House Bill 96

Chair's Name: James Mills

Committee: Banks & Banking

House Sponsor: James Mills

HB 96 allows letters of credit issued by a Federal Home Loan Bank to secure state funds on deposit in state depositories.

This bill received a Do Pass recommendation from the Banks & Banking Committee and comes to the House Floor under the Open Rule.

From the Chair:

WHAT OPPORTUNITY DOES THIS LEGISLATION ADDRESS?

This legislation puts another tool in the playbook of banks by allowing them to use a letter of credit to securitize the government money being deposited in that bank. It �could� create higher interest rates of return since it would allow more banks to compete for these funds.

WHAT IS THE DRIVING FORCE BEHIND THIS LEGISLATION?

Thirty nine other states already give this option to their banks. Georgia is the only state in the South East region that does not currently allow this. This bill passed the House in 2003 by the vote of 153:0, just never made it to the Senate.

BREIFLY STATE IF AND HOW THIS LEGISLATION:

 1.      Reduces the Size of Government:

 N/A

 2.      Strengthens the Traditional Family Structure

 N/A

 3.      Reduces the Tax Burden on our Citizens

 It �could� possibly allow a greater interest rate of return, thereby increasing the profitability of taxpayer dollars, which in turn ideally should reflect reduction in government spending.

 4.      Increases Personal Responsibility:

 N/A

 5.      Other:

 Currently banks are required by law to securitize these government deposits at 110% and this bill does not change that.