Legislative Update

PHOTO ABOVE Georgia State Capitol Building I n a year as rife with political and legislative activity as 2020, it’s difficult to know how and where to begin to present the association’s legislative update. From the COVID-19 pandemic to water issues, new labor regulations, and transportation updates, to the election of new agricultural legislative leaders, many changes, many improvements, and many new opportunities on the political front await the green industry in 2021.

COVID-19 RESPONSE: SAVING THE INDUSTRY

At the onset of the COVID-19 outbreak, there was (and still is) much talk in D.C. of closing nonessential businesses. Such closures threatened to permanently shutter numerous businesses across the country, from mom-and-pop small businesses to large corporations, and our state’s green industry businesses were no exception. Fortunately, early into this process, GGIA stepped in on behalf of the green industry as a whole and worked diligently with Commissioner Black and other officials at the state and local levels to ensure that all industry businesses receive an “essential” designation, thereby exempting them from the initial shutdowns as well as potential future shutdowns which allow essential businesses to remain open.

Though GGIA and other industry supporters were able to protect green industry businesses from statewide shutdowns and shelter-in-place orders for the foreseeable future, some businesses had already suffered severe financial loss due to the pandemic. In response, GGIA partnered with its national sister organizations to ask Deputy Administrator William Beam of USDA to consider Coronavirus Food Assistance Program (CFAP) direct payment eligibility be extended to our nursery and floriculture producers in an equitable manner. The letter sent to Beam describes the differences between green industry crops and other specialty crops, the need for equitable relief, and some suggestions as to how that could be accomplished. The USDA announced on July 9, 2020 that it would make more than 40 additional specialty crops eligible for CFAP, including crops that had suffered a five percent or greater price decline between midJanuary and mid-April as a result of the COVID-19 pandemic, had produce shipped but subsequently spoiled due to loss of marketing channel, and had shipments that did not leave the farm or mature crops that remained unharvested. Additional eligible specialty crops were announced in August. In September, President Donald J. Trump and U.S. Secretary of Agriculture Sonny Perdue announced up to an additional $14 billion for agricultural producers who continue to face market disruptions and associated costs because of COVID-19. Many horticultural crops were included in this relief package (named CFAP 2). Eligible crops included cut flowers, cut greenery, container grown annuals and perennials, nursery crops grown in a container or controlled environment for commercial sale, cactus, and Christmas trees. In addition to CFAP relief funds, GGIA advocated that the green industry be included in the Paycheck Protection Program (PPP), which passed the house and senate earlier this year. One of the most significant benefits included in the bill for the green industry is the tax-deductibility of forgiven PPP loans. This supersedes IRS guidance that such expenses could not be deducted and brings the policy in line with the AGC of America letter that GGIA and hundreds of state and national organizations signed on in support of the intent of Congress in the CARES Act. The COVID-19 relief bill clarifies that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided” by Section 1106 of the CARES Act (which has been redesignated as Section 7A of the Small Business Act). This provision applies to loans under both the original PPP and subsequent PPP loans. GGIA will still continue to monitor the situation in D.C. closely as our newly elected officials work together to make decisions regarding the pandemic.

LABOR UPDATES

In addition to financial aid for struggling green industry businesses, the COVID-19 relief bill brought with it changes in the H-2B visa program which stand to benefit the industry. According to AmericanHort’s Senior Vice President Craig Regelbrugge, the bill “[p]rovides authority for the Department of Homeland Security, in consultation with the Department of Labor (DOL), to increase the H-2B cap for Fiscal 2021 by up to approximately 69,000 visas if it determines that the needs of seasonal businesses cannot be met with U.S. workers; [e]nables the use of private wage surveys; [p]rohibits DOL from enforcing the corresponding employment and guarantees provisions of its H-2B regulations promulgated during the Obama administration; [p]rovides for a maximum season of up to 10 months, as opposed to 9 months in current DOL regulations; [and provides] for staggered crossing for seafood workers.” However positive these changes may be for the industry, on December 31, 2020, the Trump administration extended an executive order suspending guest worker programs (including H-2B) until March 31, 2021. Regelbrugge writes, “The March 31st deadline will not impact second half April 1st filers, as we learned during the last six months that processing of H-2B visas was not impacted. Under guidance provided by the Trump Administration concerning National Interest Exemptions, we remain confident that if your date of need is between now and March 31st that you will qualify under one of the three exemptions: returning worker, DOL-approved certification after July 2020, [or if such action] will cause financial hardship to the U.S. employer. “[AmericanHort] ha[s] been in contact with offices on Capitol Hill hat have informed us that Biden plans to rescind the order on January 20th.” If this occurs, AmericanHort and GGIA will send a timely press release to our members and contacts. In addition to the changes imposed on the H2-B visa program, the H2-A visa program has also seen numerous changes and challenges in the last year. In November 2020, a day after the Department of Labor issued a new H2-A wage rule, a federal judge in California issued a preliminary injunction which blocked the rule. Regarding this issue, Regelbrugge writes, “That rule, which included a two-year freeze on the so-called Adverse Effect Wage Rate (AEWR), was scheduled to take effect on December 21. [. . .] The likely outcome will be publication of new 2021 AEWRs, but that publication will be delayed until USDA has been able to collect and tabulate its Farm Labor Survey data for the final quarters of FY2020, which ended in September.” However, there is something positive to come out of last year’s legislative changes surrounding the H-2A visa program: the Department of Homeland Security (DHS) published a temporary final rule

which, according to the document, “extends the amendments to certain regulations regarding temporary and seasonal agricultural workers, and their U.S. employers, within the H-2A nonimmigrant classification. Namely, the Department will continue to allow H-2A employees whose extension of stay H-2A petitions are supported by valid temporary labor certifications issued by the Department of Labor to begin work with a new employer immediately after the extension of stay petition is received by USCIS. [. . .] The temporary extension of these flexibilities will ensure that agricultural employers have access to the orderly and timely flow of legal foreign workers, thereby protecting the integrity of the nation’s food supply chain and decreasing possible reliance on unauthorized aliens, while at the same time encouraging agricultural employers’ use of the H-2A program, which protects the rights of U.S. and foreign workers.” This rule applies to those H-2A petitions received between August 19 and December 17, 2020.

WATER ISSUES

The seemingly never-ending, decades-long battle between Florida and Georgia regarding Georgia’s usage of the Apalachicola-Chattahoochee-Flint River Basin may be drawing near to a close as the SCOTUS prepares to hear the case for a second time in a hearing scheduled to begin on February 22, 2021. In December 2019, U.S. Circuit Judge Paul Kelly Jr., the special master appointed to hear the arguments from both sides of the suit, recommended that the SCOTUS rule in Georgia’s favor as he found no “clear and convincing evidence” that substantiates Florida’s claim that Georgia’s usage of basin has substantially damaged the Apalachicola Bay and its oyster industry. In his 81-page ruling, Kelly writes, “The evidence has shown that Georgia’s water use is reasonable, and the evidence has not shown that the benefits of apportionment would substantially outweigh the potential harms.” According to Tamar Hallerman of the Atlanta Journal Constitution, “The ApalachicolaChattahoochee-Flint river basin originates near Lake Lanier, cuts southwest and flows along the Alabama border into the Panhandle. It serves as the main source of drinking water to more than 4 million people, including roughly 70% of metro Atlanta, and irrigates farmland in southwest Georgia [. . .]” “The case’s first expert judge, who died in 2019, implored Georgia, Florida and Alabama for years to strike an accord to prevent an expensive and potentially unfavorable court decision. The states’ governors met several times but failed to reach such an agreement. So far, Georgia has spent roughly $50 million in taxpayer money defending itself.” GGIA will follow this case closely as it unfolds and will keep our members and contacts informed.

TRANSPORTATION UPDATE

The Federal Motor Carrier Safety Administration (FMCSA) finally issued their ruling on the definition of the terms “any agricultural commodity,”

CHATTAHOOCHEE RIVER

“livestock,” and “non-processed food,” as the terms are used in the definition of “agricultural commodity” for the purposes of the Agency’s “Hours of Service (HOS) of Drivers” regulations. The FMCSA has formally recognized horticulture to belong under the umbrella of agricultural services. The interim final rule states that “the Agency considers plants, including sod, flowers, ornamentals, seedlings, shrubs, live trees, and Christmas trees, within the scope of the definition,” and therefore growers will be able to use the agriculture exception under the HOS regulations.

2020 LEGISLATION SESSION SUMMARY

The GGIA Legislative Committee worked with legislators on many bills that impact our green industry throughout the 2020 Legislative Session, and we have followed the progress of these bills as they have moved forward. We have summarized them here for you.

HB 105 State Income Tax Exemption for Disaster Payments from Hurricane Michael – The bill exempts the USDA Hurricane Michael disaster relief income paid to farmers from state income tax. This bill was signed into law on August 5, 2020, effective immediately.

HB 779 (Alternative Ad Valorem Tax, redistribution of proceeds from motor vehicles) – The bill would modify the distribution of proceeds for ad valorem taxes on motor vehicles to counties, municipalities and school districts. This bill was signed into law on June 29, 2020, effective immediately.

HB 793 (Budget) – The budget vote came down to the wire on Day 40 with the House adopting the conference committee report. By law, the General Assembly is required each year to pass a budget. There are over $2 billion in reductions spread across all sectors. The Department of Agriculture and UGA Extension certainly took a fair share of hits. Many vacant seats lost funding. The Georgia Department of Agriculture did get funding to get the hemp program off the ground, but not as much as was initially designated in the House budget. UGA Extension will experience cuts to travel and general operations. On a positive note, the budget avoided furloughs for state employees. This bill was signed into law on June 30, 2020, effective immediately. HB 847 (Hemp) – This bill cleans up much of the hemp legislation passed last year under HB 213. Of particular interest to the green industry was the addition of a license that allows for grower-togrower sales. Under HB 213, each licensee had to have an agreement with a processor. This limited the ability of small plant producers to grow and sell to permitted hemp farmers. The bill also makes adjustments so that our law complies with federal regulations, establishes a pre-harvest sampling test requirement, allows for university and college research, addresses transportation requirements, and adjusts the processor permit fees. Under HB 847, the processor permit has an initial cost of $25K and an automatic renewal rate of $50K. This bill was signed into law on July 22, 2020, effective immediately.

HB 894 (Seed Commission Staggered Terms) - HB 894 allows for staggered terms of commission members similar to other boards and commissions. This bill was signed into law on July 29, 2020, effective January 1, 2021.

HB 1057 (Soil Amendments from Industrial ByProducts) - HB 1057 gave us quite a scare during this session. The bill seeks to regulate industrial by-products by local governments, and prohibit domestic septage from being part of fertilizers, agricultural liming, or soil amendments. While 1057 was not targeting the green industry, we use many industrial by-products in our soilless media. The GGIA Legislative Committee worked to get some exemptions included in the bill prior to it passing out of the House Ag and Consumer Affairs Committee. This bill was passed through the Senate with exclusions in place and was signed into law on July 29, 2020, effective January 1, 2021. Following are the proposed bills that have stalled or died somewhere along the way. HB 286 (Right to Repair) This bill was introduced in the 2019 session, assigned to the House Agriculture and Consumer Affairs Committee, and did not get picked up during the 2020 session.

HB 545 (Right to Farm) – The bill sought to strengthen Georgia’s Right to Farm law to better protect farms in areas zoned agricultural from nuisance lawsuits from neighbors. The version passed by the Senate did make it more difficult but removed some of the vital language in the bill, and allowed the bill to move forward. Unfortunately, the House did not vote on the Senate-passed version.

HB 690 (Exemption of Permitting for Ag. Structures) – The bill passed the House by Substitute, but and made it to Assignments in the Senate. It was never picked up by a committee.

HB 930 (Georgia Agribusiness and Rural Jobs Act) - Georgia Agribusiness and Rural Jobs Act- Changes the definition of ‘rural,’ provides additional capital investments to these areas, and repeals conflicting laws concerning rural Georgia. It was assigned to the House Ways and Means Committee and has stalled there.

HB 1035 (Tax Exemption and Credit Reform) – HB 1035 targeted filling the gap for the state budget shortfall. It would have eliminated some longstanding tax exemptions across many industries had it been approved. One such measure would have affected our sod producers and their ability to sell competitively in the southeast. This one did not make it through, and the exemption stands. There were a couple of Senate Bills that we had reported on earlier in the session that never made it past crossover day. Those are SB 351 and SB 415.