February 24, 2017 

General Assembly Readying for Crossover Day

The pace in the General Assembly quickened this week as committees were reporting dozens of bills in order for them to have a chance of being considered in either Chamber before Crossover Day which is next Friday. Crossover Day is always long and the theory is that legislation must pass the body where the bill was introduced in order to be considered by the other body this session. GBA’s advocacy team was busy this week testifying and monitoring legislation before committees, suggesting amendments to legislation affecting banking and helping host the annual dinner honoring the hard-working House Ways and Means Committee. The Legislature completed Day 24 of the 40-day session. Legislators will return next week and be in session Monday through Wednesday and then back in on Friday.
New Page 7
Kelley Beskin

GBA Testifies on Director and Officer Liability Bill

Although the General Assembly was not in formal session on President’s Day, several committees held hearings on legislation. A subcommittee of the House Judiciary Committee chaired by Rep. Trey Kelley (R-Cedartown) met for the second time on HB192 by Rep. Beth Beskin (R-Atlanta), the bill GBA supports that is intended to afford greater protection to bank directors and officers as they conduct their routine affairs. The bill was introduced in response to the Supreme Court’s ruling on the FDIC v. Loudermilk case and a subsequent jury trial in federal court. The court ruled that while Georgia’s Business Judgment Rule protects decisions, directors and officers will be judged under an ordinary negligence standard in the process leading up to the decision. And that’s what the jury decided in a well-reported case brought by FDIC against certain directors and officers of the former Buckhead Community Bank. The bill as introduced would raise the standard of care from an ordinary standard to a gross negligence standard for the decision-making process. In his testimony, GBA President and CEO Joe Brannen said in part, “Until the Loudermilk decision, bank officers and directors thought they were protected with a gross negligence standard and the Supreme Court’s bifurcated ruling separating the process from the decision itself is the first time anyone ever thought of those two as separate issues. Not addressing this will likely have three results for banks: 1) the federal government, through the FDIC, remains incented to sue Georgians because the standard of care is unlike most other states that are viewed as favorable in which to do business, 2) board retention and recruitment will be harmed because personal assets will be at stake for corporate decision making, and 3) there will be a chilling effect on chartering activity for new community banks.” Others testifying for the bill were the two attorneys who drafted much of it, Tom Richey with Bryan Cave and John Lathem with Alston & Bird. Other associations testifying in support were the Community Bankers Association of Georgia, the Georgia Credit Union Affiliates, the National Federation of Independent Businesses and Georgians for Lawsuit Reform. Testifying against the bill was the Georgia Trial Lawyers Association. After more than six hours of testimony, the subcommittee decided to adjourn to study what they heard and decide their next step.

Other Committees Met to Consider Legislation of Interest to Banking

With 38 committees in the House and 28 in the Senate, monitoring all the goings on at the committee level is a monumental task primarily because almost all in some way consider legislation that could affect the banking industry. This week, several bills we’ve been monitoring were the subject of hearings; and in most cases, the bills were reported to the respective Rules Committees in each body that decides whether a bill goes to the floor for consideration. Here’s a list of a few bills we’re monitoring that received committee attention this week:
Garnishment. The Senate Judiciary Committee has reported SB 194 by Sen. Jesse Stone (R-Waynesboro), legislation designed to further refine Georgia’s garnishment statute that was substantially revised last session. Our thanks to Adam Cleveland from GBA associate member law firm Thompson, O’Brien, Kemp & Nasuti, P.C., for his work with an ongoing task force that made the recommendations contained in the bill and testified in support of it. GBA supports the bill.
Tax Lien Registry. The House Ways and Means Committee reported HB 337 by Rep. Bruce Williamson (R-Monroe). The bill creates a new statewide tax lien registry and was requested by the Georgia Department of Revenue. GBA is monitoring the bill.
Boat Titling. The House Ways and Means Committee reported HB 357 by Rep. Ron Stephens (R-Savannah) that would create a titling process for boats and other watercraft. The Department of Natural Resources is tasked with the titling process. GBA supports the bill.
Power of Attorney. The House Judiciary Committee reported HB 221 by Rep. Chuck Efstration (R-Dacula) that is essentially a rewrite of the current power of attorney statute. Our thanks to Rep. Efstration for making a number of changes we recommended in the legislation. We expect the bill to continue to be perfected when it’s considered by the Senate.
Industrial Loan Act – Contracts. The Senate Banking Committee held a hearing but took no further action on SB 198 by Sen. Elena Parent (D-Atlanta), a bill that prohibits Georgia Industrial Loan Act licensees from using instruments like checks to create contracts under certain circumstances. GBA is monitoring the bill.
Installment Loan Pawn Transactions. A subcommittee of the House Regulated Industries amended and reported HB 353 by Rep. Brett Harrell (R-Snellville), a bill that creates a new opportunity for pawn transactions to be handled as installment loans. GBA is monitoring the bill.
State Income Tax. The House Ways and Means Committee reported HB 329 by Rep. Jay Powell (R-Camilla) that would reduce the state income tax rate to 5.5 percent. GBA is monitoring the bill.

Floor Votes Send Two Bills to Other Chamber

Two bills GBA is monitoring received floor action this week:
Bankruptcy Exemptions – HSAs, MSAs. The Senate passed SB 71 by Sen. Jesse Stone (R-Waynesboro), a bill that will add Health Savings Accounts and Medical Savings Accounts to the list of property that is exempt from bankruptcy. The bill is pending in the House Judiciary Committee.
Agriculture Equipment – Ad Valorem Tax. The House passed HB 290 by Rep. Sam Watson (R-Moultrie) that would exempt from ad valorem taxes certain agriculture equipment that is under a lease purchase contract.

New Bills Added to our Tracking List This Week

We add bills almost daily to our tracking list that can be found on the State Issues Page of our website. Bookmark that page if you're interested in following all the goings on at the State Capitol. Here are the bills we added this week:
Self-settled Trusts. HB 441 by Rep. Barry Fleming (R-Harlem) creates a new trust instrument in Georgia that allows the creator of the trust to also be the beneficiary of the trust. GBA is monitoring the bill with concern.
Banking Empowerment Zone. SB 213 by Sen. Josh McKoon (R-Columbus) would incent financial institutions to operate in underserved areas designated as Banking Empowerment Zones by allowing the local governmental entity to place deposits with such financial institution as long as the rate of interest in at least equal to the institution’s posted two year rate paid on certificates of deposit. GBA is monitoring the bill.
Funeral and Cemetery Services. HR 339 by Rep. Rick Williams (R-Milledgeville) would create a House committee to review the current code provisions relating to funeral, cemetery, and related services and issue a report of their findings and recommendations. GBA is monitoring.
Electronic Lien and Title – Commercial Vehicles. HB 412 by Rep. Timothy Barr (R-Lawrenceville) would expand the current electronic lien and title program to certain commercial motor vehicles. GBA monitoring.

GBA’s Advocacy Team at the Capitol

Led by GBA’s Senior Vice President, Government Relations, Elizabeth Chandler, GBA was at the Capitol every day advocating on behalf of our members. Also at the Capitol are GBA’s government relations consultant Steve Bridges and GBA President and CEO Joe Brannen. With questions about GBA legislation, other issues of interest, or anything related to the legislative process, contact Elizabeth at 404.420.2027, Steve at 404.420.2037, or Joe at 404.420.2026.