STATE GOVERNMENT RELATIONS
Indiana General Assembly Work Picks Up
This week saw an uptick in legislative work as the Indiana General Assembly pushes through the second half of the 2021 legislative session. Two bills important to the banking industry saw significant action this week with SB 370, Limitation on Actions Concerning Deposit Accounts, and SB 400, Electronic Lien and Title System, both passing their respective chambers on third-reading votes.
Click here for a complete list of bills that the IBA Government Relations Team is tracking in the 2021 Indiana General Assembly.
Senate Bill 370 – Limitation on Actions Concerning Deposit Accounts
Author: Sen. Andy Zay (R)
Summary of legislation: Limitation on actions concerning deposit accounts. Amends the statute concerning the statute of limitations for actions upon promissory notes, bills of exchange or other written contracts for the payment of money to include actions upon deposit accounts. Specifies that the bill’s provisions are intended to be a restatement of the law and not a substantive change in the law and as such shall be applied with respect to deposit accounts executed during the applicable timeframes set forth in the statute.
Senate Bill 400 – Statewide Electronic Lien and Title System
Author: Sen. Chris Garten (R)
Summary of legislation: Statewide electronic lien and title system. Requires the Bureau of Motor Vehicles to implement a statewide electronic lien and title system to process: (1) vehicle titles; (2) certificate of title data in which a lien is notated; and (3) the notification, maintenance and release of security interests in vehicles; through electronic means instead of paper documents. Provides that the BMV may: (1) contract with one or more qualified vendors to develop and implement a system; or (2) develop an interface to provide qualified electronic lien service providers secure access to data to facilitate the creation of a system. Sets forth certain requirements that apply if the BMV elects to implement the system through a qualified vendor versus through qualified electronic lien service providers. Specifies that a contract entered into between the BMV and: (1) a qualified vendor; or (2) a qualified electronic lien service provider; may not provide for any costs or charges payable by the bureau to the qualified vendor or the qualified electronic lien service provider. Sets forth dates by which the BMV must implement and allow or require the use of: (1) a statewide electronic lien system; and (2) a statewide electronic title system. Sets forth certain conditions that apply to the use of a statewide electronic lien system implemented by the bureau under these provisions. Authorizes the BMV to adopt rules, including emergency rules, to implement these provisions.
House Bill 1004 – Small Business Restart Grant Program
Author: Rep. Shane Lindauer (R)
Summary of legislation: Small business restart grant program. Establishes the Hoosier Hospitality Small Business Restart Grant Program to provide grants to eligible entities to accelerate economic recovery from the impacts of the COVID-19 pandemic. Establishes the Small Business Restart Grant Fund. Provides that the Indiana Economic Development Corporation administers the program and fund. Provides that the Indiana Economic Development Corporation administers the program and fund. Provides criteria for grants. Allows the IEDC to award grants from the fund. Makes an appropriation.
House Bill 1079 – Practice of Dentistry; Virtual Claims Payments
Author: Rep. Dennis Zent (R)
Summary of legislation: Practice of dentistry; virtual claim payments. Amends the definition of dentistry. Provides that a dentist may order and administer an immunization that is recommended by the federal Centers for Disease Control and Prevention Advisory Committee on Immunization Practices for individuals who are not less than 11 years of age, if the dentist: (1) is certified in cardiopulmonary resuscitation; (2) has successfully completed a course of training in immunization that meets specified requirements; and (3) administers the immunization in accordance with a protocol that includes specified requirements and procedures. Prescribes reporting requirements for a dentist who administers an immunization. Provides that a dentist: (1) is not required to administer immunizations; and (2) is not required to complete immunization training if the dentist chooses not to administer immunizations. Provides that a health insurance plan, including a health management organization contract, may not require a dental provider to accept payment under the health insurance plan by virtual claim payment. Requires a health insurer, including a health maintenance organization, to do the following before providing payment to a dental provider by electronic funds transfer, including by virtual claim payment: (1) notify the dental provider of fees associated with the electronic funds transfer; (2) advise, concerning virtual claim payments, the dental provider of the methods of payment available under the health insurance plan and provide clear instructions to the dental provider as to how to select an alternate payment method.
Senate Bill 345 – Sale of Bonds at a Negotiated Sale
Author: Sen. Eric Bassler (R)
Summary of legislation: Extends the sunset date for provisions that permit certain political subdivisions to sell bonds at a negotiated sale from July 1, 2021, to July 1, 2023, and includes all counties, cities, towns and school corporations under those provisions. (Currently only a consolidated city, a second class city or a school corporation located in those cities are permitted to sell bonds at a negotiated sale.)
FLD Virtual Day at the Statehouse
Register now for the FLD Virtual Day at the Statehouse, scheduled for April 9. This is an opportunity for emerging bank leaders to network with peers and learn more about grassroots advocacy and the legislative process. If you have an interest in politics, or if you just want to do your part to promote the future success of the banking industry, register now to unlock your potential as an industry advocate.
FEDERAL GOVERNMENT RELATIONS
IBA Washington Trip - July 18-20
Register now for the IBA Annual Washington Trip, scheduled for July 18-20. Join with fellow Hoosiers as we travel to our nation’s capital to tell the story of Indiana banking to elected officials and regulators. This is an opportunity to discuss the impact legislation has had or may have on your bank, and how currently proposed policies could influence your customers and communities. It is more important now than ever to engage in grassroots advocacy as you share your concerns, your successes and what you believe will allow you to better serve your communities. We look forward to seeing you in Washington!
Registration Deadline Today for Federal Reserve Bank of St. Louis Briefing
The deadline to register is today, March 19, for the Federal Reserve Bank of St. Louis’ Louisville Zone Regional Economic Briefing. Taking place on March 23 from 9-10:30 a.m. ET, this free briefing is for business leaders, educators, community development practitioners and others interested in the economy. Two St. Louis Fed economists will give overviews of economic conditions. Kevin Kliesen, business economist and a research officer, will talk about national economic conditions. Charles Gascon, a senior coordinator in the research division, will give an overview of economic conditions in metro Louisville, southern Indiana and western Kentucky, including COVID-19's impact on the regional economy.
Temporary Supplementary Leverage Ratio Changes to Expire as Scheduled
The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on March 31, 2021. The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event.
SBA Issues Interim Final Rule Implementing PPP Changes
The Small Business Administration yesterday issued an interim final rule implementing changes to the Paycheck Protection Program that were included in the American Rescue Plan law enacted earlier this month. The IFR will take effect upon publication in the Federal Register.
Among other provisions, the IFR changes the interplay between the Shuttered Venue Operator Grant Program and the PPP. Under the IFR, borrowers who received a first- or second-draw PPP loan after Dec. 27, 2020, and have been subsequently approved for an SVO grant will have the SVO grant reduced by the amount of the PPP loan. If a PPP applicant is approved for an SVO grant before SBA issues a loan number for the PPP loan, the applicant is ineligible for the PPP loan, and acceptance of any PPP loan proceeds will be considered an unauthorized use.
In addition, the IFR makes several clarifications and changes, including:
- The addition of businesses with an NAICS code beginning with 72 that employ no more than 500 employees per physical location to the list of entities eligible for first-draw PPP loans.
- A clarification that electric cooperatives and telephone cooperatives are eligible if they have no more than 300 employees per physical location.
- A clarification that electric cooperatives and telephone cooperatives are no longer permitted to use the employee-based SBA size standard for their industry or SBA’s alternative size standard to determine size.
- Additional detail on the types of payroll costs that are not eligible for loan forgiveness.
New PPP FAQ, Implementation Aids and Data
The Small Business Administration has updated the Paycheck Protection Program Frequently Asked Questions and other implementation aides to reflect the March 3 interim final rule on Revisions to Loan Amount Calculation and Eligibility. As a reminder, the interim final rule allows individuals who file IRS Form 1040, Schedule C to calculate their maximum loan amounts using gross income.
- View Updated Frequently Asked Questions (Updated 3/12/21)
- How to Calculate Maximum Loan Amounts for First Draw PPP Loans and Documentation to Provide (Updated 3/12/21)
- Second Draw PPP Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts (Updated 3/12/21)
SBA also released new PPP data as of March 11 and released its most recent PPP weekly report as of March 14.
SBA Advises on PPP Updates
The Small Business Administration has advised that the Paycheck Protection Program platform has been enabled to accept Second Draw PPP Loan applications for borrowers who submitted their First Draw Loan applications during calendar year 2021. The platform previously had prevented borrowers from submitting a Second Draw Loan application if the borrower’s First Draw Loan had been made in 2021.
SBA also advised that, for a borrower to obtain a Second Draw Loan, the borrower’s First Draw Loan “must be fully disbursed and reflected as such within ETRAN. This process can occur naturally with the 1502 process or via direct updates in ETRAN if required.” The SBA reminded borrowers that the requirements to obtain a Second Draw Loan have not changed as part of this process. To be eligible for a Second Draw Loan, the borrower must (1) have received a First Draw PPP Loan; and (2) have used, or will use, the full amount of the First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan is disbursed to the borrower.
The SBA also advised that it is adding two additional organizational types to better support the Schedule C application process: “Single Member LLCs, and Qualified Joint-Venture (spouses), can be utilized when utilizing the Schedule C gross income PPP calculation.” The SBA indicated that the PPP Platform and ETRAN will be updated in the near future with these changes
IRS Issues EIP FAQ
Last Friday, the IRS announced that the third round of economic impact payments will begin reaching Americans over the next week, and that some direct deposit payments arrived over the weekend.
“Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of these payments will be by direct deposit,” the IRS said. “Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of March 17.”
The IRS added that it would update its Get My Payment tool for consumers to check the status of their EIPs starting on Monday. While individuals who have not filed a 2019 or 2020 tax return will be eligible to claim their EIPs on a newly filed tax return, the Get My Payment portal will only provide status updates for those who filed in 2019 or 2020 with direct deposit. The IRS also issued FAQs for consumers that cover EIP amounts, eligibility and payment status.
House Passes PPP Extension
The House voted 415-3 to pass legislation to extend the Paycheck Protection Program.
Introduced by Rep. Carolyn Bourdeaux (D-Ga.) and cosponsored by House Small Business Committee Chairwoman Nydia M. Velázquez (D-N.Y.) and Ranking Member Blaine Luetkemeyer (R-Mo.), the House-passed bill would allow borrowers to apply for loans through May 31 and give the Small Business Administration until June 30 to consider applications.
SBA Now Accepting Second-Draw PPP Applications From 2021 First-Draw Borrowers
The Small Business Administration is now accepting second-draw PPP loan applications from borrowers who previously submitted first-draw loan applications in calendar year 2021.
According to SBA, in order for these borrowers to receive a second-draw loan, their first-draw loan “must be fully disbursed and reflected as such within E-Tran. This process can occur naturally with the 1502 process or via direct updates in E-Tran if required,” the SBA said indicated. To be eligible for a second-draw loan, the borrower must have received a first-draw PPP loan and have used, or will use, the full amount of the first-draw PPP loan on or before the expected date on which the second-draw PPP loan is disbursed to the borrower.
SBA also added two additional organizational types – single-member LLCs and qualified joint-venture (spouses) – that can be used by borrowers when using the Schedule C gross income PPP calculation. SBA will update its PPP platform and the E-Tran system in the coming days to reflect these changes.
Guzman Confirmed as SBA Administrator
The Senate voted 81-17 to confirm Isabel Guzman as the next SBA of the Small Business Administration. Guzman previously served as director of the California Office of the Small Business Advocate.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.