IBA E-News 3-31-17


Deadlines Approaching Next Week for General Assembly
The General Assembly has concluded the final full week of committee hearings with a packed schedule of bill hearings. Legislators are moving at full speed before next week’s deadlines for committee reports, second readings and third readings. Due to the impending deadlines, there has been a significant increase in amendments to bills in committee, as members move to try to keep legislative initiatives alive. The IBA GR Team has been monitoring activity; please note legislative changes to the bills listed below:

HB 1407 – Probate and Trust Matters
Author: Rep. Thomas Washburne, R-Inglefield
Sponsor: Sen. Rodric Bray, R-Martinsville

Bill summary:
This bill makes various changes to probate and trust laws concerning contesting of wills, the size of unsupervised estates, authorization of certain acts by a trustee, and the consideration of the requests of de facto custodians and living parents of incapacitated persons in the appointment of guardians and in custody orders.

What happens next: The bill, sponsored by Sen. Rodric Bray (R-Martinsville), was heard in the Senate Judiciary Committee on March 15. The committee took testimony, but decided to hold the bill. The bill was brought back to the Senate Judiciary Committee to amend and vote on Wednesday, March 29. Among the amendments was a clarification that enables trustees to deliver trust information through electronic means. The bill is now eligible for second reading amendments.

SB 196 – School Debt Service Obligations
Author: Sen. Luke Kenley, R-Noblesville
Sponsor: Rep. Timothy Brown, R-Crawfordsville

Bill summary:
This bill amends the definition of “debt service obligations” used for purposes of the statute concerning the Department of Local Government Finance review of school corporation bond and lease rental property tax levies.

What happens next: The bill was heard in the House Ways and Means Committee on March 16. The IBA testified in SUPPORT of the bill. The bill will be voted on in committee on Monday, April 3.

SB 310 – Land Banks
Author: Sen. Brandt Hershman, R-Buck Creek
Sponsor: Rep. Heath VanNatter, R-Kokomo

Bill summary: County Options: The bill allows a county fiscal body to adopt an ordinance authorizing a deduction for property transferred from a land bank. It also allows a county fiscal body to adopt an ordinance authorizing the allocation of property tax revenue collected with respect to transferred properties to the transferring entities.
Third-Class Cities: The bill authorizes a third-class city to which the unsafe building law applies to establish a land bank to manage and improve the marketability of distressed real property in the city. It establishes memberships on the land bank board of a third-class city.
Landbank Funding: The bill was amended in The House Government and Regulatory Reform Committee to include a 5 percent penalty on the total amount of taxes owed that is to be remitted to the landbank to help pay for the municipal landbank program. 

What happens next: The bill passed the Senate on third reading 48-0. The House sponsor is Rep. Heath VanNatter. The bill was heard and amended in in the House Government and Regulatory Reform Committee on March 21. The bill was amended on second reading in the House to remove the additional 5 percent penalty for late property taxpayers.

SB 455 – Tax Administration of Mobile Homes
Author: Sen. Randy Head, R-Logansport
Sponsor: Rep. Karen Engleman, R-Georgetown

Bill summary: The bill establishes an optional procedure by which a county treasurer may sell a mobile home assessed as personal property at auction to the highest bidder, in order to satisfy the amount owed by the owner for delinquent personal property taxes, penalties and collection expenses attributable to the mobile home. The bill requires that notice of a tax sale proceeding be sent to lienholders that each year ask for a notice.

What happens next: The bill was heard in the House Ways and Means Committee on March 15, and was amended and voted out of committee on March 28. The committee amendment: (1) placed lienholders in the waterfall of proceeds upon a sale, and (2) narrowed the definition of substantial property interest to BMV records.

SB 505 – County Recorder Matters
Author: Sen. Rodric Bray, R-Martinsville
Sponsor: Rep. Denny Zent, R-Angola

Bill summary: The bill amends the amounts and distribution of recording fees.
Bulk Form Copies: It allows a maximum fee set by ordinance for providing bulk form copies of 10 cents (instead of 7 cents) per page. It also allows overhead costs to be included in the “actual cost” charged by the recorder for bulk form copies. The bill requires a contract with the county recorder as a prerequisite to receiving bulk form copies, and it allows a county recorder to terminate a contract and refuse to provide bulk form copies to a person, including a commercial entity that has had a previous contract terminated by the county recorder.
Electronic Records: The bill adds the Uniform Real Property Electronic Recording Act that provides, effective Jan. 1, 2018, that for purposes of recording: (1) an electronic document satisfies any legal requirement for an original paper document or other medium; and (2) an electronic signature satisfies a legal requirement that a document must be signed, notarized, acknowledged or verified.
Commission: The bill creates the Electronic Recording Commission to adopt standards before Jan. 1, 2018, to implement the Uniform Real Property Electronic Recording Act.
Recording Fee: The bill changes the charges for recording documents to a flat-rate fee based on the type of document instead of a per-page fee based on the page size. The current bill establishes a $55 fee to record a mortgage document. 

What happens next: The bill passed the Senate on third reading 45-4. The bill was heard in the House Local Government Committee on March 23 and was passed out of committee 12-0. The bill was amended on second reading in the House to clarify bulk user language, and now moves on to a third reading vote before the House.

SB 539 – Notaries Public and Trademarks
Author: Sen. Rodric Bray, R-Martinsville
Sponsor: Rep. Martin Carbaugh, R-Fort Wayne

Bill summary: The bill provides that a person who wishes to register a trademark must file an electronic application for the registration of the trademark. This bill allows the governor to appoint notaries public in certain instances. It also describes permitted notarial acts. The bill provides that notarial acts performed in another state are presumptively valid in certain instances. It also provides that notarial acts performed: (1) under the authority of; and (2) within the jurisdiction of; a federally recognized tribe are presumptively valid in certain instances. This bill also provides that notarial acts performed by foreign governments or nations are presumptively valid in certain instances. It specifies how records should be notarized.

This bill specifies how the identity of a principal may be authenticated. The bill specifies the components of notary seals. It requires that notary stamping devices must be secured. It also prohibits the use of a stamping device by any person other than the authorized notary public. The bill also describes how stamping devices must be disposed of when a notary public's commission ends. This bill also describes eligibility requirements for a notary public. The bill requires a notary public to secure an assurance or surety in the amount of $25,000. The bill specifies acts that a notary public is prohibited from taking. It prohibits a notary public from engaging in false or misleading advertising. The bill also allows a notary public to charge not more than $10 for certain notarial acts. It allows a notary public to charge for travel expenses.

This bill allows the Secretary of State to attest to the authenticity of a signature of a public official. It also prohibits the Secretary of State from attesting to the signature of a public official or notary public on a document: (1) declaring allegiance to a government or jurisdiction; (2) renouncing citizenship, military status, sovereignty or world service authority; or (3) claiming immunity from the jurisdiction or laws of the United States or any state of the United States.

All remote notary language was removed in the Senate Judiciary Committee.

What happens next: The bill passed out of the Senate 44-3. The bill’s original sponsor, Rep. Thomas Washburne (R-Inglefield), was removed, and Rep. Martin Carbaugh (R-Fort Wayne) was added as the primary House sponsor. The bill passed the House Judiciary Committee unamended and likewise was not amended in the House on second reading. The bill passed out of the House 85-4.




House Ag Committee Holds Hearing on Farm Credit Oversight
Lawmakers echoed bankers’ concerns about “mission creep” by the government-sponsored Farm Credit System in a House Agriculture Committee hearing on Wednesday on the system’s performance and overall safety and soundness.

“My rural community bankers, they’re not happy” about Farm Credit System participation in loans to “similar entities” that appear to fall beyond the scope of FCS’ statutory lending authority, acknowledged Rep. Bob Gibbs (R-Ohio). According to the FCS representatives testifying before the committee, as well as Farm Credit Administration Chairman Dallas Tonsager, similar entity loans are allowed to make up 15 percent of an individual FCS bank’s total assets, and they account for roughly 3 percent of the system’s total assets. As Gibbs noted, however, “when you’re looking at the whole Farm Credit System, that’s still a lot of money.”

Farm Credit employees countered that they plan to continue pursuing opportunities to finance communications infrastructure projects in rural areas, such as those that provide wireless and broadband capabilities. “We’re doing a lot of that business. We’d like to do more,” said CoBank president and CEO Tom Halverson.

GOP Senators to Secretary Mnuchin: Review SIFI Designation for Non-Banks
Republican members of the Senate Banking Committee sent a letter on Tuesday to Treasury Secretary Steven Mnuchin, urging him to review the SIFI classification process for non-bank entities, as part of the president’s executive order examining financial regulations.

FHFA Releases Fannie, Freddie Progress Report
The Federal Housing Finance Agency on Wednesday released a progress report on its goals for Fannie Mae and Freddie Mac while the GSEs are in federal conservatorship. The report covers FHFA’s goals for the GSEs to maintain access to credit and help prevent foreclosures, reduce credit risk and build a common securitization platform that issues a single security.

To improve credit access, the agencies have revisited existing credit policies and guidance, provided additional outreach to underserved borrowers and extended the Home Affordable Refinance Programs through September 2017, among other initiatives. Fannie and Freddie also maintained their risk transfer programs to reduce overall taxpayer liability, and both met their goals for transferring credit risk for single-family mortgage loans.

Additionally the GSEs made progress toward building the common securitization platform, with successful completion of Release 1 in December, which allowed Freddie Mac to use the platform to issue its current securities. Release 2 is currently scheduled for the second quarter of 2019, and will allow both GSEs to issue their own securities, as well as Single Securities.

Posted 3-13-17