March 7, 2008  

Crossover Day Next Week - Rules Committee Players
Representative Earl Ehrhart The General Assembly will go back in session next Tuesday for what is usually their second busiest day of the session:  Crossover Day.  The 30th day is the day by which a bill must have passed at least either the House or Senate in order to be considered by the other body.  The House and Senate Rules Committees have the enormous task of sorting through the dozens of bills that have been reported out of other committees and are awaiting their fate.  The busiest day of each Session:  the last day – which often adjourns just before midnight.  The House and Senate Rules Committees are chaired by two well-known and respected legislators.    In the House, the committee is chaired by Rep. Earl Ehrhart (R-Powder Springs), a member of the House since 1989.  The Vice Chairman is Butch Parrish (R-Swainsboro) and the Secretary is James Mills  (R-Gainesville) who also chairs the House Banks and Banking Committee.  Parrish is a former chairman of this committee.  In the Senate, the committee is chaired by Sen. Don Balfour (R-Snellville), a member of the Senate since 1992.  The Vice Chairman is Sen. Bill Hamrick who also chairs the Senate banking committee and the Secretary is Sen. Mitch Seabaugh (R-Sharpsburg).

Speaker's GREAT Plan Killed in House
The House of Representatives failed by a close margin to pass Speaker of the House Glenn Richardson’s bill that would reduce certain ad valorem taxes.  The Speaker had continued to change the scope of his bill in the last few weeks, and this week abandoned the effort to shift from an ad valorem school tax to a 4% statewide sales tax.  Many of our members had expressed concern about the new burden being placed on them to assess, collect and remit the new sales tax on services.  Many other industry groups’ members had given the same kind of feedback.  The final bill the Speaker asked the House to consider would have phased in and eliminated the ad valorem tax on automobiles and create a mechanism to help fund a new   trauma network.  His bill also would have capped the growth of local government spending.  As the concept required a constitutional amendment, the bill needed to pass by a two-thirds majority.  However, it was just 10 votes shy, so apparently the issue is dead for the session.  Speaker Richardson’s plan was popular among property owners, but local government officials continued their opposition throughout the process.

Three Foreclosure Bills Reported/Pending in Senate Rules Committee
The Senate Banking and Financial Institutions Committee met this week and reported three bills that would change the foreclosure process.  Chairman Bill Hamrick (R-Carrollton) was the principal author on one bill, S.B. 519, that as originally introduced, would have required a two-week notice prior to the four-week advertising of foreclosure sales.  The committee reported a substitute which was intended to make the notice contemporaneous with the advertisements, but give lenders the option of sending the notice up to 30 days prior to the advertisements beginning.  There is some question the language in the bill accomplishes that, and we will continue to work with Chairman Hamrick and others to help perfect the bill.  The committee also reported a substitute for S.B. 465 by Sen. Emanuel Jones (D-Ellenwood) that extends the notice of foreclosure period to 90 days.  The substitute would extend the longer notice to only high-cost loans made under the Georgia Fair Lending Act.  Perhaps the most sweeping bill reported from committee was S.B. 531 which was also primarily authored by Chairman Hamrick.  This bill requires an advertisement of foreclosure to include the name of the security holder   as well as the name and contact information for the servicer. Representatives from Atlanta Legal Aid and others testified in support of the bill and said without having the name of the security interest holder, they had difficulty working out repayment plans or loan modifications with servicers.  The Mortgage Bankers Association testified and reported current industry practice was for servicers to be empowered to handle loan modifications.  There was also concern expressed about language in the bill that prevents foreclosures unless loan assignments had been recorded in the deed records, apparently not current industry practice.  A substitute bill would have eliminated those provisions, but a vote was taken on the original bill and it passed out of committee unanimously.  All the bills have now been sent to the Senate Rules Committee which will determine whether they will go further.
Appraisal Bill Passed Senate   House Passes REIT Bill
S.B. 496 has passed by the Senate.  The bill was introduced by Sen. Horacena Tate (D-Atlanta) and others and 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.  

H.B. 447 by Rep. Larry O'Neal (R-Warner Robins) passed the House this week.  The legislation is intended to clarify state conformity with the federal treatment of dividends received from real estate investment trusts and regulated investment companies.  The bill provides for an addition to federal taxable income for any amount deducted to the extent it is attributable to a dividend received directly or indirectly from a real estate investment trust or a regulated investment company.  While the intent of the legislation is to close a loophole that allows some companies to escape legitimate taxes on their property, the bill could have unintended consequences on bank-sponsored REITs that are created for purposes such as capital planning.  We will share those concerns as the Legislature continues consideration of this bill.

Committee Reports File Freeze Bill

   Wire Transfer Bill Reported

The House Banks and Banking Committee reported a bill this week which would allow consumers to place security freezes on their credit reports.  S.B. 361 by Sen. Chip Rogers (R- Woodstock) testified in support of his legislation.  He discussed one difference in this bill from a similar bill which already passed the House, H.B. 130, that imposes a $3.00 cap on the fee.  Sen. Rogers’ bill allows a reasonable fee to be charged, but not greater than the cost as determined by the Banking Commissioner.  The House-passed bill is still in Senate committee.

   Representative Tom RiceThe House Ways and Committee reported a bill this week by Rep. Tom Rice (R-Peachtree Corners) that will require certain issuers of international wire transfers to collect an additional 2% fee on each wire.  As we have previously reported, Rep. Rice presented a substitute that would have included our members, but the subcommittee chose to defer action on the bill, H.B. 1028. Rep. Rice agreed to remove financial institutions from his substitute which addressed the concerns of several committee members who then supported reporting the bill. 

Inspector Licensing Bill Passes

   Mortgage Satisfaction Bill on Tap

S.B. 485 by Sen. John Wiles (R-Marietta) and others passed the Senate this week.  The bill creates 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.

  

Next Tuesday, the full House will consider legislation sponsored at GBA's request by Judiciary Committee Chairman Wendell Willard (R-Sandy Springs) dealing with mortgage satisfactions.  The bill, H.B. 1093, clarifies the notification provisions for liquidated damages resulting from the failure to cancel a security deed within the current 60 day period.  The bill addresses the underlying problems we are resolving which have resulted in nine class action law suits. 
Infrastructure Bank Bill Passed   Watercraft Titling Bill Passes

The House has passed H.B. 1019 by Rep. John Lunsford (R-McDonough) and others, legislation introduced at the request of Governor Sonny Perdue.  The bill establishes an infrastructure bank to fund local transportation projects through a revolving loan fund.  Many other states have similar state-sponsored infrastructure facilities which have proven useful in expediting the construction of transportation projects ahead of receiving funding through federal grants or waiting for state funding.

 

Representative John HeardThe House has passed H.B. 1000 by Rep. John Heard (R-Lawrenceville) and others that would create a new titling procedure for certain watercraft.  Rep. Heard, a boat dealer, has emphasized the importance of having a better tracking procedure for motorized watercraft and we appreciate his efforts.  The bill was has been amended several times in committee to address concerns with the number of boats requiring a title and certain fees which will be charged to title the watercraft.

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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