Tax Bill Assigned to Subcommittee
H.B. 441, legislation introduced at GBA’s request by Rep. Johnny Floyd (R-Cordele), would revise tax code provisions relative to the adjustment of taxable income with respect to income from federal obligations and certain other obligations. In 2005, the legislature adopted a change in tax policy which disallowed any interest expense attributable to tax exempt dividend or investment income.  The result for some of our members has been an increase in their overall state tax liability.  The bill as introduced would return the code to its original form effective with the tax year beginning January 1, 2008.  The bill was first read in the House Ways and Means Committee this week.  Our thanks to committee members James Mills (R-Gainesville) and Richard Royal (R-Camilla) for their assistance is explaining the bill to the committee.  The bill has been assigned to the Income Tax Subcommittee and we expect a full hearing early next week.  Click here to read an issue brief we are providing members of the Committee to help them understand the need for the bill.
 

Bill to Abolish Certain Retraining Tax Credits Heard in Committee
At the request of the Revenue Department, legislation was introduced, H.B. 361, by Ways and Means Committee chairman, Larry O'Neal (R-Warner Robins) which would essentially eliminate the ability of financial institutions to take advantage of the existing retraining tax credits in the Georgia code.  The bill was the subject of a hearing this week before the Tax Reform Subcommittee.  In discussing the bill, Chairman O’Neal made it clear that he was only sponsoring the bill at the request of the Department and encouraged the members to have an active debate (which most members understood that he had serious concerns about the impact the bill would have on businesses using the tax credit).  Several witnesses testified before the committee representing a diverse cross-section of businesses which have benefited from these retraining credits.  Among those testifying was GBA Associate Member Terry McMillian of McMillian and Associates, Inc., in LaGrange.  Terry did an excellent job of explaining how tax credits work and how Georgia is looked upon favorably by other states for providing these incentives for business and industry.  While the bill could move further in the process, it appears doubtful at this time.
 

REIT Bill Introduced
H.B. 447 has been introduced by House Ways and Means Committee Chairman Larry O’Neal.  The bill essentially eliminates any deductions for captive Real Estate Investment Trusts (REIT) used by businesses operating in Georgia.  In explaining the bill to the committee, Mr. O’Neal said his intention was to tax those entities which he felt were abusing the intent of the original REIT federal statutes.  Specific reference was made to Wal-Mart and how the company receives favorable tax treatment by putting many of their stores in a REIT and then leasing them back.  We understand a number of our members have REITs that are used for a multitude of purposes and which could be caught by this legislation.  Please let GBA’s Joe Brannen know if your bank would be affected.
 

Tax Data Match Bill to be Revised
GBA’s Operations and Technology Committee has been reviewing H.B. 353 by Rep. Larry O'Neal, Chairman of the House Ways and Means Committee.  The bill was introduced at the request of the Revenue Department and sets up a new data match program for financial institutions to use in responding to summons of garnishment issued by the Department.  The program attempts to follow a similar program financial institutions are already required to use as part of the parent locator service. A similar program is used in Maryland.  We have given feedback to Mr. O’Neal and we understand the Revenue Department will be proposing a substitute bill.  
 

Payday Lending Bill Reported From Committee
H.B. 163, introduced by Reps. Tumlin, Williams, Wix, Franklin and Ehrhart, was reported out of the House Banks and Banking Committee this week after two spirited hearings.  The bill creates a regulatory structure for deferred presentment services (more commonly known as payday loans).  During a subcommittee meeting, an amendment was added to the bill moving the regulation of payday lenders from the Department of Insurance to the Department of Banking and Finance.  The payday loan industry in Georgia was effectively eliminated several years ago.  This bill is designed to bring the industry back under a regulatory scheme that was not in place when the original bill passed.  The bill has drawn opposition from advocacy groups such as AARP, the Georgia Watch and the Center for Responsible Lending.   The bill now goes to the House Rules Committee and is expected to be before the full House next week. 
 

Credit Report File Freeze Meeting Called
H.B. 130 was introduced by Reps. Hill, Mills, Meadows, England and Benton.  The bill allows individuals to place and remove security freezes on credit reports.  The bill is similar to legislation enacted in other states that has been used successfully by the credit reporting agencies.  A Subcommittee of the House Banks and Banking Committee is slated to meet Monday to discuss this and the three other bills relating to file freezes that have also been introduced.  This meeting is designed to be a working session where each of the bills will be discussed.  According to Rep. Calvin Hill (R-Canton) when he announced the meeting, their intent is to review the bills to determine the best language in each bill.  There is a possibility a composite bill will be drafted for further consideration.
 

Bid & Performance Bonds Bill Passes
H.B. 134 was introduced by Reps. England, Heard, Coan and Benton.  The bill raises the amount from $300,000 to $750,000 when any bid or performance bond is required giving the governmental entity the discretion to accept an irrevocable letter of credit issued by a bank or savings and loan association in lieu of a bond otherwise required. The bill has passed the House and is pending in the Senate Committee on State and Local Government Operations.

Stopping Automatic Drafts Resolution
A resolution was introduced this week, H.R. 278 by Reps. Beasley-Teague, Fludd, Brooks, Stanley-Turner and Jordan, calling on Congress to enact legislation which would penalize financial institutions which do not stop automatic deductions from customers’ accounts after proper notification has been given to the institution.  We are unaware of instances where banks are not stopping automatic drafts and will speak with these legislators to better understand their concern.

Legislature in Recess Friday,  Monday and Next Friday
The General Assembly was in session Tuesday through Thursday this week and plans to be in session three days again next week.  Efforts are continuing to work out shortfalls in the budget to fund the PeachCare program.  Other legislative business is continuing at a rapid pace.  While the Legislature is in recess, most of the standing committees and their subcommittees are actively pursuing legislation assigned to them.  We expect the General Assembly to be in recess for several days next month with a prediction of an adjournment in early April.
 

GBA Adds Bills Daily to Our Monitoring List
The Georgia Bankers Association is already following a number of bills introduced in the 2007 session of the General Assembly and updates the Government Relations area of our website daily.  Please check this area frequently so you will be informed about issues affecting your industry.  Please click here to see the bills currently on our watch list.
 

GBA's Lobbyists
GBA is represented this year at the Capitol by our three lobbyists:  Joe Brannen, Elizabeth Chandler and Don Browne so give them a call if you have questions about any legislation.  Don’t forget to check the 2007 State Issues link on GBA’s website for up-to-the-minute status of bills being followed this session.

Joe Brannen, Direct phone, (404) 420-2026
Elizabeth Chandler, Direct phone, (404) 420-2027
Don Browne, Phone, (404) 522-1501

GBA Keeps You Informed
GBA’s e-Legislative Update is intended to keep you apprised of the bills that the GBA is tracking on the industry’s behalf and is sent on Fridays during the session.  On Fridays when the Update is not mailed, it will be sent electronically to those who have provided us with their email addresses.  The ‘State Issues’ section of GBA’s website, is linked to the website maintained by the General Assembly and assures that you will have the latest version of any bill being tracked by the GBA.

The e-version of GBA's Legislative Update will be published regularly during the 2006 session of the Georgia General Assembly.  Please let GBA's Lydia Thomas know of others you would like added to our distribution list.
 

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Georgia Bankers Association - 50 Hurt Plaza, Suite 1050, Atlanta, GA 30303 • Phone 404.522.1501 • Fax 404.522.9848