With only a few days left before the official halfway point of the 2019 legislative session, all bills that would be eligible to be considered for the second half of session needed to pass on third reading in their chambers of origin by last Tuesday. This week of session marks a pivotal one for interested parties at the Statehouse.
The IMBA legislative team will be closely monitoring a couple of key pieces of legislation this week, with sights set toward the second half of session. Following are some notable bills:
BILLS OF IMPORTANCE
House Bill 1055 - Liens
Rep. Jerry Torr, R-Carmel
Summary of legislation: Permits a person to discharge a mechanic's lien by filing an indemnification or payment bond with the recorder's office in an amount equal to at least 150% of the lien. Requires the surety responsible for issuing an indemnification or payment bond to: (1) be authorized to do business in Indiana; and (2) be rated at least "A-" by at least one nationally recognized investment rating service. Specifies certain requirements concerning the recording of an indemnification or payment bond. Provides that the filing or deposit of a bond discharges the liability of a person served by a lien claimant not less than 30 days after the filing or deposit of a bond. Provides that a contractor or subcontractor may adjudicate the adequacy of a bond in certain instances. Provides that the liability of a person served by a lien claimant may not be discharged while the adequacy of a bond is being adjudicated. Repeals the current statute concerning the filing of an undertaking to discharge a lien. Urges the legislative council to assign to the appropriate interim study committee (committee) the topic of judgment liens. Provides that if the topic of judgment liens is assigned to the appropriate committee, the following topics will be addressed by the committee: (1) The feasibility of developing, preparing and implementing, before January 1, 2021, a plan, protocol or internet-based system concerning judgments and pending cases. (2) The feasibility of providing, before January 1, 2021, all necessary training and education to clerks of court regarding any plan, protocol or internet-based system concerning judgments or pending cases. (3) Any other issue or topic relevant to the development and implementation of any plan, protocol or internet-based system concerning judgments or pending cases. Makes conforming amendments.
What you need to know: The bill as proposed at the beginning of session made some significant changes to the way judgment liens were recorded, which the IMBA opposed. The amended bill sends the topic of judgement liens to a summer study committee to study further changes to statutes governing judgment liens. The IMBA supports a study of the matter rather than the original language in the bill.HB 1055 also puts into place a new mechanism for discharging a mechanic's lien.
Latest action: The bill passed the House Judiciary Committee by a vote of 10-0 and now awaits a vote by the entire House on third reading.
House Bill 1137 - Credit Services Organizations
Rep. Woody Burton, R-Whiteland
Summary of legislation: Amends the definition of "credit services organization" for purposes of the Indiana statute governing credit services organizations to more closely align the definition with the definition of "credit repair organization" set forth in the federal Credit Repair Organizations Act. Makes conforming amendments by: (1) amending the definition of "buyer" in the Indiana statute; (2) repealing the definition of "debt settlement services" from the statute; and (3) amending a definitions section in the statute governing debt management companies. Provides that it is a deceptive act for a credit services organization to fail to disclose the credit service organization's contact information on all communications to consumers, data furnishers, creditors, and credit reporting agencies. Specifies that a person that receives a communication from a credit services organization that does not include the credit services organization's contact information may bring a cause of action to recover damages under the statute.
What you need to know: This bill is identical to a bill from last year's session that died in the House. The original version of the bill had removed existing exemptions for lenders related to compliance with this statute. The IMBA worked to reinstate the exemptions removed in last year's legislation. The bill was heard in committee a second time last week and amended to add language to the deceptive acts list that requires credit services organizations to include their contact information on all communications to various parties.
Latest action: The bill passed the House Financial Institutions Committee by a vote of 5-4 and now awaits a vote by the full House on third reading.
House Bill 1625 - Housing Cost Information
Rep. Edward Clere, R-New Albany
Summary of legislation: Amends the statute concerning state rulemaking procedures to provide that if a state agency intends to adopt a rule that may increase or decrease the costs of housing in Indiana, the agency shall prepare a housing impact analysis (analysis) for the rule. Provides that: (1) the full text of the analysis must be published in the Indiana Register; and (2) the rule must be referenced in the required newspaper notice of the rule; under state rulemaking procedures. Requires a county or a municipality to prepare an analysis if a proposed regulation may increase or decrease the cost of housing in the county or municipality. Requires the analysis to be submitted to the members of the legislative body not less than 30 days before the legislative body considers the regulation. Sets forth the required information for an analysis prepared by a state agency or by a county or municipality. Requires the Indiana housing and community development authority (authority) to prepare a comprehensive five-year state housing strategy plan (plan). Sets forth required elements of the plan. Requires the authority to: (1) annually update the plan; and (2) submit the plan to the governor and the legislative council before October 1 of each year. Requires a municipality to annually prepare a housing fee report. Requires the municipality to post the report on the municipality's internet website (or on the county's internet website if the municipality does not maintain an internet website). Provides that a municipality may not impose any housing related fee that is not: (1) included in the fee report; or (2) posted on internet website the municipality's internet website.
What you need to know:The IMBA amended the bill to remove the requirement for local units to determine how financial considerations, such as interest rates and loan principal, might be impacted by local ordinances, since local units of government are not equipped to decide these issues.
Latest action: The bill passed the House by a vote of 52-47.
House Bill 1495 - Principal Dwelling Land Contracts
Rep. Vanessa Summers, D-Indianapolis
Summary of legislation: Principal dwelling land contracts. Defines "principal dwelling land contract" (contract) as a land contract for the sale of real property: (1) designed for the occupancy of one to four families; and (2) that is or will be occupied by the buyer as the buyer's principal dwelling. Provides that the seller under a contract must provide the buyer with the following at least 10 days before the contract is executed: (1) An FHA appraisal of the property. (2) A record of any liens encumbering the property. (3) A residential real estate disclosure form. (4) A lead-based paint disclosure form for real property constructed before 1978. (5) The annual percentage rate of the contract as determined under the federal Truth in Lending Act. (6) A statement of the buyer's potential legal rights. Sets forth disclosures that must be included in a contract. Requires all preexisting liens on the property to be satisfied by the seller by the end of the contract term. Provides that a contract must permit a buyer to pay the balance owed and receive the deed at any time. Prohibits prepayment penalties or additional charges for an early payoff. Provides a three-day cancellation period for both the buyer and seller. Requires the seller to record the contract within 30 days of execution. Allows the seller and the buyer to transfer their respective interests in the contract to other parties, subject to certain conditions. Requires the seller to provide the buyer with an annual
What you need to know: The IMBA amended the bill to ensure that these new regulations for land contracts aimed at the "rent to own" industry did not place additional burdens on the banking industry to the extent that they provide land contracts.
The bill passed the House Financial Institutions Committee by a vote of 8-0 and will now be considered by the entire House.
Senate Bill 265 - Various Trust Matters
Sen. Randall Head, R-Logansport
Summary of legislation: Defines "designated representative," "judicial proceeding" and "nonjudicial matter" for purposes of the trust code. Authorizes the establishment of legacy trusts. Prescribes the procedures for establishing a legacy trust and requirements for claims under a legacy trust. Provides that a court shall exercise jurisdiction over a legacy trust or a qualified disposition and adjudicate a case or controversy regarding the legacy trust, if the case or controversy is within the subject matter of the court. Adopts the Uniform Directed Trust Act, which allows for the terms of a trust to grant a person other than a trustee power over some aspect of the trust's administration. Provides that current law regarding the duties and liabilities of a trustee of a trust under the control of a third person applies to directions given to a trustee before July 1, 2019, by a person who has power under the terms of the trust to direct the trustee. Allows for the use of quiet trusts. Provides that an interested person may enter into a binding nonjudicial settlement agreement with respect to trust matters. Provides for nonjudicial account settlements.
What you need to know: The IMBA has worked extensively with Sen. Head to amend the bill to provide creditors with protections against trusts that would shield encumbered assets from creditors without notice. The bill ensures that assets on a financial statement used in securing loans could not be shielded by the trust, and creditors would still have access to them in the event of a default. Notice is also provided to creditors when assets are placed into this self-settled trust.
Latest action: SB 265 passed out of Senate Judiciary Committee by a vote of 6-4 and now will be considered by the full Senate.