The Legislature is ending its third week of the special session. There is still no agreement on legislation relating to the Governor’s authority during a state of emergency, with the House and Senate sharing differing ideas on how to restrict that authority. Timing is always critical in legislative sessions, but is especially so here. The legislature is set to adjourn in just over a week, which would force them to call themselves back to session to override any vetoes the governor may issue.
Other important measures are also working through the process before the legislative session ends on October 27. Read about their progress below.
Payment in Lieu of Taxes
The House passed HB 78 (Beaullieu), which changes the rules for PILOTs, Payments in Lieu of Taxes, a mechanism by which companies and local governmental units may negotiate upfront monetary payments in lieu of property taxes paid in the longer term. The bill will now move to the Senate, where it is expected to run into some difficulty with the Revenue and Fiscal Affairs Committee. Earlier this year, similar legislation failed once it reached this stage. The bill’s effects – if it’s even passed – are contingent on voters approving Constitutional Amendment 5 in November.
Unemployment Trust Fund
As mentioned last week, one issue flying under the radar that will have an enormous impact on businesses and unemployed individuals is the statutory triggers related to the Unemployment Trust Fund (UTF). Current law automatically increases the taxes businesses pay to the UTF when it is depleted to certain levels and automatically reduces unemployment benefits. The monetary floor that the UTF must get to in order for these changes to take effect has already hit and, and the higher tax will go into place at the beginning of 2021 without legislative action.
The Legislature is currently considering four measures to address these triggers: SCR 5 (Reese), SCR 9 (Cortez), and HCR 20 (Schexnayder) all of which are currently halfway through the legislative process. Each measure addresses the issue differently; the SCRs and HCR are suspensions of the existing statute until July of 2021, giving businesses a little more time to recover from the economic impact of the pandemic. BRAC is monitoring to see which, if any, of the changes manage to pass. No matter the outcome, the State will have to come up with the money at some point to repay a loan taken from the federal government to shore up the Fund.
The clock is ticking on the special session and everything must be finished by 6 p.m. on October 27.