March 21, 2008
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The 2008 Session
of the Georgia General Assembly has focused on a number of
issues, but tax relief has been the most talked-about. We have
reported on Speaker of the House Glenn Richardson’s bill
that would reduce certain ad valorem taxes. His original
concept would have shifted ad valorem taxes to a statewide 4%
sales tax on consumer services including financial services.
His plan was substantially changed to only abolish the ad
valorem tax on automobiles. After one failed attempt, the
Speaker amended his bill again to lessen the impact on local
governments and the bill passed overwhelmingly. Since the sales
tax piece was no longer part of the proposal, the direct impact
on financial institutions was eliminated. A new provision was
added to help fund a trauma care network.
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When his
bill went before the Senate, Lt. Gov. Casey Cagle
(R-Chestnut Mountain) and Senate Finance Committee
Chairman, Chip Rogers (R-Woodstock) changed the Speaker’s
bill entirely by eliminating the automobile tax and trauma care
funding and instead began moving a bill that would reduce the
state income tax by 10% over a five-year period. Governor Sonny
Perdue weighed in saying neither idea was a good one as both
would require deep cuts in education, health care and
transportation and he gave every indication he would veto any
legislation. However, if the Legislature passes the proposed
Constitutional Amendment providing tax relief as proposed, that
Amendment would bypass the Governor and go straight to the
voters in November. |
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| A subcommittee of the House Judiciary Committee is meeting next Tuesday to consider the two bills relating to foreclosure which have recently passed the Senate. Both bills were sponsored by Sen. Bill Hamrick, Chairman of the Senate Banking and Financial Institutions Committee. S.B. 519, originally would have required a notice of foreclosure sale to be sent to the borrower two weeks prior to beginning the 4-week advertisement period. The bill would also have required a 90-day notice if it was a high-cost loan under the Georgia Fair Lending Act. The bill was amended in committee to give lenders a 30-day window in which to send the notice of foreclosure sale, but no later than 30 days prior to the sale. This language is somewhat confusing and press reports have said it requires a 60-day notice, but that is inaccurate. The significant change to current law is that the bill moves the current 15-day notice to a 30-day notice. The language dealing with high-cost loans was deleted altogether. The second bill, S.B. 531, requires an advertisement of foreclosure to include the name of the security holder as well as the name and contact information for the servicer. |
This language was included in the
bill at the request of representatives from Atlanta Legal Aid
and others. They testified in support of the bill in committee
and said without having the name of the security interest
holder, they had difficulty working out repayment plans or loan
modifications with servicers. The primary opposition to this
language came from the Mortgage Bankers Association who
reported current industry practice was for servicers to be
empowered to handle loan modifications. They also expressed
concern about the language in the bill that prevents
foreclosures unless loan assignments had been recorded in the
deed records. Apparently this is not current industry
practice. The House Judiciary Committee chose not to act
on several foreclosure-related bills they had pending before
them this year. We will let you know what they decide to do
with these two bills from Sen. Hamrick. |
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The Senate
Banking and Financial Institutions Committee has reported an
amended House-passed bill that sets the fee for consumers to
place freezes on their credit files from the credit reporting
agencies. H.B. 130, by Rep. Calvin Hill
(R-Canton) and others, initially set the maximum fee at $10.00,
but that fee was reduced to $3.00 by an amendment prior to its
passage in the House. The Senate committee left the fee at
$3.00 along with language allowing the Banking Commissioner to
raise the fee under certain circumstances to no more than
$5.00. The House Banks and Banking Committee has
reported an amended Senate-passed bill, S.B. 361 by Sen.
Chip Rogers (R-Woodstock) and others, that is essentially
identical to H.B. 130 except that the Banking Commissioner could
raise the fee to no more than $10.00 under certain circumstances
and without
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getting further permission from the Legislature. Both bills tie
the fee to the actual cost to the reporting agencies – no profit
allowed. All the credit reporting agencies currently have
voluntary file freeze provisions in place for consumers. The
most common fee is $10.00 to have a freeze placed on a credit
file. The General Assembly seems intent on passing legislation
this year, but they will eventually have to agree on the pricing
structure. Setting legislatively-mandated fees is a departure
from years of tradition. Beginning in the early 1980’s, the
General Assembly began to drop statutory fees to let the free
market work. The legislators realized the fees they had set as
a cap would always be the fee charged – never less. Once they
took off the caps, competition quickly reduced fees. |
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| The Senate has passed, S.B. 58 by Sen. Preston Smith (R-Rome), repealing the provision in current law that outlines how taxes are to be paid for property lying in more than one county. Currently the total tax is paid to the taxing authority where the majority of the property is located for distribution to the other jurisdiction(s). This issue has been raised before, but in a far more difficult way for taxpayers. In a previous session, a similar bill in the House would have required the taxpayer to calculate the taxes owed to each jurisdiction based on a mathematical division of the property. |
The version now being considered
requires a tax bill to be sent by each taxing authority with the
calculation already made. Lenders had expressed opposition to
the original version. The House Ways and Means Committee
is studying this version and is expected to vote on the bill
soon. |
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 Investment
Bill Vote Expected |
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 A
Senate-passed bill, S.B. 496 by Sen. Horacena Tate
(D-Atlanta) and others, amends the appraisal statute to deal
with fraudulent appraisals. A subcommittee of the House
Banks and Banking Committee is reviewing the bill to ensure
there are no unintended consequences. The prescriptive language
in the bill could possibly be interpreted by a court to prevent
an appraiser from knowing the loan value of a property prior to
the appraisal. |
 GBA
has been 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 of institutional funds. The Senate Banking and
Financial Institutions Committee is scheduled to vote Monday
on the bill. |
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Investment
Bill Vote Expected |
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A bill introduced at the request of the request of the
Georgia Department of Banking and Finance (DBF) has passed
the final legislative hurdle and is on its way to the Governor
for signature. H.B. 921 by House Banks and Banking
Committee chairman, James Mills (R-Gainesville), would
allow Georgia to participate in a nationwide electronic system
to track mortgage lenders and mortgage brokers. The project has
been a priority of the Conference of State Bank Supervisors
and DBF Commissioner, Rob Braswell. The system is
intended to help state regulators ensure the information
provided by their proposed licensees squares with what another
state may have on a particular individual. States will be able
to enter information about individuals that will allow the other
states to review as applications for license are being
considered. The system was rolled out earlier this year among a
few of the early adopting states. GBA supports the concept. |
A subcommittee of the House Judiciary Committee chaired
by Rep. Steve Tumlin (R-Marietta) is set to consider a
Senate-passed bill, the Uniform Securities Act, S.B.
358. Senate Banking and Financial Institutions Committee
Chairman Bill Hamrick, (R-Carrollton) is the sponsor
of the bill and we appreciate his efforts to bring the Georgia
statute in line with many other states. The bill was requested
by the Secretary of State, Karen Handel's office and we
worked with their representatives to have several areas of the
bill amended. Many of our concerns were addressed in the
Senate; however, we believe the bill can be further perfected
and will be working with members of this subcommittee toward
that end. A number of states have adopted this legislation
and amended their version to include a number of bank exemptions
contained in the Gramm Leach Bliley Act. The current
version contains a few of those exemptions, but not all. |
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Contact GBA Staff Lobbyists With Questions |
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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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Georgia Bankers Association • 50 Hurt Plaza, Suite 1050, Atlanta, GA 30303 • Phone 404.522.1501 • Fax 404.522.9848 • www.gabankers.com |
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