Ways & Means Subcommittees 2.2.26

Hey. Good afternoon. If I could get everyone's attention, we can go ahead and start the income tax subcommittee, the ways and means committee. We opened session in prayer this morning, so I'll we're gonna dispense with another prayer right now. And today, we have house bill, which one are we doing?

House bill five one nine. Is that it? Yeah. House bill five one nine presented by a representative Stevens. Representative Stevens.

Thank you, mister chairman, members of committee. This is a work opportunity, tax credit. We currently have one on the federal side. This bill does nothing more, nothing less than allow folks that, don't currently have a job and basically unemployable, those folks that that, federally are designated, like, temporary, that are with TANF, that are on SNAP, ex felons, if you will, makes it very, very hard for these guys to, and ladies to, to find a job. So what this bill seeks to do is to, if the federal bill is renewed, and we think maybe it may, that this would add to it, and it would add up to for the employers an incentive to hire these folks and get them off of our, welfare system and get them to work, to be productive.

And it would allow for a $500, tax credit for the employer for each employee that qualifies, and there's about 10 of these on the federal side, and we can pick and choose how we want this thing to, to be, effective with a maximum cap per year of $10,000,000 for the whole program. It's a great opportunity for us to get folks to work, to give them some dignity. Goes right along with these folks that are that might have the opportunity to own a home one day. These folks, parents that might have had a child that, has taken a wrong path with the wrong group, and may have even gotten a record, and some that may have not. The veterans, of course, the veterans group likes this opportunity.

Some of our folks, unfortunately, are still not housed as well and cannot find a job. So, anyway, if an employer wishes to, participate, they can get up to $500 qualified per employee, tax credit, and with a cap of $10,000,000 statewide. Mister chairman, that is the bill, and that this being the first to mem first hearing, I I'll accept any questions.

It is hearing only. We do have a question.

Rep representative Prince. Hey. Thank you, mister chairman. Thank you, chairman Stevens, for bringing this. Sounds like a good plan.

Now this is just is it a just in case the federal government, decides to do away with it or this is hey. They're done. What it's it's gone. So let's put this in place.

This will be ours either way. If if the feds decide they're not, it would not be nearly as effective and and nearly, as valuable if you will. But this this one strictly focuses it on ours whether the feds do or don't. Thank you.

Are there any more questions for the author of the bill? This is a first hearing only. Well, hearing none, we thank you for presenting the this measure, representative, Chairman Stevens. This income tax subcommittee, the Ways and Means Committee stands adjourned. Thank you,

Okay. Ladies and gentlemen, we're gonna call the subcommittee meeting of Abilorum to order, And, appreciate everyone in the audience being here. Today, we're looking at h b three seventeen and h r one ninety two, both by representative Stevens. So, representative, I'm gonna turn it over to you and let you go with it.

Thank you, mister chairman. We've heard this twice before, last year. We're taking our time because it's a rather large bill. I would start at the the first question is what is a a a RID, a w r I d? And it's basically a public infrastructure financing tool, based successfully.

This particular bill is based on Florida's model, which has been going on since around 1990, and they've been extremely successful with it. I would remind everybody that this particular tool is being utilized in every single state surrounding us except Georgia. So it's a very good tool that allows us to not put, revenue or or or or infrastructure cost, at the exposure of the public because, land owners, essentially finance this. Back to what is a RID. It's a special purpose unit of government created by an ordinance of the city or the county, where the RID is located.

The RID is a governing board elected by the RID land owners, not a zoning or planning authority that resides with the cities and the counties. RIDs must comply with the comprehensive plan, ordinances, etcetera, of the city or the county. Why does Georgia need this RID? It is an expanded public infrastructure needed to support the development and investment. RIDs are proven and effective tool to meet the public infrastructure needs.

Again, as I said, in all of our states surrounding Georgia. Existing special districts options in Georgia are too cumbersome and largely constrained by the infrastructure of commercial and not residential investments. How can Ridge help develop, development? It is a proven tool to finance, construct, maintain the infrastructure and amenities. It is less expensive infrastructure cost.

The RIDs provide access to tax exempt financing bonds. If the cities and counties do this, of course, their bonds go out at the, and the public is exposed. The this, to cut to the chase, is the landowners themselves asking to put the burden on them and then to go out for financing. A wide variety of purposes, roads, drainage, utilities, landscape, and amenities. The debt is secured, and this is important, the debt is secured by a lien on the property, the property owners themselves, in the red.

The responsibility for paying the debt runs with the land, so if a person sells that, that debt goes with the land. It spreads the cost over time, which is also important. The infrastructure amortized over time as opposed to building all the cost into the sales of the projects upfront. Let me go through each section of the bill if I can, mister chairman, and I I promise I won't take too long. And again, this tool, if approved by local government, would allow the landowners within a red to tax themselves to pay for the public improvements required by local government to develop their property.

On lines one eighty eight through three twenty six of this bill, it creates, a group of land owners can petition to create a RID. A RID can only be created if all city, excuse me, if the city and or the county governments within the jurisdiction approve it. It's not something they can do themselves. It is not a private city. The legislation includes details, requirements for what must be in the red petition for the public the public to vote on before it can proceed.

Lines three twenty eight through five twenty eight, talks about the governance of the red. Each landowner that opts to come in has a vote. Lines five thirty four through five seventy nine talks about the infrastructure development process. No zoning, land use, police, code enforcement, or other regulatory powers are available within the RID. All of that resides with the taxing authorities.

But they would have powers beyond those related to the building and maintenance of infrastructure and must comply with all the applicable local zoning, planning, permitting, and development requirements. That rests with the city and county or county. The bill makes it crystal clear that RID's may only borrow money on issued bond against their own balance sheet. The bill is explicit that debt of a RID should not be an obligation of the state or general purpose or local government or any unit of the government in the state. This is all on the land owner.

Lines six ninety six through eleven forty. The core of the writ approach is that it allows the residents of the defined area to tax themselves uniformly and pull the funds to build the infrastructure within the RID that they use. This is done using bond financing. Mister Chairman, this pretty much hits the highlights of the bill. This is again a a function that, is available through all of our surrounding states.

Georgia has not had the opportunity to participate, in this particular type. I don't see this, being used very often. This is just a personal opinion in our well developed cities and counties, but I do see an opportunity, for some of our smaller counties, where they have to fund things that are required in the county and city. And it does become a chicken or egg. If you've got someone who wants to come in, and I'll just use Del Webb or one of those big, development systems, and they wanna come in and, develop a large portion of property, it makes it difficult for the county to put the infrastructure in before they can even build the development.

This bypasses that and allows those folks to put in the infrastructure within the guidelines of the city or the county, and within their ordinances, zoning, everything is is, as it should be, but it does allow for rapid development, with the infrastructure before something can be done. Mister chairman, that pretty much lays it out. We've, had an opportunity to talk about this last year for a couple of meetings, and and I do believe it's probably time that we have one more meeting. No problem.

I got some I got a question.

So Yes, sir.

Okay. Thank you, mister chairman. Representative Neal.

Thank you. Thank you to the chair. Thank you to, chairman Stevens. And so, I did have a few questions in relation to the bill and, just just for clarity. And so can you elaborate on how or if you've had responses from citizens in relation to, how this gonna impact, like, first time homebuyers or and or the work, force housing residents that may unknowingly buy buy into, like, the the long term housing costs.

Like, we're just like like speaking to, the appetite or just like the the environment of this, like, how people feel about knowing some of those things.

Very good question. And again, as as I mentioned just a few minutes ago, and I apologize as you were coming in, this is attached whenever to the on the landowner's deed. So it travels if he sells it. The owner knows whenever he purchases that land, that that debt is still outstanding. And until it's paid off, that debt rides with that property.

So they'll they'll know in advance, if this is something they want to get into.

And then related to how the bill I think it does address, like, how, that notification to buyers, like, how that works, per se?

It does. And it's, is is on lines twelve ninety through 13 o eight talking about the buyer disclosures so that every contract is required to have this red and bold, prominent, disclosure, that it is attached to their land as they're purchasing it.

Okay. And then, and sorry for, I was trying to do additional research. So, is it not true that this something similar to this happened in Florida?

Yes. I'm glad you mentioned that. 1990 and is whenever they started this thing, there's a lot of them that have been around. The latest one will be just outside of Jacksonville as they do about 2,500 acres there in a very large development, and they've used it successfully all over the state. The beauty of this is, and and since you brought up Florida, and and this applies to this red, exclusively, specifically.

Once the debt is paid off, typically, the red goes away and it's dissolved. So, and that that, remaining debt that rides along with the property goes away.

Okay. And from that experience with Florida, which I'm assuming that you have a lot of knowledge on, have there been any complaints about, voting power based on, that kinda not existing under this, on the under the umbrella of this bill. Like, can you kinda elaborate on what

that looks like? There's been no complaints. And we've got a letter, I think, in on your file that should be scanned in there that came from the tax commissioner of, of the county of Jacksonville. Okay. And they talked about, that specific issue that you you just mentioned and everything there was favorable.

Gotcha.

Yeah. So I think I I support the initiative overall, but there's just some, some consumer questions that I had when I was, researching some of the some aspects of the bill. And so, I look forward to supporting if you think they've been adequately covered.

Thank you, ma'am.

Alright. Thank you, Representative Deal. Chairman Martin.

Chairman Stevens, just a couple of questions. I think I know the answer these. Basically, what we're doing here is allowing them to do this and and create a financing, a favorable financing availability to to the developer. I don't have a problem with that, but that that's one of the things is because they could do this on their own now, but this would provide a bit of a more favorable, financing option for them, would it not?

It would. And some counties don't even have that option to do that. If you're a 2,000, 2,400 count county, it's gonna be difficult for those to even get to the infrastructure piece whenever they're really having trouble scraping the roads. But it is the financing option is what you're looking for.

So then that gets to to my second question. I know we've had this before but we it's been twelve months or so for or at least ten since we talked about it. So when the the debt is paid off from this and the county takes us the operations of it over. The idea there is these aren't private roads necessarily that they're building into the the area. Correct?

Into the the area.

Correct? Correct. Unless in the in the agreement between the county and the and the folks, they want them to retain the road. Typically, the enterprise funds, the water and sewer, the county wants to retain that because it generate revenue. But they could, within their agreement, ask to long term, maintain the roads, the major canals, those things are expensive.

But typically, once it's all turned over to the county, that's just then you dissolve the red.

Right. Right. That's what that's what I was getting at. So if it wasn't something that that in the agreement was not set as a private asset to stay with it, it would just it would have been a a county asset as soon as it was built. It's just being paid for, all I won't say when I say off off the county's books, not not off the books as in hiding it from anyone.

But in the truth, they would just be paid for on the the books of the red, on their balance sheet, on their their liabilities and revenue stream. And it would be something that basically a smaller county would not be able to bond for this based on their their current tax base. And, the the RID's being able to do that based on a balance sheet of a private company not just the the future development there.

And not on the backs of the tax base.

Exactly. That's what I mean. Right. Yeah. So you couldn't spread the you couldn't spread the risk of of a future development over a smaller county's tax base.

But a county, a company that would come in that is willing to take the risk could build that, on their own. My pleasure. Thank you.

Alright. Representative Neal, you have one more. Yes, ma'am.

Thank you, mister chair. Just a follow-up. So, when it comes to the this particular type of district where, residents have to use confirming they have to use the utilities, water, sewer, those services under that are that are strictly aligned

for this particular district. Confirming they don't have another option to use any other

utilities outside of the confirming they don't have another option to use any other utilities outside of the

No, ma'am. That's that's a good question. The, whenever you're creating this stuff, it's delineated upfront what the county and this red is gonna be responsible for. For example, you would not want to go in as a red and compete with trash pickup within the county if the county should have the first right of refusal to to provide that stuff. If the county already has water and sewer in that area, you would not want to create the, recreate the wheel, and the county would then have the opportunity to provide that first.

But the expansion of water and sewer, this type of stuff, typically is welcomed by some of the smaller counties.

Okay.

So that's that's open and in that contract that they sign going in. Okay.

And just a follow-up so quickly, how does how do HOAs fall under this type of, red?

You can still have an HOA. You can still have a tax allocation district or a CID, within this stuff. But and it does not affect, and this is another step, any of the, the millage rates that are applied by the counties or the cities. This is in addition to and the landowners know that going in.

Okay. Thank you.

Thank you, representative. Alright. So that's those are some good questions right there, and thank you, representative Stevens. Now you've got an accompanying bill that you wanna present at this time too. This is HR one seven one ninety two.

Let me I'll tell you on the one we just discussed on 03/17, the LC number was 442966. And the one we're fixing you're gonna discuss now, the HR, is LC forty four thirty one fifty three s.

And, mister chairman, that is the accompanying, constitutional amendment. If I can hold that until our second meeting, I'd I would appreciate it. I think we've got

Okay. Mister chairman. Representative Neal.

Yes. Thank you. So in reference to the second so I thought, pardon my ignorance, I thought it was two different types. Because it looks like the the constitution member for this, it looks like it's different from the bill that we just did. And maybe, like I said, maybe I'm not I'm not I'm misinterpreting it.

And maybe I'm misinterpreted because it doesn't say verbatim. We're not calling it the exact same thing that we're calling it under the house bill. Maybe that's what's throwing me off. We're calling one workforce and then Yeah.

Let me get your time.

We're calling the other one under

It,

And, unless I'm reading the wrong one, it poses an amendment to the constitution to provide general law creation of a comprehensive regulation of workforce residential development district, a red, to provide the submission of amendment for ratification and other purposes. So it it does follow the, the same bill.

Okay. Okay. Thank you.

Alright. Any other comments, mister chairman?

Thank you.

Okay. We've come down here come down here to the front now.

Members of the committee, my name is Neil Herring. I'm a lobbyist for the Georgia chapter of the Sierra Club and, for, Flint Riverkeeper and Chattahoochee Riverkeeper. We oppose this bill. We opposed it in the past. This bill passed in 2008 and went on the ballot.

The voters of the state rejected it in the February. I worked on that campaign, so I know it well. The Obama counties voted for the bill. The McCain counties voted against it by larger margins sufficient to carry the opposition, so the bill failed. The same project failed in the senate two sessions ago.

It couldn't get out of the committee, and it was because they were opposed to the bill. If you read the bill which I recommend well, I don't recommend it. It's terrible. But I do wanna point out a section at wait a minute. Yeah.

On page 46, lines eleven seventy nine through eleven ninety two. This has been in all of these bills and has disturbed me repeatedly. This says that the county if these people don't pay their taxes, the county cannot take the property. They can't put a lien on it. I mean, the county's putting a lien on me.

Fulton County's putting a lien on me now for my garbage bill. $29. This this says no liens on the property. It says it can't be attached. It can't be sold at public out cry.

Now a bunch of these things have gone broke in Florida in o eight. They went broke. Their lawyer was up here for the senate meeting. Very entertaining fellow. He said, some of those have, overcome the bankruptcy proceedings.

That was two years ago. Maybe more have since, but this is not. The problem with this is it increases the cost of housing by adding on to the cost of the housing, the cost of the development other than the housing. You're not just buying a house anymore. You're buying a house and a road and a bridge and probably a utility and who knows what else.

And this bill, most of the text of this bill is dedicated to the bond holders and their ability to recover their investment. That's what the bill's about, the bond holders. And that means, for practical matter, it's about the bond lawyers. Bond lawyers are paid. They're compensated based on the value of the security.

A percentage of the value of security is their compensation. The more it costs, the more money they make. The incentive on the developers is to drive the price up. And, I would also say there's an equal incentive to, trick the public, the buyers, as to, exactly what it is they're getting into. I I hope you all will reject this bill.

I hope it doesn't go to the ballot again, but I think it'll lose if it does. This is not a great idea. A new form of government is unneeded in this state at this time. That's all.

Thank you, mister Blue. Appreciate that. Mister chairman, you got any comments?

Yes. I do. And and and respectfully disagree. Ladies and gentlemen, we have counties, the other Georgia. You remember us talking about this whenever we had broadband.

You remember in '2 that was just before COVID, and I try not to get emotional on this. There were most of us sitting at this table were in, whenever our kids needed to study, to home study, they they didn't have a problem. But those folks in the other Georgia, this is what this bill I see benefiting. They didn't have an option except to drive to McDonald's to try to get a a broadband so they could study. They were left behind.

We've got counties that could use this and benefit because they don't have the means to go out and bond this and put the taxpayers at risk. We have a 159 counties. Florida's got 67. This mechanism has worked in every state around us. And with all due respect, it'll work in Georgia.

I believe the reason that it failed in 2008, if you might recall, the banks were going under. The state of Georgia had two days of operating capital. People were sticking money in their mattress. If we're ever going to develop the other Georgia, the rural Georgia, the ones that don't have the the tax base to to create the infrastructure needed to something other than a septic tank in a well in a in a scraped road. This is gonna be the mechanism to do it, and it will not put the taxpayers at risk.

Thank you, mister chairman. Reps chairman Martin.

I just I appreciate the gentleman's comments. I'm not taking him one way or the other, but he he made a comment. I wanna inquire something of our attorney if I can. If the chair would allow me, it it brings up.

Yes, sir.

To to that's fine. If you're you're you're down there, you might you might need to get to a microphone. But the the gentleman mentioned that, you know, should they not pay should they not pay the debts, you couldn't sell the property on the courthouse steps. I believe that is correct. I believe he makes a correct statement.

Would would you agree with that?

I am actually not the author of the bill, and I'm standing in for someone

so I can

get back with you offline and

get in contact with them for it.

Well, I would ask the author that that

is your understanding as well. Correct? Okay. But is it not true when this is where I want to get. Is it not true that the whole point of that is the people that the money is owed to is not the government?

It is it is a private contract between the landowner and the bondholders. So that's a private thing just like if if representative chairman Stevens, if you loaned me money and I didn't pay you back, I would you would take me to court. You wouldn't expect Fulton County to recover it for you. Okay. I just wanted to make sure I understand the the deal of of the reason why the the recourse would not be for selling the the property at the outcry.

I know we have other learned attorneys on the on the the the panel here. And and as the gentleman brings up a fair point, if if if he doesn't like the bill because of that, but it's not the government's job to collect the money in a private transaction. Am I am I am I am I correct? And, again, if if I'm putting you in in a in a spot with doing this, we can get that at a later date. But that that is my understanding from last year.

I'm perfectly, I I have the information I need, mister chairman. I'll leave it to you.

Alright. Let me state this before we go any further. This is a hearing, and we will have another meeting with another hearing and then a vote. So the vote's not taking place today on either one of these pieces of legislation. So you got a comment there, mister Neil.

Yes, sir. To respond to. The at the end of that section that I was telling where there's no liens or anything, it said that any political subdivision of the state with an interest in such taxes or liens may pursue a civil action against a district to recover the money. They can sue them, but they can't go auction the property. They can't get the money.

They can go to court. The other aspect of this that I should have mentioned before that is, actually more onerous for the counties than, the rest of it. The way it's written, the counties are obligated to collect the payments of the purchasers of the property along with the ad valorem taxes. It's a duty of the counties to collect the the the buyers payments to the developer that's in

the bill. I'm sorry. I can't point to that point place, but it's a long bill. I've got it marked on my copy.

I didn't know this was coming today. I would have brought my marked up copy, but that is a portion of the bill.

State that again. I don't know.

Yep. That that is correct. It's in the bill and it it and that is the agreement. And and understand that the red is going to be putting in infrastructure, and the agreement is the county will collect this portion from the, from the property owners.

Alright. Thank you, mister chairman. Members of the committee, any other any other comments from the audience? Thank you, mister Neil. Yeah.

Any other comments from the audience? Now any other comments from members of the committee on either 03/17 or January? Alright. We'll we'll send out a notice, on the next hearing for this and let you know, mister chairman, and you'll get one more time to show it. Alright.

Thank you, mister chairman. Thank you for the member's committee, and this meeting is now adjourned.