State Legislative Issues - 2012
Below are brief
descriptions of key issues and state legislation for consideration
in the 2012
Georgia General Assembly session and links to more details. Bills are listed by category as follows.
New bills this session are indicated with an
(N), otherwise, they are carryover
bills from 2011.
We also archived the bills that passed
in the 2011 session.
Access the 2011 archive here.
Bills to Support, Amend or Oppose
Account
Access, Recall of Funds
SB 35 by Sen. Seabaugh. Prohibits the state from recalling
funds from taxpayers' accounts once they have been deposited without
express written consent of the account holder. GBA, along with the
State Treasurer, successfully offered amendments that were accepted
by the author. The bill was reported out of committee, but did not
pass the Senate.
Attorney Fees, Obligations to Pay
HB 64 by Rep.
Jacobs. Relates to the validity and enforcement of obligations to
pay attorney's fees upon notes or other evidence of indebtedness to
remove specific percentages based on amount of the indebtedness
(currently 15 percent of the first $500 of principal and interest
owing and 10 percent in excess of $500) and replaces that with a fee
that would be an amount found by the court to be reasonable and
necessary for asserting the rights of the aggrieved party. After
consulting with GBA, Rep. Jacobs amended the bill to raise the
attorney fee amount that would trigger a court review from $10,000
to $20,000.
Bankruptcy - Property Exemptions
SB 117 by Sen. Stone. Significantly increases the dollar
amount of personal property exempt from levy and sale of property
resulting from bankruptcy. Personal residence exemption would
increase from $10,000 to 50,000, or from $20,000 to $100,000 for a
property with two spouses on the title. Sen. Stone amended the bill
to closely mirror federal homestead exemptions, but the bill was held in committee for further study.
Credit Reports
and Employment (N)
HB 780 by Rep. Kendrick. Would make it unlawful for an
employer to fail or refuse to hire, bar, discharge from employment,
or otherwise discriminate against an
individual because of the individual's
credit history or credit report. The bill includes an exception for
the use of such information in employment decisions if it directly
relates to a bona fide occupation qualification reasonably necessary
to the normal operation of that business or enterprise. The bill
further says that any employer or agent of such employer who
violates this new statute would be liable to the injured employee
for all actual damages thereby suffered by the employee and for
reasonable attorney's fees incurred by the employee in asserting
successful claim. GBA opposes.
Cosigner/Guarantor Notice of Default
HB 245 by
Rep. Kidd. Would require
cosigners or guarantors of loans to be notified upon
default. The House Judiciary Committee accepted GBA
requested changes on where notice could be sent. The bill was tabled.
DBF Housekeeping - Banks & Trust
Companies (N)
HB 945 by Rep. Teasley.
Would allow banks, with
approval from the Department of Banking and Finance,
to sell shares for less than par, and would allow, also with DBF
approval, a bank to pay dividends from sources other than retained
earnings. GBA supports.
DBF Housekeeping - Mortgage Lenders
and Brokers (N)
HB 946 by Rep. Teasley. Contains a number of provisions
related to mortgage activities and license qualifications. GBA
supports.
Derivatives Within Bank
Lending Limits. (N)
HB 886 by Rep. Williamson. Would require derivatives
exposure to be counted within the bank's legal lending limits. The
bill is necessary to conform with a mandatory requirement in the
Dodd-Frank Act. State-chartered banks in states that do not make
this change in their statutes will be unable to participate in the
derivatives market after Dec. 31, 2012. The Comptroller of the
Currency will be issuing guidelines for nationally-chartered banks.
This is a competitive equity issue and we have long supported
legislation ensuring that state-chartered banks are on a level
playing field with nationally chartered banks. At last count, 14
Georgia-chartered banks had any sort of derivatives exposure. GBA
supports.
Foreclosure - Extended Notice/Right to Cure
HB 419 by Rep. Mitchell. The bill as
introduced would have extended the
notice period of a foreclosure from 30 to 90 days and given the
borrower the right to cure a default up to three times during the
life of a mortgage. The House Judiciary Committee eliminated
lengthening the foreclosure notice period at our request. The bill
was reported out of committee. No further action was taken.
Foreclosure - Tenant rights
HB 445 by Rep. Welch. is
legislation patterned after the tenant rights rules in federal law,
but goes much further in several areas. It specifies that
foreclosure alone is not grounds for eviction of a tenant. The
tenant would have a right to remain until the end of their current
lease or have 90 days' notice if the new owner intends to occupy the
property as a primary residence. The bill is pending in the House
Judiciary Committee.
Garnishment proceedings
(N)
HB 683 by Rep. Willard. Passed and signed by the Governor
Feb. 7. This bill allows authorized
officers or employees of a company to file certain answers on behalf
of garnishees without the action being considered the practice of
law. The State Bar has ruled and the Supreme Court affirmed
that such actions are technically the practice of law that
can be performed only by licensed attorneys. This bill fixes
that so the primarily administrative task of searching for an
account to answer a garnishment summons does not require expensive
legal counsel. The bill also requires garnishments to be served to
the company's agent of record, and
allows the
company to deduct $50 (previously $25) or 10% of the amount paid
into court, whichever is greater, not to exceed $100
(previously $50), as reasonable attorney’s fees or expenses.
Liens - Condo Associations
SB 136 by Sen. Hamrick. As introduced the bill provided that any lien
filed by a homeowners association for past due condo fees would be
superior to the lien of any mortgage in a foreclosure for amounts
represented by the lien equal to the previous 12 months of fees. At
GBA's request, the author amended the bill to remove these
provisions, but the bill was not advanced. Putting homeowner
association dues in a priority position over a mortgage in Georgia’s
foreclosure statute would be bad public policy and GBA opposes that
effort..
Mortgages - Fraud, Foreclosure
HB 237 by
Rep. Golick, on behalf of Attorney General Sam Olens. The bill would
extend the mortgage fraud statutes through the foreclosure process.
We worked with the Attorney General and got certain provisions in
the bill changed to narrow the focus to mortgage fraud. The bill
passed the House and is pending in the Senate Judiciary Committee.
Mortgages - Vacant
Property Registration
HB 110 by Rep. Jacobs.
Preempts local ordinances requiring the registration of vacant or
foreclosed property and replaces those ordinances with statewide
standards. The bill also provides a way for foreclosing lenders to
avoid having to register with these local registries. It's simple:
the new owner (the lender in the case of a foreclosure) files the
new deed within 60 days that will contain more identifying
information than current deeds require and, upon providing a receipt
of that deed filing to the local registry authority, the lender will
not have to actually file with the registry Using the provisions in
the bill, local governments will be able to know the true owner of a
property for code enforcement purposes. The bill passed the House
and is pending in the Senate Banking and Financial Institutions
Committee.
Mortgages -
Reconveyances and Fees
(N)
HB 739 by Rep. McKillip. Designed
to prevent certain fees to be assessed on property that would be
collected every time the property is sold.
This bill was introduced to replace HB 129 (below), as it got
amended several times the last days of the session. McKillip and the
State Bar felt they needed to start fresh
with this new version.
Mortgages -
Reconveyances and Fees
HB 129 by Rep. McKillip. Designed
to prevent certain fees to be assessed on property that would be
collected every time the property is sold. We understand the bill
was introduced at the request of the State Bar of Georgia and
mirrors legislation passed in other states.
The bill has passed the House, was amended to try to accommodate
provisions in HB 110 and 237, but did not pass as the session ended
before debate concluded.
Summons - Personal
Service on a Corporation (N)
SB 348 by Sen. Emanuel Jones.
Would limit to only a corporation's registered agent where personal
service of a summons can be made. The bill does not change the
provision in current law that if the registered agent cannot be
located, then the Secretary of State will be served.
We support this legislation.
Taxes
HB 385 by Rep.
Channell. This bill is the result of the work of the Special Council
on Tax Reform and Fairness for Georgians (access report here:
Special Tax Reform Council
Report). The Council, comprised of a cross-section of
business people and economists, submitted a report to the General
Assembly in January outlining their recommendations to overhaul
Georgia's tax code. Legislators met often
throughout the session and reviewed a number of draft bills. In the
first version, we raised concerns about Sub S stockholder treatment,
the loss of gross receipts carry forward tax credits, new sales
taxes on electronically downloaded software, and the administrative
burden to collect and remit sales taxes on safe deposit box rental
fees and credit card membership fees. In all the drafts after that
first version, the concerns we had raised had been resolved.
However, the leadership decided that tax reform was too important to
be dealt with in a rushed and politically charged environment, and
decided to postpone further consideration. It is expected to be on
the table again in 2012 session.
Actively Monitoring
Deed Transfers/Foreclosure Notice/Foreclosure Fraud.
SB 123 by Sen. Jackson. Requires all deeds to
secure debt be transferred, extends the notice period for
foreclosures to 60 days and creates a new foreclosure fraud crime
within the existing mortgage fraud statute.
Default Judgments
- Notification
SB 353 by Rep. Jones. Would add a
new notice to the defendant in a default judgment proceeding after a
case has automatically gone into default for lack of an answer from
the defendant. The new notice would be sent to the defendant
advising of the automatic default. Further, new language would be
required in the filing following the 15-day period for response for
the plaintiff that would affirm the notice had been sent.
Debt Adjustment Services
(N)
HB 901 by Rep. Weldon.
Would allow
debt settlement companies to operate in Georgia under certain
parameters. Specifically defines
"debt settlement" services as a negotiation on a debtor's behalf for
which payment for services is contingent upon an agreement being
reached and the debtor begins making payments on the settlement. It
would exclude debt settlement arrangements from fee caps associated
with other debt adjustment services. It would also require audits
and insurance to be obtained and maintained by debt adjustors.
Escrow Accounts - Preneed
(N)
H.B. 933
by Rep. Rogers allows funds placed in escrow for certain
funeral-related services to be released for monuments placed into a
bonded memorial storage program. The bill is pending in the House
Committee on Regulated Industries.
Foreclosure Registries
SB 262 by Sen. Ramsey. Would impose a $100/day fine
for real property code violations and unpaid fines can become
liens; and further, requires the clerk of superior court in each
county to establish a registry of foreclosed properties.
Foreclosure --
Notices of Sale Under Power (N)
SB 333 by Sen. Stone. Would eliminate certain exemptions
so that notices of sales
made on foreclosure under power of sale would be provided to all
debtors,
including commercial
and bank-owned property.
Interest Rates/Collateral
HB 281 by Rep. Harbin. Establishes that proceeds from a loan or
advance may be used as collateral and that those proceeds do not
equate to a reduction in principal for calculating interest.
Land Banks
SB 284
by Sen. Golden would expand land bank powers and authorities, such
as such as endowing land banks with greater options at tax sales,
providing increased options for financing land bank operations, and
allowing multiple counties to form a land bank.
Liens - Motor
Vehicles
HB 309 by Rep. Rice. Would raise the value of a vehicle that can
be scrapped to $850 and institutes certain information and
notification standards to the Dept. of Revenue when a vehicle is
scrapped.
Merchant Acquirers - Limited Purpose Bank
(N)
HB 898 by Rep. Ehrhart. Would create a special-purpose
state-bank charter for companies that provide a variety of services
for processing payments over payment card networks
Motor Vehicle Title Pawn Companies
(N)
HB 950 by Rep. Roger Williams.
Would create
a new regulatory structure for title pawn companies within the
Department of Insurance.
Mortgages, Real Property, Foreclosures -
Any Document
Securing Payment of Money Shall Be Deemed a Mortgage
(N)
HB 781 by Rep. Kendrick. Stipulates that after Dec.
31, 2012, any document or instrument made for the purpose of
securing the payment of money for real property shall be deemed to
be a mortgage and that all laws, including those for foreclosure,
related to mortgages apply. The bill also to provides that for
foreclosures on mortgages executed after Jan. 1, 2013, the court may
not issue deficiency decrees or allow lawsuits to recover
deficiencies against the mortgagor or his/her heirs/assigns.
Mortgages, Foreclosures, Right to
Cure, Secondary Market Activities, Reverse Mortgages, Loan
Modifications
HB 338 by Rep. Bryant
extensively revises current statutory provisions
relating to the creation, transfer, modification, and foreclosure of
mortgages and deeds to secure debt as well as other documents
creating security interests. The bill also creates a new regulatory
scheme for the transfer of security interests and requires recording
as condition of foreclosure. A minimum period of 120 day's
delinquency is mandated before foreclosure and other proceedings may
be commenced, and creditors must provide owners of residential
property with a right to cure and a 45-day notice of such right
prior to commencing foreclosure proceedings. New notice provisions
prior to the initiation of foreclosure proceedings as well as the
contents and manner of delivery of such notice are included and
deficiency judgments are prohibited in certain circumstances. The
bill limits the authority of nominees to initiate foreclosure
proceedings or otherwise act for creditors and regulates the
creation of reverse mortgages. Other provisions require certain
disclosures and counseling in connection with reverse mortgage
transactions. Fraudulent activities in the process of foreclosure
are prohibited and remedies related to that activity are provided. A
final provision regulates the manner in which mortgages may be
modified.
Mortgages - Waiver of Borrower Rights
and Lien Forfeiture
(N)
SB 365 By. Sen. Hamrick. Would require mortgages to include a
waiver of rights to be signed by the borrower acknowledging the
power of the lender to pursue nonjudicial foreclosure, the waiver of
certain U.S. and Georgia Constitutional rights and that he or she
has read and fully understands the mortgage. Requires an attorney to
attest under oath the borrower signed and understood the waiver.
Failure to include the signed waiver or attorney's attestation could
render the mortgage void.
Small
Business Classifications
(N)
H.B. 854 by Rep. Hamilton. Amends the State Small
Business Act to potentially expand the number of employees a
business could have to gain certain preferences for state
purchasing. By tying the number of employees to the federal size
guidelines administered by the Small Business Administration the
current limit of 100 employees would be retained for most
businesses, but could go as high as 1,500 based on the industry
classification. Click
here to see the SBA's classification guidelines.
Tax Credits - Conservation
HB 222 by Rep. Jay Roberts. Creates an opportunity
for those who have unused conservation tax credits to transfer them
to new owners. A hearing was held in a Ways and Means Subcommittee
and the members are awaiting more information about the cost to the
state. While we would be supportive of making the transfers
applicable to current credits, the subcommittee was clear that they
were unwilling to go that far. The bill was tabled.
Title Insurance -
Closing Protection Letters (N)
SB 331 by Sen. Shaffer. Creates
a new type of instrument title insurance companies may issue to
indemnify a
buyer, lender, or seller in transactions where title to real estate
is being conveyed solely against losses not to exceed the amount of
the settlement funds under certain circumstances
such as fraud or negligence.
Other Bills of Interest
Credit Reports
SB 42 by Sen. James.
Would prohibit employers from requesting credit reports on employees
or prospective employees with certain exceptions. Federally insured
banks and credit unions are exempt.
Constitutional Questions
HB 3 by Rep. Franklin. Requires banks to open accounts
denominated in gold and accept deposits and pay out in gold upon
request. No action taken
SB 116 by Sen. Shafer. Requires any bank serving as a depository
for the state to offer and to accept gold and silver coin for
deposit. No action taken.
HB 19 by Rep. Franklin. Eliminates the Federal Reserve
Bank of Atlanta’s exemption from the state income tax.
Conveyances - Security Interest
Transfers
HB 465 by Rep Weldon. Establishes that Instruments executed
by a corporation releasing or transferring a security agreement,
when signed by one officer of the corporation or an appropriately
designated person is conclusive evidence that the signer is
authorized to do so and that a corporate seal does not need to be
affixed. The bill was reported out of the House Banks and Banking
Committee, but no further action was taken.
Deposits in Certain Banks
HR 407 by Rep. Heckstall calls on all businesses and
governmental entities operating in Georgia to consider opening
deposit accounts with African-American owned financial institutions.
Family Economic Security
HB 458 by Rep. Bruce creating the Georgia Commission on
Family Economic Security.
The commission shall develop a comprehensive
plan to address the needs of the average Georgian with particular
concern for Georgia's most vulnerable citizens: children and the
elderly. The initial goal of the commission is to develop a
strategic plan to reduce extreme poverty in Georgia by at least 50
percent by 2015.
Foreclosure
HB 204 by Rep. Mitchell.
Would provide for homeowner
relief from unfair practices related to foreclosure and foreclosure
rescue schemes. Would require certain written agreements, prohibit
payment of fees until all agreed upon services are completed and
provide a three-day cancellation period. Banks are exempt.
HB 209 by Rep. Johnson. Requires
that
the official organ of each county shall list the addresses of
property advertised for nonjudicial foreclosure each week in
alphabetical or numerical order.
HB 447 by Rep. Mitchell. Would require foreclosure rescue
agencies and consultants to be licensed and bonded; voids rescue
transactions deemed as unfair. Banks are exempt.
Fraud - Deposit Account
HB 488 by Rep. Cheokas. Would allow a victim of account
fraud to recover court and mailing costs associated with recovering
funds. The bill passed out of committee but no further action was
taken.
Garnishment Period
SB 11 by Sen. Seay. Extends the period of continuing garnishment
from between 179 to 539 days or 195 to 559 days depending on the
type of garnishment.
Infrastructure
Financing Authorities.
HB 429 by Rep. Powell creates two new state authorities to
provide a new financing mechanism for local government
infrastructure projects.
Insurance
HB 298 by Rep. Harbin.
Would provide an
insurance premium tax credit for large insurers participating in the
investment pool.
Pawnbroker Fees
SB 233 by Sen. Miller. Would limit fees and taxes cities and
counties can impose on pawn transactions.
SB 379 by Sen. Chance (N). Similar
to the above bill, would prohibit cities and counties from imposing
fees or taxes on certain pawn transactions.
Property - Seizure
HB 56
by Rep. Franklin. Provides certain new restrictions on the seizure
of property by governmental entities for non-payment of taxes.
Preneed Services
HB 356 and
HB 449 by Rep. Sims are intended to
clarify that accounts opened in financial institutions for preneed
services can be considered as a multiple account and the account can
be titled in the name of the entity registered under the state
preneed rules and payable on death of the purchaser in favor of the
preneed provider.
The bills were reported out of committee
in the House, but no further action was taken.
Property - Forfeiture
SB 230 by Sen. Williams. Specifies that a lienholder's
interest in a property can't be subject to forfeiture unless there's
proof the lienholder or landlord participated in racketeering.
Taxes - Ad Valorem
(N)
HB 794 by Rep. Mayo. Would change the statute related to ad
valorem taxation of property
to remove the maximum value for a comparable arms-length or bona
fide sale and replace that with language that such price will simply
be considered in determining value.
