Gold Dome Report - January 11, 2017
Today marked Day 3 of the legislative session. Lawmakers welcomed Governor Nathan Deal in the House Chambers where he gave his annual 'State of the State' address.
Licensed massage therapists from across the State and who are members of the American Massage Therapy Association–Georgia Chapter were on hand today in the Capitol. These folks were present to provide therapeutic massage by licensed, regulated therapists to members of the General Assembly, their staff and guests as well as educate folks about the benefits of massage therapy. The therapists were also recognized in the House by Rep. Lee Hawkins (R-Gainesville).
State of the State
Governor Deal provided the 'State of the State' address this morning – with the theme of "accentuate the positive." The full text is found here: http://gov.georgia.gov/press-releases/2017-01-11/deal%E2%80%99s-state-state-address-georgia-will-%E2%80%98accentuate-positive-eliminate.
In his remarks, the Governor noted that Georgia's unemployment rate is now at 5.3 percent (down from 10.4 percent in 2011) and the State's Rainy Day Fund Reserves have increased to about $2.033 billion. He has also released his Budget plans for the FY 2017 Amended and FY 2018 budgets (we will provide a more full report on these budget plans at a later point), which can be found at http://opb.georgia.gov/governors-budget-reports. He has based the FY 2018 Budget on a projected revenue growth at 3.6 percent over the FY 2017 Budget.
Among things mentioned were:
- A 20 percent pay raise for State-level law enforcement
- 19 percent pay raises (on average) for Division of Family and Children's Services caseworkers
- Another 2 percent pay raise for the State's workforce (on top of the 3 percent allocation for merit, recruitment and retention pay made last year)
- Increases in Medicaid physician reimbursement rates to bring them in line with Medicare rates
- $2.5 million for children's mental health services (children ages zero to four)
- Removal of barriers to mental health services to veterans – including the funds for a Women Veterans Coordinator position to help female veterans who have suffered military sexual trauma
- $311 million from the hospital provider fee (with renewal of the provider fee authority)
- Notification that the graduation rate has moved upward from 67.4 percent (2011) to 79.2 percent and the creation of the Teacher Advisory Committee – including a 2 percent salary increase for authorized State teacher positions (in addition to the 3 percent merit pay increases included in 2017)
Governor Deal did mention the State's failing schools, noting that at present there were 153 failing schools which served approximately 89,000 students. These numbers are up from 127 failing schools and more than 20,000 affected students. However, Governor Deal was quick to note that Georgia had increased education spending for k-12 by $2.017 billion in the last four years (including proposed funds for FY 2018) – with roughly 50 percent of all new growth in State revenue being targeted towards k-12 education.
Governor Deal also mentioned the work at Ft. Gordon with the Cyber Center of Excellence. He has also plans for the creation of the Georgia Cyber Innovation and Training Center.
House Insurance Committee
Early this morning, the House Insurance Committee under the leadership of Rep. Richard Smith (R-Columbus) met to hear more about the issues surrounding private passenger auto insurance trends and rates. Robert Hartwig, Ph.D, and a professor at the University of South Carolina, gave a presentation on car insurance rates and trends. He explained that this insurance was the most important type of insurance to the industry and that there had been an epidemic of serious automobile claims. Further, Dr. Hartwig indicated that the claims issue was more serious in Georgia than other places in the nation and the southeast. America is now driving more – not less – even though there are other alternatives such as Uber and Lyft. He said that there had been a sharp increase in miles driven in the last two years and this tracked the record number of auto sales in the last few years. People are also driving more now that we have edged out of the recession. Millions now are employed which also increases numbers of individuals driving. Cheap fuel prices have added to that, but gas prices have increased in the last few months. Insurers are now paying out $1.05 in claims for every premium dollar taken in; in 1995, that pay out was $.95 per dollar premium. Dr. Hartwig noted that Georgia's road fatalities are three times the national average – further, those death rates were up 8 percent in 2015 and 9 percent in 2016 (approximate as estimated). These deaths are despite all the advancements in automobile technology (such as side sensors on lane changes, etc.). Georgia Department of Transportation also has information on deaths, showing that there were 262 more deaths in 2015 over 2014. Other factors causing impacts on rate increases are higher vehicle repair costs; higher medical costs associated with injuries; and more frequent numbers of claims. Georgia's loss ratio is up 23.7 percent since 2010 – again, this is above the national rate. Dr. Hartwig did indicate that weather events drive volatility in comprehensive coverage (but there are also other factors such as vandalism and thefts). Dr. Hartwig stated that speed was certainly an issue in claims – speed limits are up across metro Atlanta. He noted that while he did see Georgia State Patrol officers on I-20 he noted that many individuals were driving well in excess of the 70 miles per hour speed limit. Dr. Hartwig believes that this is perhaps Georgia's number one health crisis – he said that he saw plenty of information posted about Zika virus but he has not seen anything posted about speed and other factors which cause highway deaths. In terms of "traffic density," he said that Georgia looks a lot like New Jersey. However, in the northeast there are more mass transit options and cars are smaller – here, there are no mass transit options and Georgians drive larger cars. Some of this information was provided as a result of the 25 percent increases in premiums for individuals covered by Allstate – however, the Chairman and Dr. Hartwig noted that this rate issue was across all carriers. Dr. Hartwig indicated that use of cameras might help deter some speed-related issues but quickly noted that individuals did not like cameras and felt that they were invasive of privacy. Lawmakers asked for other suggestions besides cameras. Dr. Hartwig did discuss gathering data, like how the Centers for Disease Control would approach a health crisis (looking at where incidents occur; circumstances; characteristics of drivers; and types of vehicles involved). There were other questions relating to whether claims with legal counsel involved drive up costs (yes).
Steve Manders, with the Department of Insurance, and Commissioner Ralph Hudgens were also present. They discussed how some rates were up 48 percent. They also discussed the challenges which the Department faces. There has been an increase in the numbers of filings for auto insurance. The Department of Insurance is using file and use rates for auto insurance – giving some time for review. Georgia now has more than 200 insurance carriers writing automobile insurance; however, smaller carriers have pulled out of Georgia. Commissioner Hudgens did indicate that he had the option to ask for an actuarial study when the Department found that rates were excessive – in those cases, the carrier is responsible for the actuarial review. Lawmakers asked if teen drivers were issues – Mr. Manders indicated that "distracted driving" was more of a problem. He reminded Committee members though that there were technologies available to address such (e.g., shutting off a cell phone if a car is moving at a certain rate of speed).
House Retirement Committee
Chairman Paul Battles (R-Cartersville) called the first meeting of the Committee to order. The purpose of this meeting was to hear updates from the Employees Retirement System (ERS) and the Teachers Retirement System of Georgia (TRS).
Buster Evans spoke on behalf of TRS. He explained that TRS is governed under Title 47 (Chapters 1, 3, and 20) of Georgia Law. As of December 30, 2016 TRS had $67.1 billion in assets. It has 230,562 actively contributing member accounts, with 24,614 members who are eligible to retire. There are additionally 263,135 Active Status Accounts and 119,142 retired members. During FY 2015-16, TRS paid out $4.2 billion in benefits with an average benefit of all retirees at $3,213 a month, or $38,556 a year. He indicated that they are very close to reaching the 7.5% assumed rate of return goal on investment earnings, which indicates the system is recovering from the recession, although progress has been slow. Employer contributions increased from 14.27% in FY 2017 to 16.81% in FY 2018. Employee contributions were at 6%. The number of active members in TRS has decreased, while the number of retirees has increased. This has led to a loss of 8,000 members since 2009. He explained that part of the reason is because many school districts cut out coverage under TRS as a way to control their budgets. The legislature made funds available to school districts and gave them flexibility in how they utilized those funds; however the decisions schools made has caused fewer people to contribute to the system. The total economic impact of TRS amounted to $533 million in January alone.
Jim Potvin spoke on behalf of ERS, which is responsible for administering five defined benefit plans: ERS, non-teaching public school employees, the legislative retirement system, the judicial retirement system, and the Georgia Military Pension Fund. They also administer three defined contribution plans and two life insurance plans. He noted that the increases in the required employer contribution rate have stopped. FY18 will be the third consecutive year that those numbers will remain flat. The good news however, is that mortality rates are improving for membership. The downside is that higher mortality rates mean individuals will remain in the system longer and will thus require more funding.
ERS is currently a $15 billion system and the plan itself is valued at $12.3 billion. They serve 48,000 retirees, with an average payout of $2,300/month. Investment returns are similar to TRS, which is relatively on track with the 7.5% for this year. The biggest difference from TRS however is that ERS can invest in certain private investments. Only .7% of funds are invested in private equity funds, but those investments have led to an increase in returns by about 2% more than public investments. Membership is lower than it was five years ago and payroll is now down to $2.3 billion. The GCEPS Tier, which is the 401k defined benefit component, is now eight years old. Half of membership is in that tier and the other half is in the second tier. Chairman Battles adjourned the meeting and indicated that future meetings will be announced.
HB 35, by Rep. Bruce Broadrick (R-Dalton), would create a new Code Section relating to the licensure of pharmacy benefit managers at O.C.G.A § 33-64-10. The new language requires pharmacy benefit managers to provide notification of receipt of a request for prior approval for a prescription drug to a pharmacy or contracting representative within 48 hours of receipt of such request. Such notification must also include a claim reference number and return contact phone number for follow up. This new code section shall only apply to health insurance plans established under Article 1 or Chapter 18 of Title 45 or under Article 7 of Chapter 4 of Title 49.
HB 36, by Rep. Ehrhart (R-Powder Springs), would amend O.C.G.A § 43-30-1 by making various changes to the definition of 'Optometry'. It removes the requirement that the State Board of Optometry establish a list of pharmaceutical agents to be used by optometrists. It also removes the requirement that prohibited a doctor of optometry from administering pharmaceuticals by injection. It would add new language that sets requirements for pharmaceutical agents that are administered by injection by optometrists. Such agents may not be sub-tenon, retrobobular, intraocular, or a botulinum toxin. Such injectible agents must be administered by either A) a licensed doctor of optometry who is licensed or certified by the board and who has obtained a certificate indicating completion of an injectibles training program; or B) A doctor of optometry who is enrolled in a qualified injectibles training program and who is under the supervision of doctor of optometry who holds a current license, or under a board certified physician in ophthalmology.
HB 37, by Rep. Ehrhart (R-Powder Springs), would amend O.C.G.A § 20-3-10 to prohibit postsecondary institutions from adopting sanctuary policies. It defines 'sanctuary policy' as any regulation, rule, policy, or practice adopted or administered by a private postsecondary institution that prohibits or restricts employees from communicating or cooperating with federal officials or law enforcement officers regarding the reporting immigration status information. 'Status Information' refers to any information, statement, document, computer data, recording, or photograph that would be relevant to the identity of an individuals who is believed to be illegally residing in the United States or who is believed to be involved in domestic terrorism or a terrorist act. The legislation prohibits postsecondary institutions from enacting any sanctuary policies. The punishment for institutions that do not comply shall be the withholding of state funding or state administered federal funding, except for those services specified in 50-36-1. This withholding of funds extends to funding for scholarships, loans, and grants.
HB 38, by Rep. Alan Powell (R-Hartwell), would amend O.C.G.A § 40-5-23 to provide for a noncommercial Class C driver's license for the operation of three-wheeled motor vehicles equipped with a steering wheel for directional control. It further includes, for a Class M license, three-wheeled motorcycles that are equipped with handlebars for directional control.
HB 40, by Rep. Scott Turner (R-Holly Springs), would amend O.C.G.A § 24-12-31 by adding a new subsection that requires veterinarians to disclose the rabies vaccination history of any animal within such veterinarian's care within 24 hours of receipt of a written request by a physician of any person bitten by such animal
HB 42, by Rep. Eddie Lumsden (R-Armuchee), would amend O.C.G.A § 21-2-293 to authorize election superintendents to take the necessary steps to correct any mistakes or omissions occurring in the printing of official ballots or in the programming of the display of the official ballot on DRE voting equipment for a primary or election.
HB 51, by Rep. Ehrhart (R-Powder Springs), would add a code section at O.C.G.A § 20-3-10 to require employees of postsecondary institutions, who believe that a felony has been committed by or against a student at such institution, to report such crime to the appropriate law enforcement agency or the district attorney of the judicial circuit where the institution is located. It would require that the investigation be done by law enforcement or by campus law enforcement that is staffed by law enforcement officers. An institution cannot bring disciplinary action unless the student in question has been found guilty; however, the student may be suspended while felony charges are pending if such student is deemed as dangerous to the safety and/or health of the student body.
HB 52, by Rep. Mary Margaret Oliver (D-Decatur), would amend O.C.G.A § 49-4-181 to include 'legal custodian' in the definition of 'Family,' relating to the Temporary Assistance for Needy Families program. It would also add 'legal custodians' to the list of individuals who are eligible for TANF assistance. Currently, only parents, legal guardians, and caretaker relatives receive such assistance.
HB 53, by Rep. Mary Margaret Oliver (D-Decatur), would amend O.C.G.A § 15-11-2 to change the jurisdiction of the juvenile court to now include children who are under the age of 18. It would update the definition of 'Child' to include individuals who are under the age of 18, instead of 17 as it is currently, when such individual is alleged to have committed a delinquent act. The legislation extends this change to the rest of the juvenile code.
HB 54, by Rep. Geoff Duncan (R-Cumming), would amend O.C.G.A § 31-8-9.1 to require an additional reporting requirement for rural hospitals. Under this legislation, rural hospitals must report any payments made to a third party to solicit, administer, or manage the donations received by such hospital. It further amends O.C.G.A § 48-7-29.20 by increasing the tax credit for rural hospital expenses from 70 percent, to 90 percent of the actual amount expended for single individuals and for married couples. It would also increase the maximum amount of tax credits allowed to $60 million (up from $50 million) in 2017 and would decrease the maximum number of credits allowed in 2019 to $60 million (down from $70 million).
HB 55, by Rep. Rick Williams (R-Milledgeville), would add a new code section at O.C.G.A § 43-1-14.1 which provides that any members of a professional licensing board who are appointed to a term beginning on or after July 1, 2017, shall serve no more than eight consecutive years on such licensing board.
HB 56, by Rep. Ron Stephens (R-Savannah), would add a new code section at O.C.G.A § 48-13-140, relating to specific, business, and occupation taxes. From January 1, 2018 to December 31, 2022, any person who enters a rental agreement with an equipment rental company will be charged a 1.5% fee (referred to as a "property tax recovery fee") on the total amount of the rental agreement, excluding charges for delivery, pickup, damage waivers, environmental fees, or other non-rental charges. Equipment rental companies are required to retain the revenue collected from such fee in an escrow account until ad valorem tax is assessed upon the company's rental equipment. The escrow account will be monitored by the Department of Revenue. Further, the equipment rental company must submit an annual report to the department detailing the amount of the fees collected and ad valorem tax assessed. If the total amount of the fees collected exceeds the ad valorem tax amount, the company must remit such fees to the department. Finally, the department must submit a report to the Governor and General Assembly before July 1, 2023 that contains the total amount of fees collected and ad valorem tax assessed at the county level.
HB 57, by Rep. Brett Harrell (R-Snellville), would amend the definition of 'Alcoholic Beverage' at O.C.G.A § 3-1-2 to include all alcohol, distilled spirits, beer, malt beverage, wine, or fortified wine.
HR 2, by Rep. Pat Gardner (D-Atlanta), proposes an amendment to the Georgia Constitution by adding a new Section IV relating to legislative and congressional reapportionment. The General Assembly would be required to reapportion the state during a regular session the year after the federal decennial census. If the General Assembly does not enact a reapportionment act before the session ends, or if such act is vetoed, a special session lasting up to 30 days will be established for adopting such legislation. If such act is not enacted during the special session, the Supreme Court must be petitioned to make such reapportionment. After the reapportionment act is enacted, the Attorney General must petition the Supreme Court to determine the validity of the act. If the act is deemed invalid, another special session lasting up to 15 days will be established and the General Assembly must address the Court's concerns in a new reapportionment act. Finally, the bill sets forth certain non-discrimination provisions that prevent a reapportionment plan that favors one political party or an incumbent.
HR 3, by Rep. Pat Gardner (D-Atlanta), proposes an amendment to the Georgia Constitution by adding a new Section IV relating to legislative and congressional reapportionment. The bill creates the Citizens' Redistricting Commission that is charged with the duty to conduct public hearings and meetings for the purpose of creating proposals for the redistricting of U.S. congressional and Georgia House of Representatives and Senate legislative districts. The commission will consist of 14 members (five Republicans, five Democrats, and four that do not identify with any political party). The bill details eligibility requirements for the members and the application process for becoming a member. The commission will dissolve after the approval or final rejection of each of the proposed redistricting plans.
HR 15, by Rep. Dewey McClain (D-Lawrenceville), recognizes and commends Kaiser Permanente of Georgia for being the State's largest nonprofit health care provider, serving more than 300,000 members in 28 counties around metro Atlanta. Specifically, the resolution recognizes Kaiser Permanente's Duluth Contact Center for its grand opening and for awarding a $5,000 grant to Viewpoint Health in Gwinnett County.
HR 19, by Rep. Katie Dempsey (R-Rome), honors and commends the Service Providers Association for Developmental Disabilities and recognizes their day at the Capitol on January 12, 2017.
SB 14, by Sen. Dean Burke (R-Bainbridge), amends O.C.G.A § 48-7-29.20 relating to tax credits for contributions to rural hospital organizations. The bill provides that members of a limited liability corporation, shareholders of a subchapter "S" corporation, or partners in a partnership are permitted a credit against the tax imposed by Chapter 7 of Title 48 (relating to rural hospital organization expenses) in the amount expended or $10,000 per tax year, whichever is less, on the portion of income on which such tax was paid.
SB 15, by Sen. Michael Rhett (D-Marietta), amends O.C.G.A. § 16-11-129 to permit a former law enforcement officer who served for at least 10 years and left such employment because of a disability arising in the line of duty and who receives benefits under the Peace Officer's Annuity and Benefit Fund to be issued a weapons carry license without paying the required fees under this Code section. Such individual must include his or her qualifications for eligibility for this fee waiver in his or her weapons carry license application.
Our 2017 Georgia Capitol team consists of Stan Jones, Helen Sloat, Chuck Clay, George Ray, and Logan Fletcher. We will also try our hand at tweeting this year – so follow us! @GDR_Live
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.