February 22, 2008

Speaker Richardson's Tax Plan Moving Through Process
The House Ways and Means Committee has reported Speaker of the House Glenn Richardson’s bill that would shift the ad valorem school tax to a 4% statewide sales tax.  The bill also eliminates the ad valorem tax on certain motor vehicles and includes a new vehicle registration fee to help fund a state trauma care network.  The Speaker has continued to perfect his legislation in response to input from individual members of the Legislature and affected parties.  As we reported in previous editions, the Speaker’s bill listed “banking” services among those on which the sales tax must be assessed.  The version reported out of committee mentions more specific services than the original bill and seems to narrow the impact.   However, as is common with most other legislation of this nature, the bill gives the Revenue Commissioner wide latitude in defining the services which will be covered for all industries.  The committee also reported the constitutional amendment that must be approved by the voters to implement the GREAT Plan.  They also reported a bill by Sen. Chip Rogers (R-Woodstock) that limits the ability of local governments to raise ad valorem rates.

Foreclosure Bills Introduced - No Action Scheduled So Far
A number of foreclosure bills have been introduced this session.  The bills are mostly intended to slow down the foreclosure process by extending either the notice or advertising periods for foreclosures.  Other than the reintroduction of the previous Georgia Fair Lending Act, none of the bills would require a judicial foreclosure process.  Here’s a summary:

S.B. 465 by Sens. Jones, Adelman, Reed, Seay, Brown and others.  Extends the foreclosure process to 90 days and requires a new notice which would give the borrower information about the loan balance and the name of an individual with whom the borrower can negotiate a settlement to avoid foreclosure.

  S.B. 459 by Sens. Reed, Johnston, Brown and Shafer. Provides that real estate sales made under power of sale contained in mortgages, deeds, or other lien contracts shall be advertised weekly for ten weeks.

H.R. 1153 by Reps. Mitchell, Williams, Watson, Mangham and Stevenson.  Calls on Congress to pass legislation which would create a new agency to protect banks from bankruptcy, put a moratorium on foreclosures and convert existing mortgage interest rates so that payments would equal an effective rental rate.
Senate Passes File Freeze Bill   Home Inspector Board Proposed
The Senate passed legislation this week that would allow consumers to place a freeze on their credit reports with the major credit reporting agencies.  The bill, S.B. 361, sponsored by Sen. Chip Rogers (R-Woodstock) and others, was amended on the floor so that the General Assembly would not be setting the exact fees charged to place and remove freezes. A similar bill has passed the House, H.B. 130, but that bill has a $3.00 limit on the fees.  A conference committee will most likely be appointed to consider the differences in the two bills.   Sen. John Wiles, (R-Kennesaw) and others introduced a bill this week, S.B. 485, that would create a new state licensing board to oversee individuals involved in the home inspection business.  In addition to creating the board, the legislation sets minimum requirements for someone to be eligible for a license.  The bill requires anyone providing residential inspection services for a fee to be licensed and participate in continuing education.  The bill is pending in the Senate Committee on Regulated Industries and Utilities.

Motor Vehicle Seizure Bill Reported from Committee
The Chairman of the House Banks and Banking Committee, James Mills (R-Gainesville) has introduced legislation, H.B. 978, which would require the seizure of vehicles involved in accidents or stopped for violations and driven by individuals who could not prove their legal status for being in the country.  The bill was debated at some length before the House Special Rules Committee prior to being reported unanimously.  Chairman Mills related several instances where undocumented individuals had caused serious accidents and were uninsured.  He said his idea was to have the vehicles seized and sold to help compensate the victims.    The bill currently references the seizure provisions currently in the code as they apply to contraband drugs.  In speaking with Chairman Mills, we understand he is looking at alternatives as his intention is not to hurt legitimate lien holders.  Several groups such as the Georgia Association of Latino Elected Officials and the American Civil Liberties Union spoke against the bill.

Original Georgia Fair Lending Act Reintroduced
Sen. Vincent Fort (D-Atlanta) and others introduced legislation this week, S.B. 475, which is almost identical to the original version of the Georgia Fair Lending Act that was adopted in 2002.  You may recall that the Legislature had to revise that version of the bill in 2003 because of the enormous and negative impact on the entire mortgage market in Georgia.  The bill includes all the language which disrupted the secondary market as well as adds new language requiring a judicial foreclosure process.  This version of the bill also includes banks and other financial institutions that were preempted from coverage by the federal and state regulators.  The bill has been assigned to the Senate Banking and Financial Institutions Committee.    In reacting to the introduction of the bill, GBA President Joe Brannen said, “We’ve been down this path before and saw what a devastating effect a poorly drafted piece of legislation with noble intentions could have on both an entire industry and every citizen seeking a mortgage.  We clearly recognize many mortgage holders are under stress and Georgia’s foreclosure rate is at an all time high.  However, passing this bill will only serve to make matters worse,” Joe concluded.  No action is currently scheduled in the committee.

Appraisal Bill Introduced

   New Financial Licensee Proposed
S.B. 496 was introduced this week by Sen. Horacena Tate (D-Atlanta) and others which amends the appraisal statute so as to prohibit the solicitation or facilitation of the fraudulent appraisal of the value of property offered as security for a mortgage or loan.  The exact language of the new prohibition language being added is “Knowingly compensate, instruct, induce, coerce, or intimidate or to attempt to compensate, instruct, induce, coerce, or intimidate an appraiser for the purpose of corrupting or improperly influencing the independent judgment of such appraiser with respect to the value of property offered as security for the repayment of a mortgage or loan."  It is too early to predict what might happen with this legislation.  The appraisal statutes have not had a substantial update in several years.   Legislation was introduced this week by Sen. Ronnie Chance (R-Tyrone) and others which would create a new licensed entity within the Georgia Department of Banking and Finance that would cater to individuals who may not have a traditional bank account.  According to introductory language in the bill, S.B. 489, among other things, the bill is intended to “provide a vehicle for banking services and mainstream credit products to build and rebuild credit histories to enable customers in all segments of the financial spectrum, especially the financially underserved and unbanked populations, to improve their credit ratings and qualify for mainstream financial services.”  The bill is pending before the Senate Banking and Financial Institutions Committee.
Uniform Act Passes Full Committee   Stelling Recognized by Senate
Representative Steve Tumlin GBA is following H.B. 972 by Rep. Steve Tumlin (R-Marietta) and others.  The legislation would adopt the "Uniform Prudent Management of Institutional Funds Act" which provides standards for charities to use in managing investments and spending from endowments and other rules regarding the management institutional funds.  A hearing was held on the bill this week and it was reported out of the House Judiciary Committee.   Congratulations to Kessel Stelling, CEO of Bank of North Georgia, Alpharetta, for being recognized by the Senate this week with a Resolution.  S.R. 985 by Sen. Judson Hill (R-Marietta) and others recognizes Kessel for his many years of civic involvement and for most recently being named by Governor Sonny Perdue to the Board of Regents.  Kessel is also chair this year of the Metro Atlanta Chamber of Commerce.

Contact GBA Staff Lobbyists With Questions

GBA's three lobbyists will be onsite at the Capitol all session to be available to legislators and staff as questions arise about the various bills that may affect the banking industry.  If you have questions about any legislation pending, please call on these professionals for their help.  Also, GBA's State Issues Page of our website will be updated daily during the session.

  

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