh, export issues, all kinds of, uh, issues in play right now.

469. 1:47:55

     Um, I think we are all well aware of, of the, uh, financial impact that that's having to our state. And being the number one, uh, state for, uh, for forestry, we are now in a posi- we're kind of at a crossroads. It's are we going to, um, do something about it to preserve the public policy interest of conserving use of land in our state, which used for, uh, particularly tim- family timber farms, I think is well worth the investment that's outlined in this fiscal note.

470. 1:48:30

     And, um, and so Mr. Leader, if I, if I failed to answer your question, I'm, um, am happy to reiterate. But that, that's how I, I view this objective. It is to help the Georgians who need it most with a state interest here and at a reasonable cost to the state.

471. 1:48:48

     Yeah. And I think, I mean, and how do you compare Georgia, I mean, based on your knowledge, I mean, how do you compare Georgia just briefly, I mean, to other states around us?

472. 1:48:56

     M- uh, Mr. Leader, it's my understanding that, um, out-of-state investors have been very actively purchasing land, uh, in North Florida and in other, uh, parts of our neighboring states for, um, really converting, uh, going from a conservation, um, um, agricultural, um, use of land to a, uh, developed use. And while I think that that is, uh, you know, landowners have the right to sell if they choose to, if you are forced into that based upon a state-imposed timber tax, a unique severance tax, not taxed similarly on any other commodity, then that's something the General Assembly should address so that we're not f- forcing those landowners into that same kind of outcome that, uh, that others, others unfortunately have faced in other states.

473. 1:49:50

     All right. And I'm gonna have to go pretty quick here because I'm 30 minutes late for healthcare, and they're needing a, a vote up there, I think. But, uh, Senator, uh, Harbin, you had a question.

474. 1:50:01

     I w- I would just s- I think there's ... I don't ... I agree with you that we don't tax anything like we do with timber, and the process of timber is 15 to 20 years or more. And it really, in my opinion, is an unfair tax. I understand that there are people that are depending on it, but yet when we look at the farmer or the timber grower, he's got risk too, and his risk to recover his loss is not, I hate to say this, it's not one year or two years or three years. He's got a 20-year part.

475. 1:50:31

     Yes.

476. 1:50:31

     And I've got, I've got ... Folks, I think, I think it's, uh, something that we've gotta think about. And my thing, uh, more than anything is just we've taxed a lot of things. And, uh, uh, the old adage of, uh, the Tea Party w- was taxed enough already, I think we've continued. So I think, uh, I like your thought process from that standpoint, but I think we've gotta also think about these are people that have to stay around for not just a year or two. They've gotta stay for a long period of time. So I like, I like that portion.

477. 1:50:58

     Yeah, and I think there's two questions there. One-

478. 1:51:01

     Yep

479. 1:51:01

     ... is this tax, should it be in place? And, uh-

480. 1:51:04

     At all

481. 1:51:05

     ... and then the second question is, so then if the county's not getting that tax, should the step- should the state step in and pay it from, you know, basically all the other people from that county? Um, and I also did see that, um, Alabama had a paper mill just close, and I don't know if y'all saw that or not.

482. 1:51:23

     Yeah.

483. 1:51:23

     But they've got one closing as well. Senator Albers, I think you're gonna have the last word, and we're gonna have to wrap up and let him close.

484. 1:51:30

     Yeah, just, uh, leader restoration, I've been, uh, texting with some of our ag folks here to get some more information. They're gonna try and pull some of that data together for us. Um, I do know that 531 million has been appropriated from the feds to, uh, victims, uh, specifically in agriculture for Hurricane Haro- Helene relief due to their, uh, current losses, their future losses, any damage to their crops and infrastructure, et cetera. So we know there's a lot of money that came down. Wanna try and get all that data so we can sit down and have a chat. Chairman Harbin, I very much agree with the sentiments you expressed, sir.

485. 1:52:03

     Chairman Albers, I appreciate that information, and I would just say, um, there, there are family timber farms that are severely impacted right now due to the economic crisis, which are separate and apart from the Hurricane Helene crisis. And so I just, um, uh, look forward to an opportunity to talk with you maybe further about how those dollars may have gone to Georgians who severely needed them, but we're trying to capture a different group that's in crisis.

486. 1:52:33

     Thank you.

487. 1:52:33

     And our, and our forestry association, which I guess those would be members of, but they, they told us the bill that we did pass out was by far the most important thing we could do, and we tried to craft that for them. Um, but, um, I understand, you know, this is, this is impacting elsewhere, and I appreciate that.

488. 1:52:53

     Th- thank you, Chairman. Just briefly on that, I am, I'm very passionate about this, and I do acknowledge that that legislation is critically important, and my only concern about a delay of this being a CA is that it would delay. If I wait until next year, then it's 2029 before ... And my whole desire doing this was to bring something to give more immediate assistance.

489. 1:53:14

     Mm-hmm.

490. 1:53:14

     And, um, and s- but thank you for the hearing only today.

491. 1:53:18

     And, and we did, we do have a five-year sunset on that one. Doesn't mean it won't get renewed, but we like to go back and look at them and everything. Thank you for coming.

492. 1:53:27

     Thank you.

493. 1:53:27

     Thank you for the presentation. Meeting is now adjourned.