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February 22, 2019

General Assembly at Halfway Point

Today marked the 20th legislative day for the 2019 session of the Georgia General Assembly’s 40-day session. As is typical for each session, most of the work so far has been in committees where members perfect their legislation before it is moved forward for possible floor votes. The General Assembly will be in session Monday through Friday next week.
Morris and Williamson

Banking Department Housekeeping Bill Reported

House Banks and Banking Committee Chairman Greg Morris (R-Vidalia) held a second committee meeting on HB 185, the Banking Department’s annual housekeeping bill sponsored by Rep. Bruce Williamson (R-Monroe). Of interest to bankers, the bill includes provisions to eliminate barriers to forming de novo banks, eliminate appropriated retained earnings references since they no longer affect legal lending limits, and authorize background checks for trust company directors and officers. The bill also contains provisions affecting other entities the Department regulates. The committee reported the bill for further consideration by the House Rules Committee. GBA supports the legislation as reported.

Senate Banking Committee Considers Guaranty Bill

The Senate Banking and Financial Institutions Committee held a second hearing on SB 37 by committee chair William Ligon (R-Brunswick) this week. Our thanks to GBA’s counsel, Bill Custer of Bryan Cave Leighton Paisner, who drafted some revisions to the bill from input at the first hearing and he testified again on our behalf. The legislation is intended to restore the proper method of releasing or rescinding a written guaranty. As background, a 2018 Georgia Court of Appeals case, Crop Production Services, Inc. v T. E. Moye, reversed two cases going back nearly three decades which held that the Statute of Frauds barred oral evidence that a written guaranty had been released or rescinded. In Moye, the court held that a written guaranty may be rescinded by a mutual oral agreement, even though the guaranty itself is subject to the Statue of Frauds and contains a provision requiring that notice of revocation must be in writing. Opposition to the revised bill was led by Sen. Jesse Stone (R-Waynesboro) and he invited Mr. T.E. Moye to appear to share his story with the committee. It was obvious that had he gotten his oral rescission in writing, he would not have been liable for the debt in question. Sen. Stone also invited a debtor’s attorney from Macon, Ward Stone, to testify. Mr. Stone opposed the bill essentially saying he felt the ambiguity of the ability for oral cancelations favored debtors. No vote was taken on the bill and we expect further action at next Tuesday’s meeting.
Gaines and Petrea

Elder Abuse and Neglect Reporting Bill Introduced

We are greatly concerned about HB 402 that was introduced this week by Rep. Houston Gaines (R-Athens). The bill expands the current statute requiring bankers to report suspected cases of elderly financial exploitation to also report instances of suspected elder abuse and neglect. We have already told the author we are against expanding the reporting to include abuse and neglect as those are broadly defined terms in the Georgia code and fall outside of anything our client-facing bankers would be in a position to observe and report with any confidence. We already know that even deciding what constitutes reportable exploitation is a subjective call, which means bankers err on the over-inclusive side and report borderline calls. We worry that adding these two categories to what banks have to report will cause an increase in unwarranted reports and related client complaints. The bill could also open bankers to private causes of action for failing to notice and report cases of abuse or neglect, which our client-facing bankers are simply not trained to identify or deal with. In our view, the exploitation category captures everything that bankers are in a position to reasonably suspect. The bill has been assigned to the House Committee on Human Relations and Aging chaired by Rep. Jesse Petrea (R-Savannah). If you agree with our position against expanding banker’s reporting responsibilities, please let your own representative know of your concerns. It would be especially helpful to communicate with your representative if he or she serves on this committee.

Shared Deposit Bill Introduced

Legislation was introduced this week, SB 157 by Sen. John Kennedy (R-Macon), to give banks the option through shared deposit programs to offer unlimited FDIC insurance to public depositors as a way to avoid tying up securities or putting up a Letter of Credit to collateralize the deposits. GBA associate members StoneCastle Partners and Promontory Interfinancial Network are the two companies most active in Georgia selling this service to our members. Representatives from city, county and state governments have agreed to the concept. The State Depository Board will establish policies and procedures related to the approval of third-party service providers and the ongoing monitoring of participation in deposit placement programs. That rulemaking is due by the end of this year assuming the bill passes as expected. The State Treasurer serves as the administrative officer for that Board. GBA supports the legislation as one of our priority bills for the session. The bill has been assigned to the Senate Banking and Financial Institutions Committee where a hearing and vote could be held as early as next week.

Bank Tax Credit to be Studied

Sen. John Albers (R-Alpharetta) introduced SB 120 that is designed to study each of Georgia’s tax credits. The legislation calls for the state auditor to develop an economic analysis on each tax credit over a series of years. The auditor’s reports will be provided to the House Ways and Means Committee and the Senate Finance Committee. The Bank Tax Credit is found in Code Section 48-7-29.13 and that report is scheduled for no later than Dec. 1, 2021. GBA’s Tax Advisory Committee chaired by Mark Robinson, Synovus Bank, has prepared a white paper outlining the background of the credit and why the credit should be retained. A hearing was held and the bill was reported by the Senate Finance Committee. Should the bill pass, we will provide our white paper to the state auditor for his information.

Committee and Floor Action

A number of bills we’re monitoring received consideration in committee or were subject to floor votes this week. Among those of most interest to banking are:
  • SAFETY 21 Loan Program. HB 30 by Speaker David Ralston (R-Blue Ridge) is the Fiscal Year 2019 Supplemental Appropriations Bill that contains an additional $10 million for the low interest loan program created to assist farmers and others suffering losses from Hurricane Michael. The bill has passed the Legislature and the money will be made available shortly after the Governor signs the bill. GBA supports.
  • Income Tax - Hurricane Michael Relief. The House Ways and Means Committee held a hearing on and reported HB 105 by Rep. Sam Watson (R-Moultrie). The bill would exempt from state income taxes federal disaster relief payments to victims of Hurricane Michael. GBA Supports.
  • Prized Linked Savings Accounts. The House Banks and Banking Committee reported HB 193 by Rep. Emory Dunahoo (R-Gainesville) that authorizes banks and credit unions to offer a deposit account with a raffle component to encourage savings. We understand the bill will be amended to clarify that participants will not be charged a fee to be eligible for the raffle component. GBA supports.
  • Rural Development – Broadband. The Senate unanimously passed SB 17 by Sen. Steve Gooch (R-Dahlonega). The bill would allow telephone cooperatives and their affiliates to provide broadband services. GBA supports.
  • Business Court. Hearings were held by the House Judiciary Committee on HB 239 by Rep. Chuck Efstration (R-Dacula) and by the Senate Judiciary Committee on SB 110 by Sen. Jesse Stone (R-Waynesboro). These are similar bills implementing the statewide Business Court authorized by a statewide constitutional amendment passed in 2018. No further action was taken on either bill. GBA supports.
  • Rural Development Council. The House Economic Development Committee held a hearing on and reported HR 214 by Rep. Sam Watson (R-Moultrie). The bill reauthorizes the Rural Development Council for an additional two years. Recommendations from the Council’s first two years of work are being enacted into law. These next two years will all the legislators to continue looking for ways to support economic development and jobs for rural Georgia. GBA testified before the Council and supports this ongoing effort.
  • Rural Development – Freight and Logistics. The House Transportation Committee reported HR 37 by Rep. Kevin Tanner (R-Dawsonville). The resolution creates the Georgia Commission on Freight and Logistics to make recommendations for a comprehensive strategic business plan to develop state-wide freight and logistics infrastructure with the intent of ensuring the state remains economically competitive. GBA supports.
  • Guardianship.The House Juvenile Justice Committee held a hearing on and reported HB 70 by Rep. Chuck Efstration (R-Dacula). The bill revises a number of areas within the code affecting guardianship of minors and adults. The changes mostly relate to appointment issues and court administration rather than bank operations. GBA is monitoring.
  • Hemp Farming. The House Agriculture and Consumer Affairs Committee reported HB 213 by Rep. John Corbett (R-Lake Park). The bill establishes the framework for research, development, growing, licensing and regulating hemp production in Georgia. GBA is monitoring.
  • Appraisal Management Companies. The House passed HB 192 by Rep. Alan Powell (R-Hartwell). The bill is a substantial revision to the code relating to the operation of Appraisal Management Companies. The bill is pending in the Senate Regulated Industries and Utilities Committee. GBA is monitoring.
  • Nationwide Multistate Licensing System and Registry. The House Banks and Banking Committee held a hearing but took no further action on HB 212 by Rep. Clay Pirkle (R-Ashburn). The bill exempts certain retailers of mobile homes and employees of residential contractors from registration under the Georgia Residential Mortgage Act. GBA is monitoring.
  • Information Technology Employee – Covenants. The House Judiciary held a hearing on HB 81 by Rep. Todd Jones (R-Cumming) and decided to hold the bill for now. The bill would prohibit restrictive covenants from being included in information technology employee contract agreements. GBA is monitoring.
  • 529 Savings Trust Accounts. HB 266 by Rep. Marcus Wiedower (R-Watkinsville) doubles the state income tax deduction for contributions to Georgia’s 529 educational savings trust accounts. The bill was assigned to the House Ways and Means Committee where a hearing was held, but no further action was taken. GBA is monitoring.
  • Low THC Oil. HB 324 by Rep. Micah Gravly (R-Douglasville) provides for the production, manufacturing, and dispensing of low THC oil. The bill has been assigned to the House Regulated Industries Committee where a subcommittee has held a hearing but taken no further action. GBA is monitoring.

Bills We’ve Added to our Tracking List This Week

We add bills daily that we’ll be tracking to the State Issues page on our website and include all the new bills in each week’s Legislative Update. Here’s a list of the bills we added this week:
  • Fraudulent Transfers. HB 396 by Rep. Dale Washburn (R-Macon) provides that it shall be unlawful for a person with intent to hinder, delay, impair, or defraud a creditor's rights to deed or otherwise transfer title to real property to another person without the knowledge or consent of such other person. The bill has been assigned to the House Judiciary Committee. GBA is monitoring
  • Peer-to-peer Vehicle Sharing. HB 337 by Rep. Shaw Blackmon (R-Bonaire) establishes a regulatory structure for peer-to-peer vehicle sharing services. The bill has been assigned to the Public Safety and Homeland Security Committee. GBA is monitoring.
  • Property Tax Bills. HB 411 by Rep. Brett Harrell (R-Snellville) would preclude tax commissioners from including on property tax bills nontax related fees or assessments, including, but not limited to, storm-water service fees or solid waste service fees. The bill has been assigned to the House Ways and Means Committee. GBA is monitoring.

GBA’s Advocacy Team at the Capitol

Led by GBA’s Senior Vice President, Government Relations, Elizabeth Chandler, GBA will be 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..