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March 15, 2019

Eight Days Remaining in Legislative Session

The Georgia General Assembly was in session Monday through Thursday this week completing day 32 of their 40-day session. The legislature is slated to complete their work for the first year of their biennial on April 2. House and Senate committees were busy considering bills passed by the other body as it’s theoretically too late for a bill to be passed in the body of origin if introduced now. Hearings were held on two of GBA’s three priority bills and a committee hearing will be held next week on a bill that’s concerning many of our members related to PACE lending. Next week the General Assembly will be in session Monday, Thursday and Friday with committee workdays occurring on Tuesday and Wednesday.

GBA Supporting Three Priority Bills This Session

We’re tracking dozens of bills affecting our members and there are three bills we’ve been supporting as priorities for the Session.
Williamson and Kennedy
  • Banking Department Housekeeping Bill. The Senate Banking and Financial Institutions Committee held a hearing and reported HB 185, the Banking Department’s annual housekeeping bill. The legislation is sponsored by Rep. Bruce Williamson (R-Monroe) who explained the bill to the committee. 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. Sen. John Kennedy (R-Macon) will be handling the bill in the Senate and a Senate floor vote is scheduled Monday.
Ligon and Rich
  • Statute of Frauds. A subcommittee of the House Judiciary Committee held a hearing and reported to the full committee SB 37 by Senate Banking and Financial Institutions chairman William Ligon (R-Brunswick). There is a possibility the full committee may add some clarifying language and we will know more next week. The legislation clarifies that an agreement to modify, alter, cancel, repeal, revoke, release, or rescind a promise, agreement, contract, or commitment that is subject to the statute of frauds shall itself be in writing and subject to the statute of frauds. The legislation addresses a Court of Appeals decision that allowed an oral rescission of a loan guaranty even though the document stated a rescission would be in writing. Rep. Bonnie Rich (R-Suwanee) will be handling the bill as the House sponsor.
  • Shared Deposits. Due to conflicts with the Senate schedule, a hearing planned by the House Banks and Banking Committee has been rescheduled for Monday to consider SB 157 by Sen. John Kennedy (R-Macon). The bill authorizes banks to offer multi-millions of FDIC insurance coverage to public depositors through an optional shared deposit program. The intent of the legislation is to give banks a way to avoid tying up securities collateralizing a public deposit. The State Depository Board will establish policies and procedures related to the approval of third-party service providers offering this product through banks. The Board will also establish procedures for 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.

Questions Arise About PACE Loans

In last week’s Legislative Update, we reported that the Senate amended at GBA’s recommendation SB 162 by Sen. Matt Brass (R-Newnan) related to financing broadband services. The amendment removed language added in committee prohibiting lenders from accelerating loans under certain circumstances. The bill was being presented as a way to bring broadband to areas of the state with less optimal internet connectivity. The bill also included language authorizing loans for hardening structures to help withstand weather events like hurricanes. However, since this type of loan is relatively new to Georgia, we felt our members needed to know more. PACE is the abbreviation for property assessed clean energy financing and the concept is being hawked as an alternative means of financing energy efficiency upgrades, disaster resiliency improvements, water conservation measures, or renewable energy installations of residential, commercial, and industrial property owners. Obviously these types of loans are readily available from traditional lenders. What’s unique about PACE loans is that they are authorized by a public entity (in this case a Downtown Development Authority or other Development Authority), the loan payments are made along with property tax payments, and the loan balance has the same super priority lien status that a tax lien would have should a foreclosure occur. These loans all run with the property and not the borrower, so if a property is sold, the PACE loan obligation remains. We also understand that because of the priority lien status, Fannie Mae and Freddie Mac have both announced they will not purchase a loan where the property collateralizing the loan has a PACE loan attached. Similarly, FHA has announced they will no longer insure mortgage loans with PACE loans attached. The implications of these announcements are quite profound creating problems when a property with a PACE loan attached is being sold. Obviously, the buyer may not be able to obtain financing for such transaction without the PACE loan being full paid off. One of the large PACE lenders doing business in some of the other states that authorize these type loans is Ygrene and they’ve hired a lobbying team at the Capitol to get the legislation passed. The bill has been assigned to the House Energy, Utilities and Telecommunications Committee chaired by Rep. Don Parsons (R-Marietta) and a hearing is scheduled next Tuesday. If you have concerns about the bill, please reach out to your legislator, especially if he or she is on this committee:
House Energy, Utilities and Telecommunications Committee Members

Committee and Floor Action on Other Legislation We’re Monitoring

A number of other bills we’re monitoring received consideration in committee this week. Among those of most interest to banking are:
  • Bank Tax Credit. A House Ways and Means Subcommittee held a hearing but took no further action on SB 120 Sen. John Albers (R-Alpharetta). The bill is designed to study each of Georgia’s tax credits including the bank tax credit. GBA’s Tax Advisory Committee has prepared a white paper explaining the need for the bank tax credit and we are monitoring.

  • Boat Titling. The Senate Finance Committee held a hearing and reported HB 314 by Rep. Ron Stephens (R-Savannah). The bill creates a process by which boats and other watercraft will be titled. GBA supports.

  • Business Court. The House held a hearing but took no further action on SB 110 by Sen. Jesse Stone (R-Waynesboro). GBA supports the overall concept and is monitoring this bill as well as HB 239 by Rep. Chuck Efstration (R-Dacula) that has passed the House and is pending in the Senate Judiciary Committee. The bills offer different approaches implementing the statewide Business Court authorized by a constitutional amendment that passed in 2018.

  • Prized Linked Savings Accounts. The Senate Banking and Financial Institutions Committee held a hearing and reported HB 193 by Rep. Emory Dunahoo (R-Gainesville). The bill authorizes banks and credit unions to offer a deposit account with a raffle component to encourage savings. Earlier this session, the House Banks and Banking Committee adopted an amendment clarifying that participants will not be charged a fee to be eligible for the raffle component. The bill is now eligible for consideration by the Senate Rules Committee. Sen. P.K. Martin, IV (R-Lawrenceville) has agreed to be the Senate sponsor. GBA supports.

  • Rural Development - Broadband. The House Energy, Utilities and Telecommunications Committee held a hearing and reported SB 2 by Sen. Steve Gooch (R-Dahlonega). The bill allows Electric Membership Corporations and their affiliates to provide broadband services. GBA supports.

  • Nationwide Multistate Licensing System and Registry. The Senate Banking and Financial Institutions Committee held a hearing and reported HB 212 by Rep. Clay Pirkle (R-Ashburn). The bill exempts certain retailers of mobile homes from registration under the state and national mortgage registration system. The bill is scheduled for a floor vote Monday. Sen. John Kennedy (R-Macon) has agreed to be the Senate sponsor. GBA is monitoring.

  • Title Insurance. The House Insurance Committee held a hearing on and reported SB 202 by Sen. William Ligon (R-Brunswick). The bill allows title insurance to be procured on a lender's security interest in personal property taken by the lender as collateral for a loan. GBA is monitoring.

  • Appraisal Management Companies. The Senate Regulated Industries Committee held a hearing on and reported 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. GBA is monitoring.

Bills on GBA’s Tracking List

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. There were no new bills added to our tracking list this week.

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..