IBA E-News 4-7-17
STATE GOVERNMENT RELATIONS NEWS
Third Reading Deadlines Pass
This week the Indiana General Assembly completed third reading deadline in both Chambers. Now that eligible bills have been heard in both houses, the “living bills” will be returned to their chambers of origin for concurrence or dissent. When a legislator dissents on a bill, the bill will move to conference committee to reconcile the House and Senate-passed versions of the bill. The IBA GR Team will monitor this process closely over the next two weeks for issues that could impact the industry.
Bill summary: This bill provides the following for purposes of the school bond payment intercept statute:
(1) the term "debt service obligations" also includes principal and interest payable to a school corporation's designated paying agent under a written agreement entered into in connection with the issuance of a school corporation's general obligation bonds;
(2) upon being notified of a school corporation's failure to pay debt service obligations when due, the treasurer of state shall within five days pay the unpaid debt service obligations that are due from state funds, in an amount equal to the amount of the unpaid debt service obligations that are due to the claimant (but only to the extent that amounts are available to the treasurer of state to fulfill this requirement);
(3) the treasurer of state shall provide notice of the request by a claimant to the budget director, the auditor of state, and any department or agency of the state responsible for distributing funds appropriated by the General Assembly for distribution to the school corporation from state funds, and such a department or agency of the state shall transfer those funds to the treasurer of state for purposes of paying the unpaid debt service obligations;
(4) the amounts made available to the treasurer of state for this purpose shall be made from the following sources and in the following order of priority: (A) first, from amounts appropriated by the General Assembly for the state fiscal year for distribution to the school corporation from state funds; and (B) second, from any remaining amounts appropriated by the General Assembly for distribution.
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 passed the House on third reading on April 6 by a vote of 96-0.
SB 567 – Gary Schools and the Distressed Unit Appeal Board
Author: Sen. Luke Kenley, R-Noblesville
Sponsor: Rep. Timothy Brown, R-Crawfordsville
Bill summary: This bill has the following provisions:
Distressed Political Subdivision: The bill designates the Gary Community School Corp. and Muncie Community Schools (school corporations) as distressed political subdivisions subject to control by the Distressed Unit Appeal Board (DUAB).
DUAB Membership: The bill changes the membership of the DUAB by replacing the voting member who is appointed by the chairperson of the Legislative Council with a member appointed by the Governor and adding three nonvoting legislative members. It adds and modifies the duties and powers of the DUAB.
Petitions: The bill authorizes the treasurer of state to file a petition with the DUAB to have a school corporation designated as distressed unit, if the treasurer of state has reason to believe that the school corporation will not be able to pay the school corporation's debt service obligations as those debt service obligations become due. It allows the Indiana Education Employment Relations Board (IEERB) to petition the DUAB to consider a school corporation for designation as distressed and requires notice to the IEERB when a school corporation is designated as distressed.
Duties of Emergency Manager: The bill adds, removes, modifies and rearranges the duties and powers of an emergency manager regarding all political subdivisions and makes certain changes with regard to a distressed school corporation, including the employment of a chief financial officer and a chief academic officer by the emergency manager. It requires various reports.
What happens next: The bill was amended in committee to include Muncie schools. The bill was then voted out of the House Ways and Means Committee. The bill was passed by the House on April 6 by a vote of 77-19.
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 March 29. Among the amendments was a clarification that enables trustees to deliver trust information through electronic means. The bill passed the Senate 48-0.
FEDERAL GOVERNMENT RELATIONS NEWS
Hensarling Calls for CFPB Director’s Ouster
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) called on President Donald Trump to dismiss Consumer Financial Protection Bureau Director Richard Cordray. At a hearing on the CFPB’s semi-annual report to Congress, Hensarling said Trump is justified in firing Cordray and should do so “immediately.”
The plea comes amid an ongoing legal challenge to the constitutionality of the CFPB’s governance structure in PHH v. CFPB. A U.S. appellate court has granted the CFPB’s request to rehear the case after a three-judge panel previously struck down a provision in the Dodd-Frank Act barring the president from dismissing the CFPB director without cause.
Attorneys for PHH and the CFPB will face off in oral arguments before the court on May 24. Cordray’s term as CFPB director expires in July 2018.
Streamlined Call Report Available for April 30 Due Date
The Federal Deposit Insurance Corp. released materials for the March 31 call report, which is due Sunday, April 30. The updated materials include the new FFIEC 051 call report, which is reduced from 85 to 61 pages for more than 5,200 institutions with less than $1 billion in assets. The updated report also excludes approximately 40 percent of the nearly 2,400 data items included in the regular quarterly report.
Lawmakers Introduce Bipartisan Bills Targeting PACE Loans
Sens. Tom Cotton (R-AR), Marco Rubio (R-FL) and John Boozman (R-AR) and Reps. Brad Sherman (D-CA) and Ed Royce (R-CA) on Wednesday introduced legislation requiring more consumer disclosures for Property Assessed Clean Energy loans, a controversial financial product that allows homeowners to pay for energy-efficient retrofitting -- such as solar panels and high-efficiency air conditioners -- through their property tax assessments.
The bill would subject PACE loan originators and sales personnel to Truth in Lending Act requirements, enhancing pre-origination disclosures of total loan amounts and loan terms and bringing the loans explicitly under the oversight of the Consumer Financial Protection Bureau.
More than 30 states allow PACE loans, which may take a first-lien position over the primary mortgage on a residence. For this reason, the Federal Housing Finance Agency has blocked Fannie Mae and Freddie Mac from buying mortgages for homes with outstanding first-lien PACE loans, limiting home sale options for PACE borrowers and potentially harming borrowers and lenders who rely on the certainty of the first-lien position on mortgages for affordable financing.