Legislative Update
March 28, 2003 A review of current developments from the Georgia Bankers Association
The General Assembly passed the supplemental appropriations bill earlier this week thereby assuring state agencies of their final budget numbers for the remainder of this fiscal year which ends June 30. There is still great concern among legislators about the fiscal 2004 budget and the revenue needed to balance the budget. The House of Representatives rejected the Administration’s suggestion that tobacco taxes be raised to cover a substantial portion of the shortfall. Legislators are reviewing their options and state agencies are bracing for more budget cuts beyond those which were already enacted in order to balance the fiscal 2003 budget. The House voted to reconsider their action on the tobacco tax, so that option remains on the table as a possibility.
House Banks and Banking Committee Chairman Johnny Floyd (D-Cordele) introduced H.B. 777 this week. A number of other legislators, including most of the leadership, cosponsored the bill. The legislation would allow for the acceptance of Letters of Credit issued by the Federal Home Loan Bank (FHLB) as acceptable collateral for depositories to use in securitizing public deposits. Financial institutions accepting public deposits are required to pledge collateral equal to 110% of the deposits in excess of FDIC insurance limits. The pledging requirement is administered through the Office of Treasury and Fiscal Services and the types of collateral which may be used to pledge are authorized by statute. H.B. 777 adds FHLB letters of credit as an additional type of collateral which could be used for the institution’s pledge. Currently, there are 38 states which accept FHLB letters of credit including our border states of South Carolina, North Carolina and Florida. Georgia and Alabama are the only two states in the Atlanta FHLB region that do not accept this form of collateral. By policy of the Federal Home Loan Bank Board, the cost of the letter of credit is 5 basis points of the total value of the letter. The bill has been reported out of committee and will be considered by the full House on Monday, April 7.
The House Banks and Banking Committee has reported out S.B. 78, the annual housekeeping bill from the Georgia Department of Banking and Finance. The most significant feature affecting banks is the ability for banks to adopt an LLC corporate structure. Another provision synchronizes the definition of an ATM with the federal definition that does not treat an ATM as a branch. The bill should be up for consideration in the House soon.
H.B. 506 was passed by the House this week. The bill creates a new procedure by which manufactured houses may be converted from personal property to real property and vice versa. Some of our members have been making loans for manufactured houses and selling these loans to entities like Freddie Mac. Due to the underwriting guidelines and recent interpretations, the lenders have had to repurchase these loans due to the historic treatment of manufactured houses as personal property. The bill creates a procedure to record with the Superior Court Clerk, a Certificate of Permanent Location or a Certificate of Removal from Permanent Location. The first type of certificate would cause the home to be converted to real property. The second type of certificate would cause the home to once again become personal property. The certificates would be noted in the county records as well on the central index system maintained by the Superior Court Clerks Cooperative Authority. The bill also could affect the tax treatment of manufactured houses by local taxing jurisdictions.
GBA Keeps You Informed
GBA’s Legislative Update is intended to keep you apprised of the bills that the GBA is tracking on the industry’s behalf. Subsequent issues will be sent on alternate Fridays except when the legislature is in recess. On Fridays that the Update is not sent, GBA’s LegisFAX will be sent via fax to all CEO’s and those interested in tracking issues on a weekly basis. The electronic version of both the Legislative Update and the LegisFAX will be sent by e-mail to those on our e-mail list. The ‘State Issues’ section of GBA Online, GBA’s home page, 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.
GBA’s Lobbyists at the Capitol
The lobbying team for the GBA will be at the Capitol full-time throughout the session. If you need to get in touch with any of them on a particular issue, several ways are available. Call the main number at the GBA, (404) 522-1501, or leave a message on their direct voice mail, or send them an e-mail. They will get back to you at the earliest opportunity.
Joe
Brannen, Direct phone, (404) 420-2026
Elizabeth
Chandler, Direct phone, (404) 420-2027
Don Browne,
Direct phone,
(404) 522-1501
State Legislative Issues l Georgia House of Representatives l Georgia Senate