Cartersville and Bartow County State Representatives Paul Battles and Christian Coomer took action during this year’s legislative session to see that local concerns were heeded when House Bill 318 was being discussed to alter the tourism development act.
HB 318 provides for sales tax incentives on tourism projects costing more than $1 million, not directly competing with existing Georgia businesses and deriving at least 25 percent of its visitors from outside the state within three years of operation.
“This was an absolute must for LakePoint — this had to happen,” Battles said. “This made LakePoint a reality, I think it would have worked out, but this makes it a much more appealing project when investors are able to get some of their capital investment back.
“This is what we’ve been waiting on. This is the reason why LakePoint has been somewhat dragging, is waiting on this legislation.”
The changes local legislators made sure to include would not only provide incentives for tourism projects, but also ensured that local governments would be protected from unintended consequences. The original tourism development act would have qualifying projects paying reduced taxes at both the state and local level. HB 318 allows for state-sales-tax breaks on approved projects for up to 10 years, while not affecting local revenue, which may be needed to cover the cost of infrastructure and public services in the wake of a new development.
“House Bill 318, which was the rewrite of the tourism bill, was driven in no small part by Bartow County concerns,” Coomer said. “What the bill would allow is a change in how local governments treat the tax revenue from those developments. In the previous version of the bill ... the county or the city was also subject to basically giving up a chunk of their tax revenue when a qualifying project comes in. But under the changes to the bill, the local government revenue piece is separate from the state revenue piece and so the local governments are essentially unaffected by a state decision to give these tax credits as an incentive.
“The local government would still have the authority to grant incentive, but it would not be an automatic grant by virtue of the state’s decision to grant that incentive. So cities and counties, in particular Bartow County, that [are] essentially looking at a potentially very large tourism development being undertaken would have had to worry about losing tax revenue from the project at a time when they really have to buy more equipment and hire more people to provide services for that venue.”
While both local lawmakers celebrated Monday’s signing, there was a piece of legislation added to the bill that caused Coomer concern. The inclusion of an article creating the Invest Georgia Fund made its way into the law. The fund would allow for state money to be used in seed funding startup enterprises. Funding for the Invest Georgia Fund would come from the state at a rate of $10 million in the fund’s first year, increasing to $15 million in each of the funds second and third years, reaching $25 million in its fourth year and $35 million in the fund’s fifth year.
This provision, however, is one Coomer expects to face a fight for funds in coming years. A cash-strapped budget in a state constitutionally required to balance its budget will likely find it challenging to support such a seed fund. Allowing this article to make it into the bill’s final version is what Coomer describes as a “may” provision, rather than a “shall” provision; therefore, without funding, the Invest Georgia Fund may never take off.
“One of the things that did get added that was somewhat controversial is a provision to allow for a state investments fund to invest tax dollars into startup companies,” Coomer said. “I think the only reason it was able to stay in, and I think the only reason the governor was willing to sign the bill, is because it was kind of a ‘may’ provision rather than a ‘shall’ provision. While the language is now in the books and in the law, it doesn’t necessarily have any affect because you have to implement this program through revenue allotments.
“That’ll be a fight we have in appropriations in future years. ... But I think most people in the Legislature are uncomfortable enough with that concept that we’re not going to see it funded anytime soon.”
Despite the concession, local lawmakers count the bill a win for Bartow County as LakePoint begins construction on the realignment of Ga. Highway 293 and the park’s first tennant, Terminus Wake Park.
For Coomer, HB 318 and the changes to the Georgia Tourism Development Act protecting local governments are a reminder of why he entered office.
“It’s one of those rewarding opportunities where you get to see a particular need presented and then have the joy of being effective and getting something done for the community that needed to be done,” Coomer said. “I think this really demonstrates the reason we have local representation in the legislature as opposed to have some folks across the state to make laws for us. We actually have local representation so we can carry forward a local agenda and local concerns.”