Changes Made to Taxes, Open Government Laws

Tom Crawford

May 9, 2012

The General Assembly passed legislation this year that will affect the way municipalities govern themselves and made significant changes in two of their major sources of tax revenue.

HB 397 clarifies the state’s open records and open meetings laws first enacted in the early 1970s.

The bill provides that, while executive sessions are still permitted in some circumstances, all votes by a city council must be taken in public.

There are heftier fines for cities that do not turn over official records when requested by the public and the new law reduces from 25 cents to 10 cents per page the fee for providing copies of public documents.

The law includes an exemption that allows the state Department of Economic Development to keep secret public records related to efforts to lure a major new business or industry to the state. That exemption does not apply to cities or local development authorities, however.

HB 386 makes profound changes in vehicle tag taxes and eliminates the sales tax on energy used by businesses in manufacturing.

The measure replaces the 7 percent sales tax on dealer sales of autos and the yearly ad valorem tax paid for the renewal of a license tag, replacing both levies with a one-time title fee of 7 percent.

The revenue from this title fee will be divided between state and local governments. Safeguards were included so that the state will guarantee local governments a collective revenue of at least $1 billion annually with a 2 percent yearly increase.

The sales tax on energy will be phased out over a four-year period, but cities are authorized to replace their portion of that tax with an “excise tax.”

Such local leaders as Dalton Mayor David Pennington have hailed the tax elimination as a lure for attracting more industry to their areas, but there are also concerns that cities could take a heavy hit on annual revenues with the tax phaseout.

Rep. Jay Powell, a former mayor of Camilla, tried to pass legislation (HB 811) that would end the practice of taking fees paid for such purposes as tire disposals and hazardous waste site cleanups and diverting the funds to the general treasury. Powell’s bill passed the House but was thwarted in the Senate; he says he will introduce it again next year.

SB 284 will allow cities to establish land banks that can acquire and dispose of “dilapidated, abandoned and tax delinquent” properties so that they can be put to more productive use.

Cities hit by increasing incidences of metal theft may get some help from the passage of HB 872, which is intended to crack down on those who steal copper or other metal and sell it for quick cash from scrap metal dealers.

HB 872 provides that scrap metal will be paid for through check or electronic transfer of funds rather than cash. Air conditioner coils can only be legally purchased from people who are legitimate heating and air conditioning workers.