STATE GOVERNMENT RELATIONS
Indiana General Assembly Heads Into Final Month
As the calendar flips to the month of April, the Indiana General Assembly has moved one week closer to the conclusion of the 2021 legislative session. Lawmakers now have less than three weeks to finalize and pass any remaining legislative proposals by the newly established end date of April 21. Multiple bills the IBA Government Relations team has been working on saw action this week. Notably, three Senate bills – 370, 383 and 400 – all received votes this week, with details provided below.
Click here for a complete list of bills that the IBA Government Relations Team is tracking in the 2021 Indiana General Assembly.
Senate Bill 188 – Revised Uniform Unclaimed Property Act
Author: Sen. Eric Koch (R)
Summary of legislation: Repeals the Unclaimed Property Act and replaces it with the Revised Unclaimed Property Act. Makes conforming amendments.
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 time frames set forth in the statute.
Senate Bill 383 – Tax Matters
Author: Sen. Travis Holdman (R)
Summary of legislation: Requires a corporation with gross income of more than $1 million to file its corporate income tax return in an electronic manner specified by the Department of State Revenue (DOR). Provides a sales tax exemption for a utility scale battery energy storage system. Provides a sales tax exemption for public safety equipment and materials. Provides certain procedures for reporting federal partnership audit adjustments for purposes of the state Adjusted Gross Income Tax and Financial Institutions Tax in order to conform with changes in federal law. Provides that the DOR may prescribe procedures: (1) by which a pass through entity remits tax; (2) for persons or entities that are otherwise subject to withholding but that may have circumstances such that standard tax computation may result in excess withholding; (3) for individuals and trusts that are residents for part of the taxable year and nonresidents for part of the taxable year; and (4) by which an entity may request alternative withholding arrangements. Requires the daily pari-mutuel breakage on wagers to be paid to the department, instead of the auditor of state, for deposit in the appropriate breed development fund. Requires a utility provider to maintain records sufficient to document each one to one meter change. Allows a person to request that the department reissue an exemption certificate with a new meter number in the event of a one-to-one meter change. Removes duplicate provisions regarding electronic filing requirements for sales tax and withholding tax remittance. Removes certain unnecessary information currently required for employer withholding tax reporting forms. Specifies that the penalty provisions in current law for failure to make a payment by electronic funds transfer also apply to a failure to make a payment by any other electronic means. Clarifies that an individual’s estimated income tax filing and payment requirements include local income taxes. Clarifies the penalty calculation for failure to make estimated tax payments, including estimated utility receipts tax and financial institutions tax payments. Provides that a taxpayer may elect to claim a tax credit against the taxpayer’s Indiana adjusted gross income tax liability for the amount of tax that is imposed in a foreign country, but not due from the taxpayer under the laws of that foreign country until a tax year after the tax year in which the income subject to the foreign country’s tax is included in the taxpayer’s Indiana adjusted gross income (provides for retroactive application to tax years beginning after Dec. 31, 2016). Sets a floor on the periodic change in the gasoline tax and the special fuel tax rates each year of not less than the rates in the preceding year. Provides that the fee to register a trailer that is registered under the International Registration Plan (IRP) shall be prorated based on the Indiana mileage percentage of the registrant’s trucks and tractors registered under the IRP. Allows the department to release the name and business address of a person that is issued a retail merchant’s certificate for the purpose of reporting the status of the person’s certificate. Provides that the provision in current law requiring an out-of-state merchant to collect sales tax on retail transactions made in Indiana if certain threshold conditions are met extends to the following: (1) the waste tire management fee; (2) the fireworks public safety fee.; and (3) the prepaid wireless service charge. Provides that the township trustee shall serve as an ex officio member of the township board for the purpose of casting the deciding vote to break a tie vote on the adoption of a township’s budget and tax levies. Delays the expiration of provisions providing that a local income tax council for a county with a single voting bloc must vote as a whole in order to exercise its authority to increase (but not decrease) a local income tax rate in the county. Increases the amount the commissioner of workforce development shall release each year to Vincennes University for training provided to apprenticeship programs approved by the U.S. Department of Labor, Bureau of Apprenticeship and Training, from $1 million to $4 million. Provides that a taxpayer who received unemployment compensation in the taxable year 2020 is entitled to a state income tax deduction equal to the lesser of: (1) the amount of the unemployment compensation that is excluded from the taxpayer’s federal gross income under the recently passed American Rescue Plan Act of 2021 (ARPA); or (2) $10,200 (which is the cap on the federal exclusion amount under that act). Requires the Office of Management and Budget to report on actual and proposed uses of ARPA funds. Requires the governor to annually make a proposal concerning the disposition of excess state reserves and ARPA funds to the state budget committee and the General Assembly. Makes technical corrections.
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 bureau 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 bureau 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 BMV under these provisions. Authorizes the bureau to adopt rules, including emergency rules, to implement these provisions.
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!
Supreme Court Ruling Protects Banks’ Ability to Contact Customers
In a significant win for bank customers, the Supreme Court Thursday confirmed that customers can receive important communications from their banks and other companies with whom they do business. The court issued its highly anticipated opinion in the case of Facebook v. Duguid—which addresses the definition of “automatic telephone dialing system,” commonly known as an “autodialer,” under the Telephone Consumer Protection Act.
In the decision—which reversed that of a lower court—the Supreme Court offered a narrow interpretation of the definition of autodialer. To qualify as an autodialer, “a device must have the capacity either to store a telephone number using a random or sequential number generator or to produce a telephone number using a random or sequential number generator,” the opinion said. This decision will enable banks to deliver routine, informational communications to their customers including low-balance alerts, fraud warnings and other time-sensitive calls with substantially less risk of liability under the TCPA.
Read the Supreme Court's opinion
President Biden Signs PPP Extension Bill; Extends Program Through May 31
President Biden has signed into law H.R. 1799, a bill extending the Small Business Administration’s Paycheck Protection Program. The PPP Extension Act allows loan applications to the program – which had been set to expire March 31 – for two more months and gives SBA 30 additional days to process loan applications made by the new May 31 deadline.
SBA Issues New Procedural Notice for Hold and Error Codes
The Small Business Administration has issued a new procedural notice that outlines a process for PPP lenders to clear hold codes and error messages. In summary, the notice provides clarification on the written certifications that are needed by borrowers to clear the messages. Per the new procedural notice, lenders can resolve certain hold codes and error messages “by obtaining a written borrower certification along with supporting documentation of the type identified for each Hold Code or Compliance Check Error Message in the First Revised Hold Code Notice.” Lenders can execute the updated certification within the platform.
The SBA indicated that it will also deploy a machine learning model that will automatically process first-draw applications with minimal risk, and the SBA will remove error messages that indicate a disqualifying criminal history or delinquent/defaulted federal student loan.
Federal Eviction Moratorium Extended to June 30
As the coronavirus pandemic persists, the Centers for Disease Control and Prevention announced that the federal eviction moratorium has been extended through June 30. The Consumer Financial Protection Bureau and the Securities and Exchange Commission issued a joint statement stating that they “will be monitoring and investigating eviction practices, particularly by major multistate landlords, eviction management services, and private equity firms, to ensure that they are complying with the law.”
IRS: EIPs to Start Reaching Social Security Recipients, Non-Tax Filers This Weekend
The Internal Revenue Service has reported that it expects to begin issuing economic impact payments this weekend to Social Security recipients and others who do not normally file a tax return.
The IRS said that a majority of the payments will be sent electronically through direct deposits and payments to existing Direct Express cards, and a majority will be sent by April 7. The IRS added that its Get My Payment tool for consumers to check the status of their EIPs will not be updated until the weekend of April 3.
ARRC Outlines Approach for Using SOFR in New Issuances of Securitized Products
With the publication of all tenors of London Interbank Offered Rate set to cease after June 30, 2023, the Alternative Reference Rates Committee has outlined a model for using the Secured Overnight Financing Rate – the ARRC’s preferred Libor alternative – in asset-backed securities products, including non-collateralized loan obligation asset-backed securities, mortgage-backed securities and commercial mortgage-backed securities products.
In a white paper, the ARRC outlines how new issuance of ABS products could use 30-day average SOFR, with a monthly reset, set in advance of the interest accrual period. This methodology – which was developed by the ARRC’s Securitization Working Group – uses the actual SOFR rates from the 30-day period before the applicable reset date, which the ARRC determined to be preferable to the alternatives for operational ease.
“The SWG believes that the use of 30-day average SOFR aligns well with current market practices and will meet market participants’ expectations for a vibrant and well-functioning market for the foreseeable future,” the ARRC wrote. The paper also noted that “although this paper sets forth one option for how ABS, MBS, and CMBS products could use 30-day average SOFR, market participants may select appropriate adjustments to the methodologies described herein in connection with any particular ABS issuance based on the unique attributes of the collateral backing the applicable securitization as well as the desired terms of the related securities.”
The paper does not address how asset-backed securities products could use SOFR set in arrears, nor does it include considerations for how new issuance of corporate collateralized loan obligations could use SOFR.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.