Dear Friends and Neighbors,
The last day for Senate-approved bills to be considered by House committees is this Friday, Feb. 26. Measures assigned to transportation and fiscal committees are not subject to the cutoff. Our next deadline, Friday, March 4, will be the final day to act on any bills, except for amendments, differences between the two houses, and conference committee reports. After that date, we will have just six days to conclude the scheduled 60-day session on March 10. I wanted to take this opportunity to provide a brief update of issues and legislation I am working to advance between now and the end of the session.
Revenue forecast released; House Democrats unveil supplemental budget
The revenue forecast released last week showed for the first time in about three years a decline in state revenues by $67 million for the current budget cycle (read my news release here). The response by Democrats as they unveiled their 2015-17 supplemental budget was predictably to propose taxes increases by nearly $400 million over the next four years.
Their tax proposals are the same ones they've trotted out over several years: real estate excise tax on foreclosures, sales tax on non-residents, sales tax on bottled water, and repealing tax preferences for travel agents, prescription drug resellers, and international investment services. In the past, none of these proposals have gained any traction.
I also predict these tax increase proposals will be dead on arrival in the Republican-led Senate. Now the budget negotiations begin between the House and Senate.
Listen to my podcast for more information on the revenue forecast and the supplemental budget proposal.
Eliminating the 'widow tax'
Under state law, a real estate excise tax (REET) is imposed on each sale of real property, which also includes the transfer of ownership and transfer of controlling interests. The combined state and local rate in most areas is about 1.78 percent. An exemption is provided for individuals who inherit real property and can provide a death certificate, along with one or more other documents, including a will, trust, community property agreement or court order.
A misinterpretation of the law by several county treasurers resulted in what is being called the “widow tax.” Surviving spouses were receiving REET bills because there was no documentation showing them to be the owner of the property after their spouses had passed, even though they legally inherited the real estate. To eliminate the widow tax, I introduced House Bill 2539. The measure exempts the heir or heirs from the REET if they provide a copy of the death certificate along with a lack of probate affidavit affirming the legal inheritance of the property.
The measure passed the House unanimously on Feb. 16 and is scheduled for a public hearing today (Feb. 23) in the Senate Ways and Means Committee.
Reducing the penalty for doing the right thing
Imagine discovering an error in filling out paperwork, trying to make amends by calling it to the attention of the state, and then getting surprised with a $660,000 penalty! That's what happened to a local food processing plant.
For the last 10 years, companies who wish to qualify for economic development tax preferences have been required to file an Annual Tax Incentive Survey or Annual Tax Incentive Report. A taxpayer who qualifies for a preference, but does not submit the survey/report is subject to a penalty of 100 percent of the tax preference claimed.
Five years ago, a bookkeeper for a local food processing plant filled out the report, but accidently entered correct information on the wrong line of the report. It wasn't discovered until recently and the company was forthcoming and brought the error to the attention of the state Department of Revenue, which turned around and fined the company $660,000 — 100 percent of the tax preference claimed, plus interest.
I authored House Bill 2540, which would reduce that penalty to 35 percent the first time it happens. People who do the right thing should not be thrown out of business because of a simple clerical error. The measure passed the House unanimously and awaits action in the Senate Ways and Means Committee.
Keeping government transparent while curbing abuse of Public Records Act
The state's Public Records Act is meant to allow citizens to have access to all state and local government public records. The government agency has five days to get back to the requestor with a time frame to have the records available. A person denied the opportunity to access those records may sue, and if the plaintiff prevails, he or she must be awarded all costs, including attorney fees, plus up to $100 for each day of denial to that record.
Some people have learned how to game the system and make profits from large requests that are impossible for many smaller governments to handle on a timely basis. This abuse is costing our communities hundreds of thousands of taxpayer dollars.
We all want open and transparent government, but we also need a balance that protects against abuse. I've co-sponsored House Bill 2576 to achieve that balance. The measure would allow agencies to set policies of response prioritization, based upon such things as emergencies, complexity and size of the requests. It would not change the five-day response time. My legislation also proposes an agency may, under certain limited and strict conditions, deny a massive request for all or substantially all agency records, but would not be able to deny on the basis that a request is overly broad.
To learn more about this issue, I invite you to read my opinion editorial, which has appeared in several of our local newspapers. Meantime, the measure is awaiting a vote on the House floor.
I'm here to serve you!
If you wish more information on these and other issues, please contact my office or visit my website at www.representativeterrynealey.com. Thank you for the honor of allowing me to serve you!