By Joanne Zimolzak, Ann Murray, Dan Jarcho, and Cindy Gillespie
Federal Courts Issue Dueling Decisions Concerning Availability of ACA Tax Credits
On July 22, 2014, two federal courts of appeals issued highly anticipated decisions concerning the government’s authority to grant tax credits to individuals who purchase health insurance in accordance with the provisions of the Patient Protection and Affordable Care Act (the “ACA”). In an unprecedented twist, the decisions of the U.S. Court of Appeals for the District of Columbia Circuit and the U.S. Court of Appeals for the Fourth Circuit were issued on the same day, just hours apart, and reached the exact opposite conclusion to the same essential question: can the Internal Revenue Service (“IRS”) grant tax credits to individuals who purchase health insurance on both state-run insurance exchanges and federally-facilitated exchanges created and operated by the Department of Health and Human Services (“HHS”)? As both courts acknowledged in their decisions (and numerous stakeholders since have acknowledged), the resolution of this question has significant implications for the future of the ACA. For now, the IRS’s existing policy to distribute tax credits for eligible enrollees will continue at least in the near term as the parties review and pursue various legal options.
The Key Issue: What Is An “Exchange” Established By A State?
At issue in both cases, Halbig v. Burwell (D.C. Cir.) and King v. Burwell (4th Cir.), are certain interrelating provisions of the ACA that (i) provide for the establishment of “Exchanges” through which individuals can purchase competitively-priced health care coverage and (ii) provide a federal tax credit to millions of low- and middle-income Americans to offset the cost of insurance policies purchased on the Exchanges.
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MLA’s Gordon Giffin was quoted in the Bloomberg View article, “Democrats Make Their Stand in Georgia.”
Democrats tout the appeal of this fresh-faced young ticket — she is 47 and he is 38 –running against a 71-year old-incumbent and a 64-year-old businessman with some Mitt Romney-type business controversies in his background.
The generational appeal of the two Democrats, argues Gordon Giffin, the Nunn campaign chairman and veteran Georgia political strategist, is powerful: “Here one plus one equals three.”
Republicans counter that with the primaries now over, Georgia will revert to its conservative inclinations in the fall, predicting victories by Deal and Perdue. They note that while their Senate candidates attacked each other in a primary and runoff, Michelle Nunn has largely escaped criticism; that will change quickly.
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MLA’s Eric Tanenblatt was featured in The New York Times and The Atlanta Journal-Constitution regarding the results of Georgia’s primary runoff elections.
The New York Times article, “Georgia Republicans Choose David Perdue as Their Senate Candidate.”
“David Perdue is a strong nominee who I’m confident will be the next U.S. senator from Georgia,” said Eric Tanenblatt, Mitt Romney’s 2012 Georgia finance chairman, who has organized a Senate campaign fund to benefit the Republican nominee. “He will bring a unique perspective to Washington at a time when the American people are craving for leadership.”
The Atlanta Journal-Constitution article, “Perdue secures the GOP nod for Senate.”
Heavy runoff spending depleted the candidates’ coffers. But the Republican fundraising machine is already gearing up to support Perdue in the general election. Longtime GOP fundraiser Eric Tanenblatt plans an Aug. 20 event for national Republican organizations to back the nominee this fall.
Tanenblatt said both Kingston and Perdue had committed to attending before Tuesday’s outcome, and both sitting senators are behind the effort. Chambliss has kept a low profile throughout the primary process, but he praised Perdue as soon as the race was called Tuesday.
Proposed Amendments to Georgia Film Tax Credit
The Georgia Department of Revenue has given notice that it proposes to amend the Rules and Regulations of the Georgia Film Tax Credit. The rule is being amended to bring it into conformity with current Georgia law and to clarify certain provisions of the rule.
Highlights from the proposed rule include changes to:
- Information regarding the threshold determination for a production company or qualified interactive entertainment production company and its affiliates and the assignment of the credit by the production company or qualified interactive entertainment production company to its affiliates.
- Information regarding the Department of Economic Development’s certification process and the Department of Revenue’s certification of Qualified Interactive Entertainment Production Companies.
- Information and examples regarding the projects that qualify for the base investment and the production expenditures that qualify for the credit and includes the loan-out company withholding provisions.
- Specifications to the credit amount.
- Specifications to the credit amount limitation for a qualified interactive entertainment production company.
- The credit cap for the film tax credit for qualified interactive entertainment production companies and affiliates.
- The conditions and limitations for utilizing the credit.
- How a pass-through entity utilizes the credit.
- The procedures for selling or transferring the credit and provides examples.
The Department must receive all comments regarding the proposed Rule from interested parties no later than 10 a.m. on August 21, 2014 and will consider adoption at that time.
For additional information and guidance on these proposed amendments, please contact the professionals listed on the right side of this page.
MLA’s Economic Development Practice
MLA is renowned for emphasizing the intersection of business and government; nowhere is this more apparent than our economic development work. Our economic development team includes members from our Government Affairs, Real Estate and Finance, Environmental, Corporate, International Trade, and Regulatory practices. We are led by experienced professionals, including attorneys and top government experts and provide effective and efficient strategies for clients based on our approach of building alliances with multiple parties and facilitating positive relations between clients and governmental entities. Our strong relationships and proven experience result in successful corporate re-locations, new investments, and expansion of existing clients’ facilities.
Please click here for our previous Georgia Film Industry Update.
For more information, please contact Eric Tanenblatt, Steve Labovitz, Alex McGee, Chuck McMullen, and Blake Ashbee.
MLA’s Eric Tanenblatt was quoted in The New York Times article, “Georgia Republicans Ready to Pick Their Senate Candidate.”
“We’ve got two very good, very well-qualified candidates in this runoff, and I think whoever wins tomorrow will be a strong nominee against Michelle Nunn,” said Eric Tanenblatt, Mitt Romney’s 2012 Georgia finance chairman, who has organized a Senate campaign fund to benefit the Republican nominee. “In Jack Kingston, you have a 22-year veteran of Congress, who’s obviously knowledgeable and can hit the ground running. And with David Perdue, you have a successful businessman who has spent a good bit of time studying the issues, but he’s an outsider and would bring a fresh perspective to Washington.”
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By Cindy Gillespie
Health Insurance Exchanges: State of the States update is our weekly report on Health Insurance Exchange developments.
This week, CMS posted an RFP to hire the next contractor to oversee the new wave of developments for HealthCare.gov and the various backend components that power the Federally-facilitated Marketplace and State-based Marketplaces and the Vermont Health Connect reported a significant decline in the number of enrollees in the 90 day grace period.
By Cindy Gillespie
Weekly Health Care Wrap-Up is our weekly look at developments affecting health care at the federal and state levels.
This week, CMS sent a letter to the U.S. Territories exempting them from some of the ACA’s insurance requirements and the Office of Management and Budget released the Mid-Session Review which provides an update to the projected estimates in the President’s March budget for the period 2014-2024.
MLA’s Ron Kaufman was quoted in the Houston Chronicle article, “NJ Gov. Christie to be in Iowa and 2016 spotlight.”
“What helps him the most is the fact that he’s doing a good job as chairman of the RGA, keeping his nose to that,” said Ron Kaufman, a Republican national committeeman and adviser to 2012 presidential nominee Mitt Romney. “That’s what helps him later on.”
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State focuses on workforce development as industry continues to have major economic impact
Georgia lawmakers are continuing discussions to expand the state’s film and television tax credits at a time when most states are looking at eliminating or scaling back their industry tax credits. During this year’s legislative session, the General Assembly passed H.R. 1601, which created a House study committee to consider proposals to expand the state’s film tax credit to include portions of the industry not covered by the law enacted six years ago. Representative Ron Stephens (R-Savannah) will chair the committee. Among the proposals being considered include helping smaller companies that don’t meet the $500,000 minimum threshold to take credit of the investment. The committee may also consider proposals which would expand the incentive to include post-production work for out-of-state films.
Additionally, the Georgia Department of Economic Development recently held a meeting focused on the industry as part of Governor Deal’s High Demand Career Initiative (HDCI). Governor Deal announced the creation of the HDCI to bring together the heads of Economic Development, the University System of Georgia, the Technical College System of Georgia and key leaders in some of the state’s important private-sector industries. The HDCI meeting was held at Georgia State University and addressed workforce development issues to insure Georgians have the skill sets to be competitive to get the high paying jobs created by these industries in Georgia.
The industry’s direct economic impact in Georgia nearly doubled from $132.5 million in 2007 to $260.4 million in 2008, the year the General Assembly passed legislation offering tax credits of up to 30 percent to companies producing feature films, television series, or commercials in Georgia. During Fiscal Year 2013 (July 1, 2012 – June 30, 2013) – the number increased to $3.3 billion and at the close of Georgia’s fiscal year, officials anticipate that the economic impact of the industry will increase twenty times over from 2007. This number does not take into account the more than 90 new companies that have located in Georgia to support this industry and aren’t able to take advantage of the tax incentives. Most importantly, the film and television industry has provided tens of thousands of jobs to Georgians—not only in highly skilled, technical positions, but also as caterers, production assistants, painters, hair dressers, accountants, carpenters, drivers, and so on.
MLA’s Eric Tanenblatt was quoted in The Atlanta Journal-Constitution article, ”Despite Carter’s fundraising success, Deal still has resources to tap.”
“There are a lot of other entities out there to fund races, so you shouldn’t just look at the campaigns themselves,” said Eric Tanenblatt, who served as chief of staff to Gov. Sonny Perdue and helped raise $17 million to $18 million in Georgia for Mitt Romney’s 2012 presidential campaign. “You have to look at the entire picture; you can’t just take a snapshot of this (fundraising) quarter.”
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