Comité Judiciary de la Cámara de Representantes, 18 de febrero de 2026

Transcripción

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1. 0:00:00

   Okay. All right, ladies and gentlemen, let's go ahead and get started. Um, Chairman Smith, can I call on you to open us up?

2. 0:00:12

   Thank you.

3. 0:00:12

   Bow your heads. Well, Lord Jesus, thank you for this day. Thank you for all your blessings, Lord. Thank you most of all for your salvation that you brought down to us so that we may have a restored relationship with you. Lord, we ask that you be with us in these proceedings. Help us to do what would be pleasing in your sight. In your name we pray. Amen.

4. 0:00:28

   Amen. Thank you. All right, um, we got a list of bills here. Not too many witnesses, uh, so I hope that we get through all seven of these. I have a hard stop at 3:30. So, uh, I'm gonna call my bill first, uh, because I think it's probably the simplest on here. Um, House Bill 1208, and, um, if nobody objects, I'll just do it from here. Um, this is a court reporter's bill.

5. 0:01:00

   I believe they're all in sync with this. Uh, and it, it just modernizes the code. Uh, it strikes out the stenographic means, uh, but leaves it with a court reporter. There has to be a certified court reporter where there's testimony taken at a deposition, and that's basically what it does. If I've missed anything, a couple of witnesses, uh, gentlemen, would y'all like to talk about it?

6. 0:01:31

   Didn't know how y'all had that divided up, so...

7. 0:01:35

   Mr. Chairman, we can do this real short as well.

8. 0:01:38

   All right.

9. 0:01:38

   Um, I'm Edward. For the record, I'm Edward Lindsey with the law firm of Dentons, uh, here representing, uh-

10. 0:01:46

    You might wanna pull that mic down just a little bit.

11. 0:01:49

    I'm Edward Lindsey. I'm here rep- uh, from the law firm Dentons. We represent, uh, four, uh, court re- reporter services, Esquire, uh, Magna Legal Services, US Legal Support, and Vintech's. We have spent the last year, uh, working with the Georgia Court Reporters Association, and, uh, Terry Rogers, uh, the, uh, is their lobbyist, and he's worked with us to come up with this language. And as you have defined it, is exactly what this bill does. It simply updates, uh, the, uh, nine eleven twenty-eight, nine eleven thirty, uh, to reflect the reality of court reporters and to ensure that court reporters will be there during depositions, which those of us who try cases know how important it is.

12. 0:02:34

    I have with me today, uh, Avi Statler with Esquire, who's an expert on this issue. Dealing with this issue, not just in Georgia, but around the country. So if anyone has any questions, he'll be happy to do the, the dirty work. And if you don't have any questions, we simply ask for your favorable support.

13. 0:02:50

    Thank you. Any questions? Do I hear a motion?

14. 0:02:56

    Move to pass.

15. 0:02:56

    Second.

16. 0:02:57

    I got a motion and a second. Any further discussion? Any amendments? All those in favor say, "Aye."

17. 0:03:03

    Aye.

18. 0:03:03

    Any opposed? All right. Thank you.

19. 0:03:06

    Thank you, Mr. Chairman.

20. 0:03:12

    Now, let's see.

21. 0:03:18

    Thank you,

22. 0:03:28

    Mr. Chairman.

23. 0:03:29

    Which, uh, which mic number do you have?

24. 0:03:31

    I have the thirteen.

25. 0:03:33

    Mitch, would you be willing to come up here?

26. 0:03:35

    Sure.

27. 0:03:35

    If it's all right, Mr. Chairman, uh, I have a witness here to assis-assist with any questions.

28. 0:03:41

    All right.

29. 0:03:42

    Thank you, Mr. Chairman. I present to the committee House Bill 1185 LC 620291 EC. Proud to bring this bill on behalf of and in partnership with, uh, Governor Brian Kemp's office. Approximately 2017, I carried a constitutional amendment to establish the Georgia Statewide Business Court. There was some enabling legislation that went along with it, and really what we've seen is, um, over the years as Georgia continues to be the number one state for business, there to be ways to effectuate the purpose of the business court, which is to have a legal system and, and a court system structured similar to states like the Delaware Chancery Court, where businesses are looking to incorporate within the state and foster, uh, business growth.

30. 0:04:28

    This bill does several, uh, critical things. First of all, creates a new definition for internal entity claim, defined as any claim arising from corporate code, including derivative actions based upon a violation by a director, officer, stockholder, or a proceeding related to the inspection of records. It would allow exclusive forum in the business court if in the bylaws of the corporation it specifies that the business court is where these matters are to be resolved, these, uh, derivative type claims.

31. 0:05:02

    Additionally, it would strengthen the jurisdiction of the business court, uh, by requiring that the court must accept the case if the documents filed, uh, the articles of incorporation specify the business courts to resolve any dispute, and that would prevent the business court from transferring the matter to a state or superior court. Additionally, uh, there is, uh, for these derivative proceedings, there'd be stricter requirements on shareholders who wish to, uh, sue on behalf of the corporation.

32. 0:05:36

    If the articles or bylaws include, included, um, it could require that a shareholder o-own a specific percentage of the stock in the company, not to exceed one percent, uh, to, uh, thereby allow these types of derivative actions. This is, as I think of it, it's like shareholder enforcement against the corporation Additionally, the shareholder must have owned the shares at the time of the alleged act or omission that brought about the suit.

33. 0:06:08

    And finally, it amends the, um, uh, subst- or clarifies the substantial benefit definition as to the payment of legal fees, um, where adding disclosures to shareholders does not count as a substantial benefit. Additionally, with respect to corporate records inspections, the bill specifies when and why a share-shareholder can get access to the company's books to ensure or limit, uh, there are as many fishing expeditions simply, uh, trying to, uh, get into corporate records, which can be very expensive, time-consuming process unless there's a, a substantive reason to do so, and that would include, um, uh, a prohibiting circumstances where proper purpose does not include gathering information for an active or pending derivative suit or a civil lawsuit where the shareholders and corporation are on-- are opposing parties.

34. 0:07:17

    Additionally, if a court finds that a shareholder's demand for records was not made in good faith, the court must or-order the shareholder to pay the legal fees that result from that action brought or conduct which was engaged in, in bad faith. And then additionally, the bill, uh, provides some liability or limiting monetary damage award potential, which would include if the articles of incorporation have language, they can limit the personal liability of an officer for monetary damages.

35. 0:07:55

    Now, this does not include circumstances of appropriating business opportunities, intentional misconduct, or knowing violations of the law, or receiving an improper personal benefit. Finally, the bill includes a fifteen-day, uh, period within which to object to, um, a move to move the claim to a state or spirit court if it's originally brought in the business court, and it would allow a one-year period if the parties agree for the, um, case to be moved, uh, for the removal provision, which would be removing the case from the court where filed to the business court.

36. 0:08:45

    And for specific actions like compelling, uh, compelling the purchaser shares or seeking relief in a statutory closed corporation, the court where the proceeding starts has plenary and exclusive jurisdiction in those types of matters. Just clearing that up. Very excited to be working, um, with the governor's office. And Mitch, if I could turn it over to you to fill in the blanks for anything I missed, if that's acceptable, Mr. Chairman.

37. 0:09:14

    Yes, sir. Introduce yourself and-

38. 0:09:18

    Sure.

39. 0:09:19

    The microphone's yours.

40. 0:09:21

    My name is Mitch Fusitola. I'm an attorney in the governor's office, and, uh, it's a pleasure to work with the leader on this bill. Um, and I think he covered everything pretty well. I'd just add that, um, you know, I think the, the major purpose of this bill is to provide businesses with more flexibility, as well as shareholders, more flexibility, um, clearer laws, and ultimately, uh, more stability in what the business laws in Georgia are to keep Georgia the number one place to do business.

41. 0:09:59

    Okay. Any questions for the author or the witness?

42. 0:10:07

    Uh, Representative Evans.

43. 0:10:09

    Thank you, Mr. Chairman. In section ten, where it looks like we're cutting out as a proper purpose, if anyone thinks they might have a case, a derivative case, they can't use a, um, inspection of records. Is that the intent?

44. 0:10:32

    So sometimes, um, shareholders will use those provisions as sort of an end run around the discovery process. And so the purpose of it is to make sure that in those cases where litigation is likely, then the-- that sort of-- those documents are, um, discovered in a way that's compliant with litigation procedures.

45. 0:11:03

    Well, it looks like you-- this would be-- you would be-- if you anticipate any kind of litigation expected to be, line one fifty-four and one fifty-six, it's not-- there's not a limit on the ability to do an inspection of records. There's a prohibition.

46. 0:11:20

    Well, but in one fifty-three and one fifty-five, it, uh, constrains those cases to an active or pending lawsuit.

47. 0:11:31

    That is or is expected to be instituted or maintained. So that means not just pending, but anticipated, right?

48. 0:11:40

    Uh, no. My reading is that it's, uh, active or pending.

49. 0:11:46

    So it's not your intention to scoop up expect-expected claims, and you wouldn't mind if we took that out?

50. 0:11:55

    Um, no, I, I think the, the language is pretty clear in the way that it is.

51. 0:12:00

    My, my response would be it makes very clear it's an active or pending proceeding and that, uh, s- that if the Uh, it would not be a proper purpose, in my view, to seek information about, um, to seek information beyond the actual claim that's been brought. That's fair. Yeah.

52. 0:12:25

    I'm not following.

53. 0:12:26

    That if, um... And there's an active case that's brought, and, um, the, the question here is to, or the policy objective is to avoid fishing expeditions which could occur-

54. 0:12:39

    Mm-hmm

55. 0:12:39

    ... in discovery or seeking access to corporate records that otherwise, well, which, which can be a very expensive and delay-causing process. That if, for the purpose of seeking information of other potential litigation which is outside of the action that's been filed, that would not be a proper purpose. So I think the language is fine as it is with that being the policy objective.

56. 0:13:06

    But the, the policy objective is not to cut off anybody who might expect in the future that they might have a claim. I mean, and the reason I ask this is that in Delaware, that you ha-- that you are considering a claim, you still have every right to use their books and records inspection process. And in fact, I think there's even... I, I couldn't quote it to you, but I don't know if it's a, an article that I read or a case, but the discussion is sometimes it's preferred that if, if a minority shareholder or limited partner thinks they might have a claim, if they're able to get access to books and records that tells them that they don't, then it actually saves you from litigation.

57. 0:13:44

    So Delaware doesn't cut people off from using that process just because... I mean, usually people ask for books and records 'cause they think there's a problem. So if you cut off the ability to people to use it because they expect that they might have a claim, Delaware doesn't even do that. So I, I just am very concerned about that because despite what y'all both said, I think the word expected to be is concerning, and I-- That, that's why I raised the issue.

58. 0:14:09

    If I could just add to, to, um, what the leader said. So lines one fifty-four and one fifty-six, that expected to be language, uh, is regarding the adversarial named parties, not an active or pending proceeding. So I think that when looked at in that light, your concern is addressed.

59. 0:14:37

    Tell me who those parties are. When you-- You said... Just say what you said again. I'm just trying to-

60. 0:14:43

    Yeah. So-

61. 0:14:43

    ... identify who those people are.

62. 0:14:45

    Yeah. So for, you know, and okay, in, uh, line one fifty-three, an active or pending derivative proceeding in the right of the corporation that is or is expected to be instituted or maintained by a shareholder, or one fifty-five, an active or pending civil lawsuit to which the corporation and the shareholder are, are expected to be adversarial named parties. So in one fifty-six, that expected to be language is regarding, you know, who the parties are gonna be and if parties could later be brought in and...

63. 0:15:18

    So how would that... Either the leader or you, I, I don't know how that doesn't mean... If, if I'm a limited partner and I have concerns that might lead me to a lawsuit, uh, how am I not cut off? Because if I, if I do look at the records and I, and I continue to have the concerns that I have, and I do bring an action, how does, how do I not, how would I not be in trouble here?

64. 0:15:52

    Oh, there again, I think the, the objective here is, as I understand it, shareholders have access to records when for a proper purpose. If it is for the purpose of attempting to cr-create litigation, create, um, an expense associate... Well, and incur an expense associated with obtaining those documents, what I would characterize as a fishing expedition-

65. 0:16:18

    Mm-hmm

66. 0:16:18

    ... that's a problem. And potentially, um, if the law does not provide protections to provide that structure, then, um, then corporations will say Georgia's not, not a place, you know, we wanna incorporate or, or, um, or be. And so, uh, the objective here is to limit proper purpose so that it would not include circumstances where a shareholder is simply attempting to bring a cl- looking for some basis to bring a claim, unsubstantiated otherwise.

67. 0:16:54

    Um, and this I think makes it very clear. It, it would have to, uh, proper purpose does not include if you have an existing claim seeking records to support some other potential claim, uh, outside of the scope of the suit that was brought. That's, that's my reading interpretation of this as a non-corporations attorney and, um, and it's based upon that, that I think this is in line with the policy objective I stated.

68. 0:17:26

    But you wouldn't w- for either of you, it, it wouldn't be, I don't think you would say it was an improper purpose for a limited partner or limited shareholder to check on their... look out for their rights and check on things. And that, that's sort of where I'm running into the trouble because if you, if you think there-- You're not gonna ask for books and records unless you think there's a problem. And if you think there's a problem, you have to somewhere in your head think, "This could lead to litigation." But I'm not, I'm not doing it. I'm not looking for litigation. I'm looking to see if there's a problem.

69. 0:17:56

    Well-

70. 0:17:56

    And so that... And I g- And we might, I mean, I may propose an amendment and it'll, it'll be what it'll be, but I have real concern that we basically would cut out... People don't ask for books and records when they think it's good.

71. 0:18:08

    What I'm certainly not, uh Debating the, the bill or arguing with you whatsoever. I'm, I'm just trying to-- As I, as I view it, um, if there is not some limitation, then there's the potential for these fishing expeditions to occur always under the auspice of, "I may find something that may entitle me to bring some other claim." And so the policy question, as I see it, is, are we going to have unfettered access, which can be very expensive and time-consuming, um, costly in many ways, or are we going to say it really must be that limitations are appropriate, consistent with the claim that was brought?

72. 0:18:51

    And it's based upon that, that I believe this language is suitable, and I, I hear your, uh, stated intention about potentially bringing an amendment.

73. 0:19:00

    Okay. Thank you.

74. 0:19:03

    Thank you.

75. 0:19:03

    Okay.

76. 0:19:06

    Representative Holcomb.

77. 0:19:08

    Thank you, Mr. Chairman. Will this apply to both public and privately held companies?

78. 0:19:13

    Um, it, it depends on what provision you're talking about.

79. 0:19:17

    Okay.

80. 0:19:20

    A-and let's start at the beginning. So line nineteen and twenty, um,

81. 0:19:30

    can you define for me what the phrasing relates to the internal affairs of the entity means?

82. 0:19:38

    So I think that that is-- examples of that are fairly, uh, summarized in, um, yeah, suits to the alleged, uh, a violation of a duty by a director or officer. Um, valuation proceedings are another example of that, as well as, um, proceedings for the court-ordered inspection of records.

83. 0:20:08

    Those are three different things. Internal affairs of the entity would be like a breach of fiduciary duty. Evaluation proceeding would be what's the asset worth, right?

84. 0:20:17

    But all under the sort of the definition of an internal entity claim. Um, yeah, in line seventeen, we have, um, a claim, action, or proceeding of any nature arising out of, um, this title, which is Title Fourteen.

85. 0:20:38

    I understand. But people have to be able to interpret what the language is. And so this relates to the internal affairs of the entity, evaluation proceeding, or proceeding related to the court order inspection. Those are the three, three things. And so, uh, uh, to make sure that I understand, the internal affairs of the entity, what your intention is for that to be like a breach of fiduciary duty claim against an officer or director, or is it something else?

86. 0:21:09

    I'm sorry. Say the last part again just to make sure I understand you.

87. 0:21:15

    What is intended-- What is the intended definition of internal affairs of the entity? What types of claims would that give rise to?

88. 0:21:24

    Yeah. So I, I think a, a claim arising out of Title Fourteen. So there are lots of claims listed in the various sections of Title Fourteen that could potentially be included.

89. 0:21:40

    It would be classified as internal affairs of the entity?

90. 0:21:45

    Yeah, if it relates to the-- Yeah, the internal affairs of the entity.

91. 0:21:50

    Okay. All right. And, and then how would we define evaluation proceeding?

92. 0:21:56

    There are...

93. 0:22:01

    Um, let me find the section.

94. 0:22:51

    I know it's in here, I'm just having trouble pinpointing where it is.

95. 0:23:00

    Okay. So on page seven, that's section nine.

96. 0:23:04

    Okay.

97. 0:23:09

    Uh, section-- code section fourteen two thirteen thirty, and I believe the surrounding code sections provide the parameters of evaluation proceeding.

98. 0:23:28

    Okay. I'll have to take a look at that. I noticed the word equitable, which, uh, I'm not sure where that goes. Like, equity is usually an injunction as opposed to a lawsuit over damages. So...

99. 0:23:41

    I think that that language is a holdover from, uh, these suits I th- uh, I believe originated in common law, and I think that that term is a holdover from-

100. 0:23:54

     Gotcha

101. 0:23:54

     ... from that.

102. 0:23:54

     Okay. All right. My other questions, um, are h-how did you come up with on line eighty-two, the one percent threshold for the outstanding shares? And that's in other places too, but just the, the one percent. Is that what's common in other states, or like, what, what criteria, if any, were used to establish that threshold?

103. 0:24:17

     Well, for states that have placed a threshold on it, I think you'll see that a lot of the ones that have made recent amendments are actually higher. Texas' is 3%. Um, 1% obviously, you know, doesn't go as far as 3%, but still provides a reasonable threshold of ownership for bringing those claims. And I point out that it's up to 1%, so the, the corporation, you know, is free to determine whether it wants to, um, to, you know, institute that provision in its governing documents and, um, only for public corporations.

104. 0:25:03

     Okay. And one of the intentions of the bill, my understanding is, is to try to get more companies to incorporate in Georgia. Is that correct?

105. 0:25:15

     That's right.

106. 0:25:15

     Okay. All right. And then I, I think my last question, um, is on line 97. It's in other places of the bill too, but, um, I think it gets a little bit to what my colleague, Representative Evans, was talking about in terms of the information that might be known. And it's, it, it seems to be limiting regardless of materiality. And within the securities worlds, the, the term materiality is like the coin of the realm, is all of our security statutes are built upon, um, not caveat emptor, buyer beware, but rather disclosure, transparency, and materiality.

107. 0:25:55

     So why would we accept and not include materiality as part of this?

108. 0:26:05

     Well, I think, uh, the, the sort of the,

109. 0:26:11

     the purpose behind, um, this provision is after a, you know, for example, after a, a large, the announcement of a large corporate transaction, you'll have these shareholder suits, and usually the first ones to come along are, um, done to sort of, um, yeah, have additional or amended disclosures made. And those, um, you know, amended or additional disclosures don't really, um,

110. 0:26:50

     speak to legitimate issues that shareholders may actually have with the corporate transaction.

111. 0:27:00

     Can you give me an example?

112. 0:27:03

     Well, I'll-- So I'll tell you, um, you know, in a proceeding like this, um, the shareholders are likely gonna have a problem with the, the, the, the price of the transaction, what's being exchanged. And in that case, they'd be able to provide something of value, uh, back to the corporation in the derivative proceeding. And, you know, in these cases where the remedy is amended or additional disclosures, you have these global settlements terms that, you know, then preclude shareholders that may actually have these legitimate concerns from bringing suit.

113. 0:27:45

     And so that, that's the purpose behind that.

114. 0:27:48

     Okay. All right. And I think that's it. Thank you.

115. 0:27:54

     All right. Any further questions? Seeing, uh, none, what's the will of the committee?

116. 0:28:00

     Move do pass.

117. 0:28:01

     Second.

118. 0:28:02

     All right. Got a motion and a second. Any... Okay. Representative Evans.

119. 0:28:10

     Let's have a proposed amendment.

120. 0:28:18

     In Section 10,

121. 0:28:35

     um, the amendment would be on lines one fifty, one fifty-three to one fifty-four to strike the comma, "or is expected to be," comma, and insert the word "currently." And then on line one fifty-five to one fifty-six, striking the comma, "or are expected to be," comma, and insert-inserting the word "currently." And the intention would be to, um, not prohibit folks from using a books and records request just because they may expect, or certainly couldn't rule out expecting to have a future lawsuit based on what they find.

122. 0:29:24

     Because they could be reaching out, they could be asking to look for documents to protect their rights, and if they find out that those rights are violated, then they, they should have every right to continue to redress.

123. 0:29:36

     So if I may, Mr. Chairman, respond. First of all, I wanna thank the representative for the input and the idea here today. The, um... W-without repeating the policy objectives I, I just stated, I mean, I, I think there is a common objective here to make sure that we prevent fishing expeditions while also preparing the, uh, protecting legitimate claims that may need to be broad in the ability to seek information. What I, what I would just, um, state is it's my view that the language as presented is consistent with the policy objective, but I have made a note of the amendment.

124. 0:30:11

     Regardless of the will of the committee here today, I intend to work on this, continue to look into it, and communicate with you, Representative, if that's agreeable, so that we can make sure this language is, is, uh, as right as it needs to be. Um, but, uh, in the spirit of this being day 20 and, you know, my, um, uh, concern to make sure that we get our business court established here with the way it needs to be, I'll, I'll respectfully oppose the, the, uh, the amendment, but, um, but commit to you, uh, nevertheless that I wanna, wanna work with you on this.

125. 0:30:45

     I wanna get additional information, uh, so that we have the best bill possible that, that ultimately is enacted.

126. 0:30:51

     Okay. I appreciate it, and very much appreciate that. I'll, I'll move the amendment and we'll, we'll see where we fall, 'cause it would be my preference to at least have it this way and then we can work from that, but I understand your objection, so-

127. 0:31:02

     Yes, ma'am. Thank you.

128. 0:31:03

     I, I'll just hope for a second on my motion.

129. 0:31:07

     All right. Uh, so we have a motion. Is there a second?

130. 0:31:10

     Second.

131. 0:31:11

     Got a second. Um, any further discussion? Any other amendments?

132. 0:31:19

     I do have a couple more.

133. 0:31:21

     Okay.

134. 0:31:21

     They wouldn't be in the same section.

135. 0:31:23

     All right. Then let's take care of this one first, and then we'll come back to that. All right. All those in favor of, uh, the first motion run- l- involving lines 153 to 156, all those in favor say aye.

136. 0:31:36

     Aye.

137. 0:31:37

     Any opposed?

138. 0:31:37

     No.

139. 0:31:38

     No.

140. 0:31:38

     Division.

141. 0:31:40

     All right, let's do it by a show of hands. All those in favor of this, say it or raise your right hand. One, two, three, four. And those that oppose it.

142. 0:31:57

     One, two. Okay. Fails. Okay. You have another ame- amendment?

143. 0:32:02

     Yes. On lines 179 to 185,

144. 0:32:09

     striking that language. Judges already have the ability to award fees if they think someone is not acting with a proper purpose, and the mandatory language of shall is concerning. Um, and then it would be relatedly striking... I'm sorry, it would be striking lines 179 starting at the word if, the words if the court, and ending through lines 185, and then on lines 213 starting at if the court and through line 221. Again, uh, I think those are the only spots.

145. 0:32:42

     The in- the, the amendment would, would intend to take out all mandatory fee shifting because judges already have the ability to do that. That's the, um, that's the amendment.

146. 0:32:54

     So make sure I got this right. You're striking lines 179 to 185 starting at if the court does.

147. 0:33:02

     Yes, Chairman.

148. 0:33:03

     Okay. And then the next one is line 213 starting at, uh, if the court does and striking to the end of it?

149. 0:33:11

     Correct.

150. 0:33:12

     Okay. On line 216. All right. Do I hear a second?

151. 0:33:18

     Second.

152. 0:33:20

     All right. Any further discussion? All those in favor of this amendment say aye.

153. 0:33:27

     Aye.

154. 0:33:27

     Any opposed?

155. 0:33:28

     No.

156. 0:33:29

     No.

157. 0:33:31

     Okay. Let's-

158. 0:33:32

     That was loud enough.

159. 0:33:33

     I'll go ahead and, uh, get you to raise your hands. All those in favor, raise your right hand. One, two, three, four. Okay. All those opposed. Same number. Okay. Thank you. It fails. Anything else?

160. 0:33:49

     Not for me.

161. 0:33:51

     Okay. Any other amendments? Hearing none, all those in favor of, uh, passage of this bill say aye.

162. 0:33:59

     Aye.

163. 0:33:59

     Aye.

164. 0:34:00

     Any opposed?

165. 0:34:02

     No.

166. 0:34:02

     Okay. The ayes have it.

167. 0:34:04

     Thank you.

168. 0:34:04

     Bill goes on.

169. 0:34:08

     All right. So I have waited to this point to give our, uh, Judge of the Week recognition, who's a former chairman of this committee and also a former member of the House of Representatives, Barry Fleming. Barry, thank you for coming.

170. 0:34:29

     I know you're enjoying this.

171. 0:34:32

     Mr. Chairman, I'm always enjoying

172. 0:34:37

     this.

173. 0:34:39

     Okay. So where are we gonna land next? Um, one, two, three. How about Hawkins?

174. 0:34:49

     I think we have people signed up for that one.

175. 0:34:51

     We do?

176. 0:34:52

     Yeah.

177. 0:34:53

     Okay.

178. 0:34:53

     So...

179. 0:34:54

     All right. Uh, let's do House Bill 1243, Representative Hawkins' bill. Do you wanna do it from where you're seated?

180. 0:35:02

     If you don't mind.

181. 0:35:02

     Yes, sir.

182. 0:35:03

     All right. Thank you, Mr. Chairman. Um, this bill, um, the idea behind it is really pretty simple. It's to be able to track longitudinally, um, how we're doing in terms of our criminal justice policies and, um, open it up for research from reputable, bonafide research institutions. Uh, among others, there's one at the University of Michigan, and I think Brock is passing out, and they track h- how, um, communities are doing.

183. 0:35:37

     And, and candidly We don't do very well nationally or even in Georgia of tracking precisely how we're doing with respect to, to crime. So we have very high clearance rates for murders as one would expect. But even if you take by example the city of Atlanta, its clearance rate is 87%, which means 13 out of every 100 are not being solved. We have deplorable clearance rates for rape, sexual assault, larcenies, car break-ins, and the like, and part of that is because we don't collect and track the data.

184. 0:36:10

     So the purpose of this bill is to collect and track the data and then make it available to researchers. There are some around the country that do it. My sense is if this were passed, it would also, um, likely lead to more research here within the state of Georgia. And one of the tangential benefits of the bill would be for our administrative agencies trying to examine how the different policies and interventions that they've put into effect are performing, is they would get the benefit of researchers with excess capacity being able to do the analysis and work, um, for them.

185. 0:36:47

     And one of, uh, the, the substantive things that I'll point out, and I'm happy to answer any questions, is this, this would allow them to get individual names, which is different than normal, but it would have to be, um, of course, preserved, maintained for confidentiality and, uh, very, very strict protocols which those that do this have a- as part of their, their operating procedure. And the reason why they do that is that's the only way that you can track things longitudinally, because you have to be able to connect the variables together of the individuals to, um, the variables and then, and then the outcomes.

186. 0:37:27

     Otherwise, you're just looking at things from a macro level, and it doesn't give you, uh, the same type of analysis and u- utility, um, otherwise. So that's an overview of the bill. I'm happy to answer, um, any questions.

187. 0:37:44

     All right. Any questions by the committee to the author?

188. 0:37:49

     All right. I don't see any. Um, there are a couple of folks that wanna testify. Um, Mr. Skandalakis, are you here? Oh. Robert, come on up.

189. 0:38:05

     So, so you got stuck with the lift, huh?

190. 0:38:12

     Which one's the live one?

191. 0:38:14

     Uh, the one to the right. But I can switch it any way you want.

192. 0:38:18

     That's great. Hi, I'm Robert Smith. I'm General Counsel with the Prosecuting Attorneys' Council, and don't have a problem with the theory and the spirit behind the bill. The only reason why I'm here is just talking about guardrails. A couple years ago, there was a, a quest- an open question as to whether or not the files of a district attorney or solicitor general were subject to open records. That question has now been resolved by the Supreme Court. And in it, it talked about that, that we don't have branches of government and protections. It's more about how you operate and the powers that you wield.

193. 0:38:52

     And they found that even though the prosecutors in the state are in the judicial branch, we use executive powers, so we would be subject to open records. That's fine. There are exemptions and there are protections when we're asked to provide information. The concern that I have and just wanna express is that now we're not asking about open records, we're talking about data, and we have lots of data. We have criminal histories. We have personal information of defendants, of victims.

194. 0:39:22

     We have, you know, images that no one, no one needs to ever see. So when we allow these-- When we're allowing this data to be collected for third parties, making sure that it is protected, making sure there are guardrails so the information that is p- provided to these bona fide researchers is protected and made sure not to ever become public. Not just for the protection of our victims, but also for the protection of our defendants. We have first offender. So when someone has successfully completed first offender, the public doesn't find out the information about the case.

195. 0:39:54

     It is sealed. It's, uh, and we don't want that to be leaked out either. So that's, um, basically appreciate the spirit and just wanna make sure there are appropriate guardrails in place to protect our files, the attorney work product that's contained within, as well as the infor- personal information.

196. 0:40:12

     Any suggestions or changes that would be made in it?

197. 0:40:15

     I, I don't have any specifics. It's just one of those things to think about and to, when the, the, the committee and the, and as I know the author will, you know, as he reviews the bill and thinks of it, the things to consider. I, you know, I don't know how to perfect this. Um, I, you know, I don't have the wisdom of a legislator to be able to do that. So...

198. 0:40:37

     Okay.

199. 0:40:38

     And, and for what it's worth, I think that there are, um, the guardrails in lines thirty-five and thirty-six do expressly do not allow any specific individuals to be named. And so it's really just the generic academic research goal.

200. 0:40:53

     And in theory, this could be, you know, this isn't just going to a DA's office. This can go to a child advocacy center. This could go to a sheriff's office. This could go to a clerk of court and ask them to comply with it as well. So that is, that's one of the things that this is a little bit different than an open records request. You know, the researchers will have access to some broader agencies than they normally would if they made a simple request. The other thing too, and, you know, want, you want my honest opinion about how to fix this?

201. 0:41:19

     Mm-hmm.

202. 0:41:21

     If, if I-- We all see the consequences and have heard about data breaches. You know, what is the, what is the sanction if this, you know, if the guardrails and the protections that these researchers have put in place fall or fail? And, you know, that's, you balance the consequences and consequences with the responsibilities. You want the information You say you're gonna protect it, and if something does leak out, and granted that's, this is seriously a barn, you know, horses out of the barn, but at least some sort of protection for the people whose information has been released.

203. 0:41:57

     Yeah. And having sat in the seat of a DA, I know exactly what you're talking about.

204. 0:42:04

     Yes, sir.

205. 0:42:07

     All right. Um, I believe we have some folks from the sheriff's who wanna talk. Are there any questions for Robert before we move on?

206. 0:42:17

     And I apologize for not coming with solutions today. Usually I've got some thoughts, but, you know, this is one of those times where I just, you know, hey, just something we've got to think about, please.

207. 0:42:25

     Okay. All right. Come on up.

208. 0:42:34

     Mike Mitchell.

209. 0:42:35

     Yes, sir. Just, uh, introduce yourself and then tell us what you think about this.

210. 0:42:40

     Yes, sir. My name is Mike Mitchell. I'm the deputy d- director at the Georgia Sheriff's Association. I wanna apologize for not signing up. I, I guess I missed the sign-in sheet, but we have similar concerns as Mr. Smith does. Uh, I think our primary concern is that this may put law enforcement out of compliance with our standards with the FBI and CJIS and how we handle and store that information. Uh, I may have to rely on my good friends from the GBI, uh, in the back of the room.

211. 0:43:10

     They may be able to provide some more, uh, information on that. But, uh, there's probably some federal statute as well governing, uh, that data and how we have to maintain it. So that would be my concern. Could be a audit, audit issue for us.

212. 0:43:25

     Okay. All right. Some of that, uh, information does, that you put in, goes into the federal system, is that right?

213. 0:43:31

     Yes, sir.

214. 0:43:32

     Yes, sir.

215. 0:43:32

     As well as prosecutors. I think prosecutors use the-

216. 0:43:35

     Mm-hmm

217. 0:43:35

     ... system to input-

218. 0:43:36

     True

219. 0:43:36

     ... conviction data and so forth.

220. 0:43:38

     True. Okay. Any questions for the witness?

221. 0:43:42

     Uh, uh, just one. Uh, is, uh, I think what this is seeking is not anything that would interfere with any federal level systems that are used, but rather for the data that is kept and maintained by our own agencies. And so the information on the individuals who are arrested, the crimes that they're charged with, um, and then overall the outcomes of those prosecutions and then, um, if, if... Th- there's different manifestations of how it can be researched, but from time spent incarcerated and then if there's recidivism and also just the overall occurrence rates.

222. 0:44:25

     So the data that is being sought after is more, would be better characterized as more general level data of how are we doing in terms of n- the incidents and the prevalence of, of crime throughout locations, and then tracking how we're doing longitudinally over time. But the only way that you can really track longitudinally is by having, like, the individual names. So I think this, the, what the researchers have, they've shared it with me of really what they're looking at, is to get much of what is already being produced and provided and tracked, but with the added component of the names, which they would keep secure only so then they can see how that person is doing over time.

223. 0:45:08

     Because if you ju- just get the data without linking it to a name, you can't tie those two things together, if that makes sense.

224. 0:45:15

     It does. I, I understand what you're trying to achieve.

225. 0:45:18

     Yeah.

226. 0:45:18

     Um, however, I, I do have concerns, you know, compliance with the guidelines that the GBI and the FBI have set forth on how this data can be shared.

227. 0:45:30

     Okay.

228. 0:45:30

     That's my biggest concern.

229. 0:45:30

     Tell, tell him what happens if they determine that you're not in compliance.

230. 0:45:34

     Oh, yeah, we could lose our, our access to the system. Someone could be criminally charged for sharing that data.

231. 0:45:44

     Okay. Uh, uh, then I, I think my question would be, absent those forums, do you have the data stored or the ability to provide data, like, from your own organic resources and files? So not the other systems, not the GBI systems or the FBI systems, but just your own agency's files. Like, there's existing files that you all have with data, correct?

232. 0:46:12

     Yeah. So we, we call it CHRI, which is an acronym that stands for Criminal Hi- History Record Information, and that data is protected as well. It may not be in a system, it may be a paper document that's in a file. Uh, but that information is protected as well.

233. 0:46:27

     Okay.

234. 0:46:30

     Yeah. Okay.

235. 0:46:31

     And if I could maybe offer a solution, maybe a study committee where this could be looked at more closely and we bring the stakeholders to the table.

236. 0:46:40

     Okay.

237. 0:46:43

     Okay. Any further questions? All right. Thank you, sir.

238. 0:46:48

     Thank you.

239. 0:46:48

     GBI like to step forward.

240. 0:46:56

     Good afternoon, Mr. Chairman. How are you, sir?

241. 0:46:58

     I'm good. How are you?

242. 0:46:58

     Sorry for not signing up, uh, additionally. Uh, we missed the sheet walking in. But, and, uh, good afternoon, committee. Thanks so much for hearing our time. Thank you, sponsor, for bringing the bill. My name's Philip Curtis, I'm an attorney with the Georgia Bureau of Investigation. Uh, wanted to speak similar to what the sheriffs and PEC had to say on this bill and our concerns and where, uh, GBI sees the bill, is where the rubber meets the road on this particular, uh, piece of legislation is lines 78 through 81, in that the bill, uh, provides for a disclosure of criminal record, uh, information, uh, without exemption, without redaction, um, without, uh, any type of consideration of currently existing state and federal law.

243. 0:47:45

     So just to kinda, like, big picture here Um, since the '70s, criminal history record information has been governed by a web of state and federal laws. Essentially, you know, the, the, the bread and butter type of information disclosure is from one law enforcement agency to another law enforcement agency, right? That's, that's what the system is built on. When you start looking at the disclosure of data outside of that sphere, it, it, it's gonna be impacted by state and federal laws.

244. 0:48:16

     And, and I think it was already picked up by you, uh, Mr. Chairman, that disclosing data outside of those provisions can go all the way up and until failure to then for the GBI or other law enforcement agencies to then access that data. So it's, it's the, it's the conflict, um, of th- of this bill's provisions with currently existing state and federal law that, um, re- really, um, has a, has a significant impact on the GBI.

245. 0:48:47

     And re- the, the GBI is somewhat uniquely situation-- uh, sit- situated in that we're the, the, the node for criminal justice information, uh, between other states and other-- a-and the national government as well, and we want to continue to have access to that data. So violating laws or rules or regulations promulgating as it relates to the sharing of criminal justice information is, is a concern uniquely for the GBI as well. So I wanted to, uh, bring those concerns to you. And then just one thing, um, to, to the sponsor, the, the-- within the GBI, there is an operational unit, um, the Criminal Justice Information Center, and it's my understanding, I'm happy to speak with you more on this, that there is an avenue for research data to be obtained through certain requests, uh, certain de-identified data that, that is provided for the specific research purposes.

246. 0:49:40

     So I don't know if you knew that or not, but I'm happy to have that conversation with you, that there's already a application system in place for the use of criminal justice data, not like this, but in a different sphere, um, that, that would allow for research purposes. So just wanted the committee to be aware of that, wanted the committee to be aware of, uh, GBI's, um, concerns with conflict in federal law and also another avenue for similar information.

247. 0:50:06

     Any questions?

248. 0:50:08

     No.

249. 0:50:08

     Okay. Anybody else have questions, questions for the witness? Oh, I'm sorry. Yeah, I'm sitting here looking at it flashing. Vice Chair, go ahead.

250. 0:50:17

     Thank you, Chairman. Or no, um, okay. Mr. Curtis, um-

251. 0:50:22

     Yes, sir.

252. 0:50:23

     Florida, Texas, Ohio, Pennsylvania, Arizona, other states with around eleven million or more people, uh, similar to Georgia, are y'all in touch with them on other matters?

253. 0:50:32

     Uh, yes, sir.

254. 0:50:33

     All right. Um, rather than doing a study committee, would it be possible, you know, over the next few days, put the word out with this bill to colleagues in other states, see if they have legislation that's been implemented that is in compliance, and see if we can get that, uh-

255. 0:50:47

     Yes, sir

256. 0:50:47

     ... moved on? Um, this sounds like a good idea that, uh, we may want to, to implement here in Georgia, uh, as long as we can iron out these compliance questions.

257. 0:50:57

     I-

258. 0:50:58

     Would that be possible?

259. 0:50:58

     Happy to do that.

260. 0:50:59

     Okay.

261. 0:50:59

     Happy to do that. Yes, sir.

262. 0:51:00

     Thank you.

263. 0:51:02

     Uh, Chairman Momtahan.

264. 0:51:05

     Thank you, Mr. Chairman.

265. 0:51:09

     Hang on. Which-- What's the number on it?

266. 0:51:12

     Uh, you put seven. Sixteen.

267. 0:51:13

     Sixteen. Yeah.

268. 0:51:14

     Sixteen.

269. 0:51:14

     There you go. Continue from now.

270. 0:51:16

     Sixteen's dead.

271. 0:51:16

     Good.

272. 0:51:16

     Is it working?

273. 0:51:17

     Yeah. That's it.

274. 0:51:18

     Okay.

275. 0:51:19

     Um, you know, uh, that's gonna happen. And that is-- So what you're saying, I think what your testimony says is, and I think this goes back to the chairs too, is you're signing an agreement with federal agencies that says that we're not gonna share this information even if we don't upload it to your database. This is privileged information per an agreement, right?

276. 0:51:43

     It, it's not an agreement, it's a law.

277. 0:51:44

     A law. Okay. Okay.

278. 0:51:45

     Now, agreements follow after the law-

279. 0:51:47

     Right

280. 0:51:47

     ... in that the, the feds paper everything. So there's agreements after the fact, but it's, it's a law.

281. 0:51:52

     Got it. Okay.

282. 0:51:53

     It's based on the law. Yes, sir.

283. 0:51:54

     So, and then to the author, um, I'm seeing here on this, uh, I think you handed out the sheet here. Um, it is showing that, you know, eighty-five point two percent, you know, forty-two states are participating. So ha-have you talked with other states to kinda find out how they're getting this data? Obviously, they're not operating-- Forty-two states aren't operating outside the law, right? So there has to be a method here. So maybe talk to some of these other states, because I know in my time here under the Gold Dome, I've seen you working on some great issues, and so I know where your heart is.

284. 0:52:29

     Um, but if forty-two other states have some, they're gonna have some guidance here that I think maybe could help you.

285. 0:52:36

     I, I, I would think so, and, and I hadn't heard any negative, um, feedback, so I certainly appreciate all the feedback today. Um, it's most welcome. Uh-

286. 0:52:49

     But at the same time, what I would say is it, it's-- It-- I find it a little bit concerning in, in t- taking into account the different things that need to be balanced of individual privacy, et cetera, the ability of law enforcement to share information for the ability to stop, um, prevent, and then address crimes. But at the same token, where I'm coming from, and hopefully we can, um, find kind of a path forward, we spend tons of money on trying to address public safety and crime, but we really don't do a great job analyzing it and collecting data from a public overall perspective, which is what I'm trying to get at, of how are we doing in terms of outcomes overall with information that isn't shared within agencies for your specific public safety purpose, but rather how are we doing in terms of the investments that we're making in public safety at the macro level.

287. 0:53:47

     And so certainly I can read the room, and I think it would be best to, to hold this, uh, Mr. Chairman. We'll work at it. I don't wanna, and nobody does wants us to pass something that would force those in law enforcement to do anything illegal or un- unlawful. But I, I, I do think to the point that was made is well taken. If, if other states are figuring this out, we should be able to figure it out too.

288. 0:54:10

     Yeah.

289. 0:54:10

     And I-- This is a start of it. So thank you.

290. 0:54:12

     And one other aspect of this is the, the victims in cases, uh, or the victims' families. Um, I had a case that, uh, occurred a long time ago, but I know the family would not want that information to come out at all. So we, we have that side of it to look after too.

291. 0:54:32

     Yeah. Yeah. W-which I don't think is what this is going after. This is really focused on measuring, um, the inputs and outputs res- with respect to the perpetrators, not, um, not the victims.

292. 0:54:44

     Well, the-

293. 0:54:45

     Yeah.

294. 0:54:45

     Yeah. When you have serial killers, that's, uh, that's the kind of cases that I'm talking about.

295. 0:54:50

     Yeah.

296. 0:54:52

     Okay. All right. Then we'll hold this. Thank you for the bill and the input.

297. 0:54:56

     You're welcome.

298. 0:54:57

     And, uh, we still got time to work on this and get something done. So...

299. 0:55:01

     Thank you.

300. 0:55:01

     Thank you. And I know the clerk in the back, uh, did, did you have something you wanna add to this or?

301. 0:55:10

     Mr. Clerk, I'll be addressing it.

302. 0:55:12

     Okay. All right. Thank you.

303. 0:55:16

     All right. Uh, let's see what's next. Um, Representative Silcox, you wanna do yours?

304. 0:55:25

     Sure.

305. 0:55:25

     Okay. What number are you? Or you wanna go up here?

306. 0:55:30

     Please.

307. 0:55:30

     Okay.

308. 0:55:33

     I'm next.

309. 0:55:33

     Okay. You're late.

310. 0:55:51

     Okay.

311. 0:55:54

     I'm fine. I've been looking at all these new bills.

312. 0:55:59

     All right. I got both of the mics lit up.

313. 0:56:01

     Okay, great.

314. 0:56:02

     Yeah.

315. 0:56:03

     Um, so I'm here today to present, um, House Bill 1264, and I have two guests with me today. I have, um, Craig Gilchrist, who is president of the Homeowners Association in Hu- um, Huntcliff Subdivision, which is one of the largest neighborhoods in Sandy Springs. And then I have their counsel, John Zamer, um, who is, um, helping us with this legislation. So, um, I'll let John-- You and I can switch seats and let y'all run with this.

316. 0:56:30

     Okay.

317. 0:56:30

     You said 1264. It's 664.

318. 0:56:32

     I'm sorry. 664. I beg your pardon.

319. 0:56:36

     That's the one.

320. 0:56:45

     Thank you, Mr. Chairman and committee. Uh, my name is John Zamer. I'm representing the Huntcliff Homeowners Association. I'm a resident of Huntcliff. I'm a volunteer lawyer for Huntcliff. Sort of an oxymoron. Um, Huntcliff supports House Bill 664, which is back before you as a matter of unfinished business from, from last year. Y'all might be familiar with the Property Owners Association Act, which was enacted in 1994.

321. 0:57:17

     And it-- I'm not gonna out-- I've got one page of remarks, so I'm not gonna outline all the benefits. But every homeowners association since 1994 puts their election to be governed by this statute in their covenants. So but Huntcliff is a preexisting association. And under the statute, um, those preexisting associations can only elect to be governed by the statute if they amend their covenants.

322. 0:57:50

     And so this is, um... We're seeking to widen that to, to re- to allow eighty percent of the members, if they consent, to have that as an alternative path to electing into the statute. Um, so the problem that exists is many older associations have covenants that lack provisions for amendment. There's a document written. There's no provision for amendment.

323. 0:58:22

     So in Georgia, and I've spoken to a lot of lawyers that represent homeowners associations for business. I don't. I'm a retired corporate lawyer. I just live in Huntcliff. Um, they say there are really three buckets of associations. Those-- Well, all those since 1994 are already in the statute. Before 1994, then you look at their covenants to see if they can opt in. And the majority have amendment provisions, and they're at the two-thirds level or the seventy-five percent level.

324. 0:58:55

     In the third bucket are Huntcliff and associations like Huntcliff, where there's no amendment provision. So why, why is that? Well, homeowners don't write their covenants. Real estate developers do. Hope there are no real estate developers here. Okay. We'll find out.

325. 0:59:18

     And they prepare their covenants to protect their interest naturally. And while they're in the neighborhood, and they own lots, and they're building and marketing, they don't, uh... There, there's no incentive for them to provide for an amendment provision, and, and in many cases, they have not. So this is known in the industry as the set it and forget it problem. It's set, it's forgotten, the developer leaves, the neighborhood's stuck with the covenants as written. And for Huntcliff and others that have no ability to amend, our covenants are in place for eternity.

326. 0:59:52

     Um, so how prevalent is the problem? Well, if you look at a The, the development of planned communities took off nationwide at the middle of the 20th century. And if you look at a graph, there's a bell curve that shows that many of them were formed between the '70s and the '90s. So, and Georgia has over 11,000 homeowners associations. So a significant portion of them predate 1994. Now, not all of them are like Huntcliff that have no amendment provision.

327. 1:00:24

     What I'm saying, there's a, there's a large number of associations that are still not, have still not opted into the Property Owners Association Act as far as we know. There's no central filing, uh, of covenants. There's no database. I've talked to a number of lawyers that represent HOAs as their primary business. They all have seen it frequently enough to have named it the frozen covenants problem. Um, there is a precedent for this.

328. 1:00:56

     This, exactly what we're proposing here was done in 1990 relative to the Condominium Act. Condominium Act was put in, enacted in 1975, had the same defect. In 1990, the Georgia legislature solved that issue by allowing for a mender, a m- a member of approved op- opt-in to the, to the statute. So, uh, in summary, this House Bill 664 provides simply an alternative way for a homeowners association to opt into the act by a member approval on the sta- the, the, uh, act, the bill as written is at 80%.

329. 1:01:37

     Um-

330. 1:01:38

     75.

331. 1:01:39

     Oh, 75. Okay. Um, it will finally provide many associations access to the s- to the state's statutory solution for homeowners association. And I appreciate your patience, and I appreciate your support for the bill.

332. 1:01:57

     Okay. All right.

333. 1:02:01

     So last year when we had this bill, um, it's, the amount was 80% approval, and there was a suggestion by the committee that that should be lowered since it's such a high threshold to meet. And I wanted to lower it to, I think, the suggestion was two-thirds. And then Mr. Zamier came back and said that other surrounding neighborhoods and kind of the standard in that industry is 75%, that we shouldn't lower it any l- we shouldn't make it any less than that because there would be other subdivisions that would challenge then their own covenants, and it could bring more legal action.

334. 1:02:36

     So they suggested, he suggested 75%.

335. 1:02:39

     What happens is a homeowners association gets in a lawsuit with a homeowner, and the lawyer's smart, and he looks, he would look at this bill. And this is what happened in the condominium situation where they set it at 80. But I've checked with these lawyers. They say, "Look, it never goes higher than 75." So if you set this at 75, ev- anyone who's 75 and lower, and they're all 75 and lower, it's, they're actually between 66 and 75. Um, for them, you're changing the deal.

336. 1:03:11

     You're changing what the neighborhood has got as their rule. For associations like Huntcliff, um, you're, you're, you're giving us an opportunity to correct our issue with 80. So the Con- Condominium Act, uh, the amendment in 1990s never been challenged. And the l- outside lawyers that we consult with said that they wouldn't lower it more than 75.

337. 1:03:37

     Okay. All right. Um,

338. 1:03:42

     Chairman, go ahead.

339. 1:03:43

     Thank you, Mr. Chairman. Let me just preface these statements by saying there's nothing more frustrating than a guy who walks in late to a meeting and starts asking questions that have already been answered by testimony. So if that's what I'm doing, I, I, I beg your, your patience. So I g- Is, is the issue then that you've got, um, property owners associations that have covenants that effectively cannot be amended, and being able to opt into the act would be beneficial because then it would provide a vehicle for amending, provided that a significant, substantial super majority are okay with the amendment?

340. 1:04:18

     Right. And that, this is the part I left out. And there's, there's a paragraph here that covers this.

341. 1:04:22

     Okay.

342. 1:04:22

     Because for Huntcliff, what are the two... They're all-

343. 1:04:25

     And, and is this a case you're referring to, Huntcliff, or is it-

344. 1:04:27

     No, it's a neighborhood.

345. 1:04:28

     Okay. Okay.

346. 1:04:28

     And, and that's, uh, where I live. So, um, there are all these benefits to being in this statute. One of it is it gives you the sort of a leg up when you're s- you're chasing down homeowners that don't pay their assessments. But the other benefit is, uh, there's a provision in the statute that says, no matter what your covenants say, if you get 80% of the people to approve it, it's, you can, you can pass an amendment. Now, right now, that doesn't really operate well for anyone because if I'm not in the club, the club meaning I'm in the statute, I can't use that clause.

347. 1:05:08

     Right.

348. 1:05:09

     And I've just mentioned that all the ones that have amendment provisions are 75% or lower. They don't need it. But if we get, if this bill passes, associations like ours will then begin to amend their covenants to add an amendment provision. If that-

349. 1:05:25

     Through the device allowed by this bill?

350. 1:05:27

     Bill. No, through the device already in the statute. So I'm just trying to get into the club. Once you're in the club, there's another rule that's been there since 1994 that says, this is not for getting admitted into the club, this is being in the club. Uh, where you can, m- whatever your covenants say, you can always, uh, amend them if you get 80% of the homeowners to approve.

351. 1:05:52

     And is that in the e- existing law?

352. 1:05:55

     Yes.

353. 1:05:56

     Okay. And so that is-

354. 1:05:57

     But I can't use that to get in the club.

355. 1:05:59

     Right. So that's-

356. 1:05:59

     I'm trying to get in the club

357. 1:06:00

     ... that is the provision of the act that would be beneficial to have applied, but if you haven't opted to be subject to the act, you can't use it.

358. 1:06:07

     Right.

359. 1:06:07

     And this bill allows you a device by which you can get-

360. 1:06:10

     Get in

361. 1:06:10

     ... into the act.

362. 1:06:11

     Yeah. Yes.

363. 1:06:12

     Okay. Thank you.

364. 1:06:14

     Thank you, Mr. Chairman.

365. 1:06:19

     Representative DeKepper.

366. 1:06:19

     And the only reason you're not in the act is y'all existed before 1994.

367. 1:06:24

     Right. The only reason we're not in the act is we, you know, we, we, we reformed in 1966. And so, and all, all the homeowners associations that are pre-1994 have got to, uh, elect to opt in. I think developers and, and, uh, since 1994, it's just w- we're routinely putting it in the covenants. So all these neighborhoods younger than 19... older... yeah, younger than 1994 are already in the statute because it's in, in their covenants.

368. 1:06:56

     And we think, not just y'all, but you think most that were pre-1994 wanna have this option too?

369. 1:07:07

     Well, most that are pre-1994 probably have provisions that allow them to amend their covenants. We're not asserting that it's a majority, but we anecdotally, these lawyers say they run across this all the time. They call it the frozen covenants problem. Your covenants are frozen. So, so I don't wanna say that. But anyone, any neighborhood, uh, and these neighborhood associations, they don't, I mean, um, they don't typically come to amend the statute.

370. 1:07:40

     Right.

371. 1:07:41

     They don't have the equipment. They, the... These are all people that have careers, families, but they don't get into all that. They have volunteer lawyers like me. Volunteer lawyers. So in any event, yes, I think a- any association like ours would want this ability.

372. 1:07:56

     Okay.

373. 1:07:57

     Um-

374. 1:07:59

     I just don't know a lot about these, and I'm trying to get my head wrapped all around them. It doesn't sound unreasonable. I just don't know enough about them to know if I'm wrong.

375. 1:08:07

     No, you have good questions.

376. 1:08:11

     Vice Chair.

377. 1:08:12

     Appreciate you coming and testifying. Two, two questions. Um, the frozen covenant issue, is that something that you've seen in the practice of law to affect other things? I think Gwinnett Place Mall, one of the failures there was that they were frozen by covenants from the '80s, and they, they had too restrictive of a landscape on their uses, and they couldn't amend it because they purported to be perpetual. But have you seen that throughout your career being a-

378. 1:08:39

     Okay, I-

379. 1:08:40

     ... a problem that's presented here?

380. 1:08:41

     I wanna be truthful. I'm an M&A lawyer.

381. 1:08:44

     Okay.

382. 1:08:44

     I was at Jones Day for 40 years, so. Uh, but I've been talking to H&O, H... We have a law firm that represents us. They're not here today, and we can't afford them.

383. 1:08:53

     Okay.

384. 1:08:54

     So, um, but I've, I've spoken to two different law firms that are just including ours, and they're just all over it, and they say they see this problem-

385. 1:09:01

     Yeah

386. 1:09:01

     ... all the time. It may be the problem-

387. 1:09:03

     That's what I was-

388. 1:09:03

     Sounds like the one in Gwinnett.

389. 1:09:04

     That's what I was trying to elicit. That, um, if you're stuck with covenants, uh, and reciprocal easements that are perpetual, that could take a property down and create problems. Um, the second question I had, um, you're the biggest neighborhood in Sandy Springs, and while you're here, I wanted to ask you a question pertaining to a bigger issue we've got this year. But are your property tax matters in the biggest neighborhood in Sandy Springs acceptable or too high?

390. 1:09:31

     I'll leave that to the president. I don't know a lot. Let's see.

391. 1:09:34

     Everybody wants lower taxes, right?

392. 1:09:36

     Well-

393. 1:09:38

     Yeah, obviously we'd, we'd prefer lower taxes. I wouldn't, I wouldn't say there is an uprising or, or a groundswell against them. I, I, I think everyone has looked around for the last five years and saw inflation and saw home prices increase in value. I, I don't hear about that as much as I hear about other topics you might expect in an, in an HOA.

394. 1:10:01

     We raised our assessment just a couple years ago, so we don't have a lot of leg to stand on. I mean...

395. 1:10:08

     And I do wanna say we are forever grateful for our volunteer lawyer. That's- The, the, the, the part about not being able to afford counsel is, is completely accurate, but we are grateful for Mr. Zamer.

396. 1:10:19

     Okay.

397. 1:10:22

     All right. I don't see anybody else. Thank y'all. Does anybody else that had a comment on this bill before we go on? I don't see any.

398. 1:10:34

     I just got here. Start over.

399. 1:10:39

     I'm sorry. You gotta catch up.

400. 1:10:42

     I got to.

401. 1:10:42

     All right. Um, what's the will of the committee?

402. 1:10:45

     Move it back.

403. 1:10:47

     Second.

404. 1:10:48

     I got a mo- motion and a second. Any further discussion? All those in favor say aye.

405. 1:10:54

     Aye.

406. 1:10:54

     Any opposed? All right, your bill passes.

407. 1:10:57

     Thank you very much.

408. 1:10:57

     Thank you.

409. 1:10:59

     Thank you, gentlemen. I wanna, I wanna try and get this one done. All right. Uh,

410. 1:11:14

     Chairman, Chairman Momtahan, you ready?

411. 1:11:17

     Yeah.

412. 1:11:17

     Yeah. The la- Yeah, the, uh, that's-

413. 1:11:32

     Go up. I can go if you want me to.

414. 1:11:34

     Try that one again. There you go.

415. 1:11:37

     There we go. All right. Thank you, Mr. Chairman.

416. 1:11:41

     Mm-hmm.

417. 1:11:42

     Members of the committee, we have a, uh, slow cooker here. This thing is, uh, finally tender enough to, uh, get heard. We filed this, uh, in the last year, so this is its, uh, last go round in this biennial. Uh, this is House Bill 792, LC 48, 1588. Uh, I'm proud to have some pretty strong co-sponsors here. Uh, Chairman Gunter, if anybody knows who that is. Uh, Tyler Paul Smith, of course, Vice Chair Hong, and, uh, Chairman Scoggins here.

418. 1:12:14

     Terrible road.

419. 1:12:15

     It's a very good crew. Um, this is a very complex bill, as you can tell. It's many pages. Um, on line 13, it strikes 15,000 for 30,000. And what the bill does is it increases the monetary limits for magistrate courts in the state of Georgia. So if you have a claim, uh, that was $15,001, it would have to be taken to the state court or the superior court in the state.

420. 1:12:46

     And so we're aiming to change that. As a little context and background, this has been brought to me by several magistrate judges over the years that I've served here in the Gold Dome. Uh, it's been brought to me as an issue by constituents. They feel like, you know, there has been a, a sort of desert of claims between 15 and 25,000, where everyday citizens have access to courts. And so we wanna make sure that we, uh, still have a reliable access to courts, uh, as the cost of products, uh, over the last 15 to 20 years have risen in our marketplace, including stuff like vehicles and other durable goods.

421. 1:13:32

     And we just wanna make sure that, uh, we're keeping up with, with those, those, uh, inflationary, uh, type rates. With that, I'll yield for questions. I, I do wanna let the committee know that, you know, I'm, I'm very flexible on this bill. I know that, uh, gosh, I gotta put a dollar in the jar here. I'm not an attorney. Many of y'all operate in this space, but I do think there is a desert here that needs to be addressed, and I'm looking forward to the wisdom of this committee and many folks who are in these brown chairs out here to come up here and help us, uh, with this bill.

422. 1:14:07

     Okay. Um, what you got? Yeah, I will. Just a second. Um, sorry. So the 30,000, what's significant about that?

423. 1:14:19

     So the 30,000 was a, was a good round number near the inflationary number. So if we just follow the rate of inflation, that's how we got to the 30,000 number. If I recall, uh, it has been some time on the slow cooker here, Mr. Chairman. So I, I think the number was 31,000 in some odd cents, and so we just pegged it at 30,000, which is the b- the lower, um, rounding, just rounding it down to 30,000. But, uh, really, I think there has been some input that I've gotten from, uh, the different courts, superior courts, and, uh, many of the folks who are advocating, uh, for this issue here, that, uh, there could be a better method.

424. 1:15:02

     Um, I have heard the number 25,000, as the 15,000 number was tied to the, uh, the minimums on the insurance, on liability insurance. So it may be wise to use the same kind of logic, I think, Mr. Chairman, maybe to tie it to 25,000, and I'd be open to an amendment if somebody wanted to offer that.

425. 1:15:32

     Any further discussion on the bill? Yes. Representative Love.

426. 1:15:39

     Do you have any idea the last time this amount was raised?

427. 1:15:43

     Well, I have heard that there was a very wise gentleman who may have changed this in the past, and I forget his name, but maybe you could tell the committee who that was.

428. 1:15:54

     Well, they might question how wise the gentleman was if I did that.

429. 1:16:03

     All right. Um,

430. 1:16:08

     anybody want to come up and talk? Judge Burns, come on.

431. 1:16:19

     Good morning. Good morning, and it's just Bob. I'm not a judge, but, uh, my president is Judge Greg Sapp from Chatham County State Court, and he sends his apologies that he cannot be here. Uh, he has trial week this week and could not be here today. I am Bob Bray. I'm the executive director for the Council of State Court Judges, and I believe we have shared with you a, uh, position statement from the Council of State Court Judges on this particular bill.

432. 1:16:50

     Um, so you should have that in your folder.

433. 1:16:53

     Mm-hmm.

434. 1:16:54

     Basically, all we're, we're saying is small claims. These are-- We're talking about small claims court. Uh, the National Center for State Courts defines small claims court as an informal, fast-paced, and affordable legal venue designed to resolve minor monetary disputes, typically under $10,000 to $15,000, depending on the location, without requiring an attorney. Most of these types of cases are gonna be landlords withholding security deposits, mechanics failing to fix a car properly, or small personal loans.

435. 1:17:32

     So, um, what we're saying is the $30,000, we don't oppose the bill, but the $30,000 to us is not a small claim. Um, magistrates serve a very important service to the citizens in their community. However, of the 520 magistrates in Georgia, the vast majority are not lawyers. What we are advocati- advocating is using, uh, a reasonable and rational approach to determine the jurisdictional limit in magistrate court.

436. 1:18:07

     We're proposing that the minimum liability coverage in an automobile insurance policy be the guide, and that amount has changed from $15,000 to $25,000. Um,

437. 1:18:22

     there is a corresponding bill in the Senate that we've also been talking about, which wants to try to raise that to $50,000 I bought a new car eight months ago. It was $50,000. That's not a small claim. Um, lastly, uh, the state and superior courts receive appeals from the magistrate court, and, uh, we feel that this is going to increase because the amount of disputes is increasing, and disputes increasing is gonna increase the number of appeals in, um, state and superior court to handle those.

438. 1:19:02

     Uh, also, my judges have spoken with some of the magistrate court judges who are not really in favor of the bill because they feel it's going to create more caseload for them, and they're gonna have to require more ca- Um, they're gonna require more resources, so they're gonna have to ask for more judges on staff to handle those cases. So, um, in our humble opinion, we're okay with, we're okay with an increase, but we feel like a good way to measure that would be the measurement from the statute on insurance.

439. 1:19:35

     Okay. All right. Um, Bob, I'm sorry for giving you that demotion, so

440. 1:19:44

     Oh, you're too kind. Thanks.

441. 1:19:46

     Who, who got 13?

442. 1:19:48

     That's, that's me, Mr. Chairman.

443. 1:19:50

     All right.

444. 1:19:50

     So I think what I got ... First, I wanna tell you, I, I, I appreciate the service state court-

445. 1:19:56

     Thank you

446. 1:19:57

     ... you provide to our state. I think they're a great option for a lot of communities. I wish I had one in Polk County, but my coun-

447. 1:20:03

     We're working on that

448. 1:20:04

     ... my county commissioners are too cheap to pay for anything.

449. 1:20:08

     I'm sorry.

450. 1:20:09

     Me too. Um, and so I also have constituents that deal with, uh, you know, these situations where, where small claims aren't what they used to be, right? And I, uh, I had a constituent reach out to me recently who, uh, through the context of a automobile accident, they were, uh, arguing about the value of their vehicle. And, uh, one of the unsavory auto insurers is jerking them around, as, as they tend to do, and so they were around $25,000.

451. 1:20:46

     And so what ended up happening is they're, they had to file a lawsuit in superior court 'cause that's all we have in our area. And I just think, you know, it would be a lot more efficient for our system if we had that, that relief in a, in a court like a, like a magistrate, especially where you don't have a state court-

452. 1:21:02

     Right

453. 1:21:02

     ... as an option. But I appreciate y'all-

454. 1:21:05

     Well, thank you

455. 1:21:05

     ... being supportive of a $25,000-

456. 1:21:07

     Yeah

457. 1:21:07

     ... increase.

458. 1:21:08

     We, we looked at other states. Uh, other states, they range from $2,250 up to $25,000. The states of Tennessee and Delaware, I believe, have $25,000. But $30,000 would be above any other state.

459. 1:21:27

     Okay. All right. Vice Chair.

460. 1:21:32

     Mr. Bray.

461. 1:21:34

     Yeah.

462. 1:21:34

     A couple of years ago, we got to work together.

463. 1:21:36

     Right.

464. 1:21:36

     Uh, it came through this committee, 1512, 122, about six-person jury trials in state court.

465. 1:21:42

     Right.

466. 1:21:43

     And 50,000 was where it ended up-

467. 1:21:45

     Right

468. 1:21:45

     ... after the Senate. And we-

469. 1:21:47

     Can we bring it back up to 100,000 now?

470. 1:21:49

     Well, uh, I was about to say, we sent it to the Senate at a higher number. They lowered the number.

471. 1:21:55

     Mm-hmm.

472. 1:21:55

     And so when I'm hearing this about possibly lowering the number here, I'm a little bit reluctant to do that knowing that-

473. 1:22:02

     Yeah

474. 1:22:02

     ... you know, in recent years, we sent a higher number over to them, and they knocked it down. Um, and then on, on appeals, you mentioned appeal. You're talking about the petition for review where if-

475. 1:22:13

     Right

476. 1:22:13

     ... things go bad in magistrate court, whether the claim's, you know, currently 25,000 or 15,000. If we change it to 25 or 30 or 50 or whatever-

477. 1:22:24

     Right

478. 1:22:24

     ... um, if things don't go right in magistrate court, they can file a petition for review to state court and have a jury trial, right?

479. 1:22:31

     Mm-hmm.

480. 1:22:31

     Or superior.

481. 1:22:32

     It's a little different now under the petition for review. The way they changed the appellate practice for that, uh, was it last year or the year before? It, it's a little bit different. It is a little bit different. So they don't necessarily get another trial de novo on the, on the issue sometimes, from what I understand from my judges.

482. 1:22:50

     But under cert-

483. 1:22:50

     You, you would know.

484. 1:22:52

     Under, uh, in magistrate court, you don't have a jury trial.

485. 1:22:54

     Right.

486. 1:22:55

     But if you appeal a claim that-

487. 1:22:58

     Right

488. 1:22:58

     ... substantive law says you have a Seventh Amendment right to trial by jury-

489. 1:23:02

     Right

490. 1:23:02

     ... then, um, on that appeal-

491. 1:23:04

     Right

492. 1:23:04

     ... the petition for review to state or superior court, the court gets to examine that jury trial demand.

493. 1:23:10

     That's right. Yes.

494. 1:23:11

     And so you, you basically do get a do-over. Um, it's not an on the record, uh, appeal.

495. 1:23:16

     Right.

496. 1:23:16

     You get to try the case over if things-

497. 1:23:18

     Right

498. 1:23:18

     ... don't go the way you want it in magistrate court.

499. 1:23:21

     Right.

500. 1:23:22

     But if the plaintiff and the defendant, if they can live with the result in magistrate court, you're done with that claim in a relatively short amount of time.

501. 1:23:30

     Right.

502. 1:23:30

     Okay. Thanks.

503. 1:23:31

     That is correct.

504. 1:23:32

     Judge Scoggins.

505. 1:23:33

     Okay. Mr. Bray, how many, uh, state courts are, are in counties? How many counties have a state court?

506. 1:23:38

     We have 72 state courts in Georgia, which means there are 87 that do not.

507. 1:23:44

     Okay. Um, just to feed off what Representative Kelly said, I think the 87 counties that don't have a state court would really benefit from this, uh, law change. I think that-

508. 1:23:54

     I agree. Uh, understanding that in those 87 s- Let me put it this way. In the 72 counties that have state courts, they provide access to over three-fourths of the population of the State of Georgia. So in the 87 counties that do not have a state court, that's less than a fourth of the population of the state. And in those counties, you're gonna find that those magistrate court judges are not lawyers, and so it becomes a little more challenging to have these types of cases.

509. 1:24:23

     Okay. Thank you very much.

510. 1:24:24

     Okay. All right. And Representative Westbrook.

511. 1:24:27

     Thank you, Mr. Chair. I am just curious, as we talk about tying the jurisdictional limit to one category of cases, what percentage of cases in mag court are motor vehicle accidents?

512. 1:24:42

     I wouldn't know. No, no estimate even? I, I have no idea what magistrate court cases are other than small debts and claims. Okay. Thank you.

513. 1:24:56

     All right. I don't see any other questions. What's the will of the committee? Do pass. Second. Motion and a second. Any further dis- you have an amendment? Uh, see if that works. Number 16. It's okay, yeah. 16 I don't think works. I can try 17. 17. Yep, there you go. All right. Thank you, Chairman. Um, thank you. A- after conferring with magistrate court judges and state court judges on this bill, I know we've seen this many times, and I believe this is a friendly amendment.

514. 1:25:31

     I'd like to amend line three, um, and change 30,000 to 25,000, and on line 13, uh, change 30,000 to 25,000. Um, and I'd like to ask if, um, Chairman Montahan, is this a friendly amendment? It is. Yeah. Thank you. Absolutely. I think, uh, if I may, Mr. Chairman. Yeah. Oh, I'm sorry. If I can get this thing working here. Let's see. Ta-da. Well, hang on. What, what number is it?

515. 1:26:02

     I, I don't, I ne- it doesn't even have one. Oh, there it goes. There you go. Okay, there you go. Thank you. I, I, I do take this as a friendly amendment. You know, I think to the testimony we've heard today, they definitely hate the 50,000, but they don't necessarily love the 30,000. So in English, we have a binary choice. I found out that in Greek, there's eight words that describe love. And so I'm just trying to look for one of the eight. I don't need the binary choice. Mm. And so I appreciate that the 25,000 is probably, uh, we'll call it pragma.

516. 1:26:37

     It's a mature type of love. And, uh, we'll go with that for today. Thank you, Mr. Chairman. And looking forward to, uh, the passage of this bill. Well, thank you for that lesson. All right. Um... Motion to pass on the amendment. Okay. Second. And second, okay. Second. Motion and second on the amendment. Any further amendments before we go forward? Hearing none, all in favor of this amendment say aye. Aye. Any opposed? All right. That, we have the amendment on it. Now as to the bill, did I get a m- Yes ...

517. 1:27:10

     motion and a second? Okay, thank you. Um, all those in favor of passage to the bill as amended say aye. Aye. Any opposed? Okay. Bill passes. Thank you all very much. Appreciate it.

518. 1:27:26

     All right. So that one. All right. If I get home. Oh, you want to get that one? I don't know. Let me... How long is this gonna take? Five hours. To hold? I know. Maybe three minutes. You think? Okay. All right. We'll call that one. House Bill 1160, Representative Crawford.

519. 1:27:51

     Now let's, let's try to move quick, please. Thank you, Chairman. Is it okay if I sit here? Yes. You're right ahead. All right. Thank you. Before you is House Bill 1160. You should be reading from LC492663S. Uh, the bill is pretty straightforward. In Georgia, generally, someone who brings a civil suit has two years from the time of that injury to bring that lawsuit. If they are a victim of a criminal act, the statute of limitation tolls for the victim, so prosecutors can investigate fully.

520. 1:28:24

     However, if that victim passes and a family member brings a wrongful death claim, that statute of limitations does not toll. This bill would be congruent with making sure that the statute of limitation tolls for the victim, for the surviving family member. That's the bill. All right. 17. Representative Hong. Thank you, Chairman, and thank you, Representative, for the bill. Um, on line 13, when we were going through the code section, and I understand that this has to do with criminal prosecution, um, or for tort actions while criminal prosecution is pending.

521. 1:29:06

     Are we... Uh, when I look at that section 19-7-1, um, I know the first s- A and B are just mostly talking about, I believe, custody issues. W- was it your intention to, uh, to, uh, reference the homicide section, which is C of that code section? Y- you're right. Thank you, Representative Hong. If you look at code sect- if you look at Section C within that code section, it's, it's specific to homicide of a child or minor.

522. 1:29:42

     And so I would, if there is an amendment, I can change that section, as opposed to the general statute reference 19-7-1 Section C. Thank you.

523. 1:29:58

     Okay.

524. 1:30:01

     All right. I don't see any other questions for the author. What's the will of the committee? Move, do you pass. Second. All right. Got a motion and a second. I have an amendment. Amendment. All right. Go ahead. Uh, I amend to add on line 13 after 19-7-1 parenthesis C. Okay.

525. 1:30:27

     All right. Any questions about it? All those in favor say aye. Aye. Mr. Chairman? Did we have a motion? Let me... I want to make clear about that. Can I suggest a, a different way to word that? Sure. If I would have your... Sure

526. 1:30:44

     Uh, it would be, we'd actually refer to that as subsection C of code section 19-7-1 or code section 5142 or

527. 1:30:57

     Okay. You-

528. 1:30:57

     I'm sorry. Say that-

529. 1:30:58

     ... just made that a lot more complicated.

530. 1:30:59

     Yeah. Say that again.

531. 1:31:00

     Sorry. Uh, yeah, we do not, we do not make citations where we would say the code section followed by that. We-

532. 1:31:07

     C or-

533. 1:31:07

     We would refer to this as subsection C of code section 19-

534. 1:31:11

     Oh, I see

535. 1:31:11

     ... dash seven dash one or-

536. 1:31:14

     Or

537. 1:31:14

     ... code sections 514, uh, or code section 51-4-2 or 51-4-4.

538. 1:31:24

     Okay.

539. 1:31:26

     All right. Vice Chair Reeves.

540. 1:31:27

     And Representative Crawford, is that agreeable, and does that keep the bill intact with the mission of the bill?

541. 1:31:34

     It does. Thank you. Thanks.

542. 1:31:35

     Okay. All right. All right. Let me make sure we had a motion and a second on this. Did, do we have that?

543. 1:31:43

     Motion.

544. 1:31:44

     All right.

545. 1:31:44

     Second.

546. 1:31:44

     And we have... All right. Thank you. Everybody understand the change, the amendment? Any further discussion? Hearing none, all those in favor say aye.

547. 1:31:55

     Aye.

548. 1:31:56

     Any opposed? All right. We have it with that amendment. Uh, have a motion and a second on the bill. Any further discussion on that? Any other amendments? Hearing none, all those in favor say aye.

549. 1:32:09

     Aye.

550. 1:32:10

     Any opposed? All right. That passes.

551. 1:32:13

     Thank you.

552. 1:32:14

     Okay. All right. Gosh, we got to the last one.

553. 1:32:23

     Ms. Hong.

554. 1:32:24

     Thank you, Chairman. Um, and members of committee, I bring you HB 1024. Um, this was actually passed out of committee last week, I believe, and has been sent back from Rules, um, mainly because of the discussions that we've had about this bill. Um, so to recap, this is regarding bankruptcy homestead exemptions. This exemption has not increased for about 11 years, and so I am proposing to increase the exemption from 21,500 for individual debtors to 50,000, and for joint debtors to 100,000.

555. 1:33:05

     There were discussions about, um, how the federal exemption has an index, so looking at the inflation rate, and, um, so therefore, we don't have to come back every year, every however many years, o- and/or, um, not come back for over a decade and look into, um, the exemption. So we included, uh, on this sub, which is LC 620410S, we included an index, uh, which will start in five years, um, based on the inflation rate.

556. 1:33:43

     I will take any questions.

557. 1:33:44

     What, what line is that?

558. 1:33:45

     Um, the, uh, index will start on line 18.

559. 1:33:51

     Okay.

560. 1:33:51

     Provided that beginning, uh, July 1st, 2031, and then beginning on line 25, um, there's a definition of the inflation rate.

561. 1:34:01

     Gotcha. All right. Thank you. All right. Vice Chair.

562. 1:34:05

     Is Thomas Jennings Weaver here?

563. 1:34:07

     No.

564. 1:34:08

     All right. Well, I wanted to just let him know we got the letter, and it's good to get a, a hard copy letter, uh, on bills like this, so we heard from you.

565. 1:34:16

     Okay. All right. And I cut you off. All right, go ahead.

566. 1:34:23

     Thank you. Uh, my only question, I, I agree with, um, what you're trying to do, is how will the public know? Like, the statutes, it's easy because that's in the code book, but for, um, the change over time, how would that be published so just an interested person or a practitioner would be able to, to access the information?

567. 1:34:42

     So just as, um, just as anyone who is representing themselves in court, they'll have to look at the statute, figure out the inflation rate, and just as an attorney would, uh, is, is what... Is that your question as far as when somebody is filing pro se bankruptcy, how would they know the exemption?

568. 1:35:03

     No. I, I was wondering if, like, a state agency might just publish what it is in terms of, um, on an ongoing basis, but your point is well taken, is that is a different way to do it, and they could just demonstrate that, um, by calculating it. Okay. Thank you.

569. 1:35:18

     And I, and I know that, um, there are, you know, till interest rates and things that we use in bankruptcy court. I know our district court doesn't do it, uh, but I know there are different district courts when certain rates that we have to use under p- a petition, they'll post it online, so maybe that's something that the courts can look at as well.

570. 1:35:38

     Okay. Thanks.

571. 1:35:40

     Okay. Vice Chair.

572. 1:35:41

     In, uh, in looking at the bill, it looks like there is a reference to the revenue commissioner, and that reminds me, I don't know if that's the same language as the House Bill 481 opt-out index, but looks like it's similar to that. So I would think you could contact the commissioner or maybe if it's posted on a website. But I like this index, so we won't have to deal with this again.

573. 1:36:02

     Okay. Thank you.

574. 1:36:03

     Okay. All right. Any further discussion? All those in favor... Well, not in favor, but-

575. 1:36:09

     There's-

576. 1:36:09

     Excuse me, sir. I had signed up to speak.

577. 1:36:11

     Oh, okay. I'm sorry. Come on ahead.

578. 1:36:16

     Good afternoon.

579. 1:36:16

     You're Mr. Gordon?

580. 1:36:18

     Yes.

581. 1:36:18

     All right.

582. 1:36:19

     And this is Mr. Petty. Um, uh-

583. 1:36:22

     The committee already heard from me so

584. 1:36:23

     ... I was out of town last week. Uh, I'm Neal Gordon. I'm an attorney in town. Most of my career at Arnold Golden Gregory, the last, uh, three and a half years at Taylor English Duma, now Taylor Duma. Um- I'm recognized as one-- I was one of only two, uh, experts in exemption law in Georgia. Now I'm the only one left 'cause, uh, Dean Gerth from the Georgia State University Law School, who was an expert in personal bankruptcies and exemption law, has retired. Uh, we are the two experts that the Senate study committees would, uh, hear from whenever exemption law would come up as an issue there.

585. 1:36:56

     Um, I'm a past president of the National Association of Bankruptcy Trustees. Uh, I served many years as chair of the legislation committee for the American Bankruptcy Institute. Um, I'm one of only nine Georgia practicing attorneys who are fellows in the Ameri-American... I've got a cold, so excuse me. American College of Bankruptcy. Um, I've testified, except for two years ago, uh, when this bill came up similarly. Uh, I was not available. Uh, but every time it's been in the Senate, I've been called on to testify, and I, and I have. Um, um, y- I'm very much opposed to the bill, uh, as it's presently drafted for a lot of reasons.

586. 1:37:32

     Um, the bill is like the bankruptcy code itself. It's supposed to be a balance of interests, debtors, creditors, other constituencies. Um, it's a national uniform bankruptcy code with one exception, and that's exemption law, where you can go state by state, and different states find different ways to balance the interests. You take a state like Florida, which people think is the least creditor-friendly state when it's actually the most creditor-friendly state, b- even though they have a virtual unlimited homestead exemption, and why is that?

587. 1:38:04

     Because they have no personal property exemptions. So creditors get paid actually more money in Florida than they do in other states because... But, but is that really fair? What is a Chapter 7 bankruptcy case? Well, it's a liquidation chapter. It's the chapter that's most often used in bankruptcy. When people file a Chapter 7 case, they're looking for what you've probably heard the term the fresh start, a fresh start in bankruptcy, and that consists of two components. One of them is you get to discharge all of your dischargeable debts, and you get to keep a certain amount of your property through exemptions, or some property is not even part of the bankruptcy estate anyhow, like a 401and IRAs are, are going to be, um, protected no matter what.

588. 1:38:49

     Um, that's how you get a fresh start, and states have interpreted this differently, how they're gonna give their constituents, their, their, um, residents a, uh, fresh start. In, um, a state like Florida, where they have no personal property exemptions, what happened was when the Great Recession came, which is the, about the time that we last, uh, really did a big increase in the homestead exemption, actually property values were plummeting. That's part of the problem with indexing it. You get these periods where they actually go down dramatically, not up, and we actually more than doubled the homestead exemption.

589. 1:39:24

     But in Florida, the homestead exemption didn't help anybody because property values fell so far there was no equity. Homestead exemption only attaches to the equity in a home. If there's no equity, there's nothing there. So it's beyond the mortgages, beyond all the encumbrances. They fell so far that it was of no benefit, and yet they had no personal property exemptions. And the trustees, we're trustees, they're going around, they're intercepting tax refunds, sweeping bank accounts, selling people's furnishings in moving vans, huge sales.

590. 1:39:56

     I think Georgia's much fairer. We have very high, among the highest personal property exemptions in the country. We're very closely modeled on the federal. The federal is a standard. Only a few states actually follow it, but a lot of them are modeled after it, and Georgia is one of them. The homestead exemption under the federal, even as indexed, is way below, way below what this proposal is. Um, and there's something else in this proposal that is, that came in about twenty-five years ago, and it's very strange. Every one of these increases in exemption law, every time it's been amended, it's been a matter of negotiation among the constituents, and I've been one of the people negotiating.

591. 1:40:34

     This was not negotiated. This was not presented. Um, it's more of a personal bill. You have just one side, just one constituent being heard, one constituent proposing it, my friend, Representative Hong. And, uh, you y- you have not heard at all from the other side, from the bankers or anyone else. And when you get to the Senate, everybody is talking about it, and a lot of times that's where the negotiation really takes place. But, but you ha- ha- you have way over and stated the homestead exemption compared to the personal property exemptions here in Georgia.

592. 1:41:06

     Um, so what happens when a trustee administers? First of all, very few homes are getting sold even at today's level. Um, I'm getting about, as one trustee in the Atlanta division, just so everybody knows, the Atlanta division is ten counties. It's not like Metro Atlanta. It's a ten-county area. I'm getting about twelve hundred cases a year. I sell about four homes. That's it, and that's with today's present. But that is enough to give us some good distributions to the Georgia Department of Revenue, the IRS, student loans, the Small Business Administration.

593. 1:41:40

     Uh, otherwise, it'd be the taxpayers who are going to have to, um, you know, eat that, and, um, that's, that's not right. There has to be this balance, this distribution. Uh, when somebody's neighbor loans them money, they want to get a distribution if they can. They don't want to see somebody living in a home with a hundred thousand dollars of equity that they can't touch, and it's not a hundred thousand dollars. That is a misnomer. When you say fifty and a hundred thousand, let me explain what you're really talking about. Today, at the present level, twenty-one thousand five hundred, I have to have seventy-five thousand dollars of equity on, on average before I can sell a home.

594. 1:42:14

     It's not twenty-one five. I've got to clear the mortgages and encumbrances. I've got to clear the exemption. I've got to clear the cost of sale, like the real estate commission. I've got to clear all the administrative costs. That's the trustee, the trustee's professionals of the bankruptcy case. And by statute, I still have to be able to make a meaningful def-- a meaningful distribution to the creditors, which is subject to interpretation. So it takes right now about seventy-five thousand dollars of equity if the person is single. before we can sell a home. That's why we sell so few of them.

595. 1:42:46

     Yes, sometimes people go into bankruptcy and they beg us to sell their homes. They know they're gonna get foreclosed. They can't afford the home. They don't want a foreclosure on their credit report, which is worse than a bankruptcy, if they ever want to own a home again. And so, yeah, we might, we might go ahead and do it and work something out. But by and large, you're talking about a huge amount of equity right now in Georgia before a home could be sold. You jack this up to 50 and 100, you're, you're, you're talking about no homes will ever be sold. Creditors will not get anything because our personal property exemptions are also very, very high.

596. 1:43:20

     Now, the Fed is indexed, just as Representative Hong says, but they're indexed from a much lower rate. I think the current Fed, um, is 31,000 or something like that, not 50 and 100. So you're talking about going way beyond what the federal exemptions are at present to do this, way beyond it. Um, two years ago, um, Representative Reeves was kind enough to put me in touch with a colleague of his, I think a law school classmate maybe, and, uh, who's on the debtor side, and we're on the other side, and we tried to work out what we thought was, um, an arrangement that neither side was happy with, just like a mediation.

597. 1:43:57

     Nobody's happy, but we thought we reached a result. The numbers were lower than what's proposed here, uh, but substantially higher than what are presently in the, uh, exemption code. And, uh, I was talking... If I just, I'll just use a first name. I was talking to Jason just the other day, and we said, "Whatever happened to you know, a couple of months ago?" 'Cause we thought we had it, uh, worked out. I talked to the bankers. I talked, when I, before I take my position, I don't just unilaterally do anything. Um, the National Association of Consumer Bankruptcy Attorneys is the organization that, um, has been pushing state by state to get these, uh, increased a lot, and they've been a very effec- effective lobbying organization.

598. 1:44:34

     They've gotten into some states where they have members on the legislature, and they've gotten increases that really weren't, um, subject to negotiation and weren't balanced. In some states like Kentucky, there are no bankruptcy trustees willing to serve. Some of them came actually to Georgia because they, they, the bill got passed before anybody really knew about it, and they can't administer the cases. They can't even get them administered. But, um, the Atlanta division is a real problem, this 10-county area. Uh, we now have close to a third. It keeps growing. It's from a quarter to a third are pro se.

599. 1:45:06

     I think, uh, you were mentioning pro se cases. And if you don't know what that means, it means they're not represented by an attorney. Their attorney is AI. Honestly, I'm not trying to be funny when I say that. And they're getting a lot of misinformation. They don't know what they're doing, and they're coming into court, and it's really been a disaster. They file objections to everything. They file motions that are frivolous. They ask for the judges to recuse themselves. They sue the judges. They sue the trustees. They file liens on our homes. They file liens on the judges' homes. The judges are represented by the US attorney. We're not.

600. 1:45:36

     And it's created an unbelievable amount of cost for, for people to serve. So we used to have 24 trustees in the Atlanta division. We're down to eight and a half. Nobody wants to serve. And this is going to put the rest of us out. I mean, I don't know what they're going to do, um, if you jack this up like this when we're already almost never selling a home to begin with because it's really, when you say 21,500, it's really 75,000 before we can get to the point where we can pay everything we have to pay, the exemption, and make a meaningful distribution.

601. 1:46:07

     So a lot of these homes end up going into foreclosure when they should have let us sell them, but we just can't. Um, and so that, that's what happens. But indexing, it's the wrong thing to do. First of all, so what if the inflation goes up? That doesn't mean that home prices are going up. The inflation index is tied to many different things. Uh, cost of living is many different things. And, uh, so the only thing that really would make any sense anyhow is if you had some barometer by which you can measure appreciation in the home, not what's going on in the general inflation rate.

602. 1:46:38

     So it doesn't really make any sense anyhow. But from where I sit and from talking to the, um, other constituencies other than the, um, the consumer debtor bar, and I exclude, um, Jason from this 'cause we had worked it out a couple of years ago, and we thought that was gonna go up to the Senate, and it didn't cross over as I recall, uh, uh, two years ago, and maybe we just lost track of where it was, where it was. Uh, but, uh, th- this is just way too much, way too aggressive. We have very, very high personal property exemptions already.

603. 1:47:08

     We're one of the most generous. I don't want Georgia to be one of the least friendly creditor states in the country, which is what it will become. Um, and, um, I'm really here also to answer any questions if anybody has any. But, uh, we are a great payer of dividends to the Georgia Department of Revenue and to the IRS and to the SBA and to student loans. Many of these are not dischargeable in bankruptcy. And actually, so they actually, it's not like, oh, we don't get any benefit from bankruptcy. We're paying money on debts that can't be discharged in bankruptcy, debts to the Georgia Department of Revenue, debts to the IRS, and often, most often, student loan debts.

604. 1:47:44

     So it's not like the people in bankruptcy are getting hurt by that either. That's actually a benefit to them.

605. 1:47:50

     Okay. All right. We're running up on a hard deadline, but I got just a few minutes. Anybody have any questions?

606. 1:47:58

     All right. Seeing none. Thank you, sir.

607. 1:47:59

     Thank you. I know it's dangerous to put a microphone in front of me.

608. 1:48:02

     Wait, wait. I got one now. Uh, Representative Holcomb.

609. 1:48:04

     Yeah. Thank you, Mr. Chairman. Just food for thought. Um, if, if it were to be a negotiation, I think you characterized it as 100,000, and I regret that you missed my diatribe about the whole bankruptcy process the last time. But, um-

610. 1:48:19

     It was moved.

611. 1:48:20

     Thank you.

612. 1:48:24

     What number would you suggest if, if it were to be a discussion in terms of where you think this should be?

613. 1:48:33

     Well, it, as it stands, it's 21,500 and double to 43,000.

614. 1:48:36

     Mm-hmm.

615. 1:48:37

     And Georgia has a provision that no other state has, and I've never understood. It was not some part of it, the original negotiation, just showed up in the bill. That is, if somebody's in bankruptcy and is married and their, their, their spouse is not a co-owner of the property, you still get a double exemption. We don't know where that came from. That's, it... And it's been abused in a really great way because a lot of people haven't seen each other for 20 years but are technically married, and they get double exemptions. But aside from that issue, uh, we thought when we were talking two years ago that 3060 was, um, or, or...

616. 1:49:08

     No, it was 3050, was it?

617. 1:49:10

     I think so.

618. 1:49:11

     No, that was, that's where we ended up. We were proposing, I think, 30, uh, 60, and then when we, um, spoke with the, um, uh, Representative Reeves, um, put us in touch with one of the attorneys he was dealing with on the other side, we ended up... He wanted more, we wanted less. We ended up at 3570.

619. 1:49:29

     Okay.

620. 1:49:30

     Without an index. Without an index, because we're going above the federal exemption quite a bit.

621. 1:49:37

     Okay.

622. 1:49:38

     3570 is where we were, uh, as a mutual... And, um, I don't know if you remember that differently, Representative Reeves, but that's, that's what I have my notes, in my notes. Um.

623. 1:49:49

     Go ahead.

624. 1:49:50

     I just remember that that bill didn't do enough for anybody to get over to the Senate. Um, I do know that, uh, Vice Chair Hong knows, uh, several times, uh, more than I do about bankruptcy. Um, I do know that Representative Evans, I think, had to go to another meeting, but she, uh, has been supportive of increasing this number, and Jason Braswell, uh, has followed up on it this year. So I'm fully in support of Vice Chair Hong. I think it's good, and I think having a stronger one will get it over to the Senate this year.

625. 1:50:21

     Well, I think they're kind of in the other direction, but that's all right. We'll find out. Uh, but that's, to answer your question, that's where we ended up two years ago, was 3570 through the negotiation process, and the bankers were advised of that as well.

626. 1:50:33

     Okay. All right. I think that's all the witnesses we have. Any further discussion on the bill? Representative Hong.

627. 1:50:41

     Yeah, if I may just, um... I don't have any questions, trustees, so this is just discussion for the committee. Um, so j- just, and I've, I've worked with both trustees for a long time. I know, um, the personal property issue had come up, uh, and I had presented a chart for you all with all of the exemptions from every state, and we all know that Florida has, has, um, unlimited exemption for homestead. Um, they, for personal property in, in Georgia, it's 5,000, and it's 1,000 for Florida.

628. 1:51:17

     Um, for a car, it's 5,000 and 5,000 in Florida. So as far as personal properties go, um, I believe there isn't too big of an, a distinction, even with states with unlimited exemption. And, um, to the point of Trustee Gordon, um, we did include, uh, in line 21, "And such property as the primary residence of both spouses," to address the issue of if both spouses were living versus both spouses having a, a title to the homestead.

629. 1:51:53

     Um, and as far as the index, we pushed it out to five years, um, due to the increase of what, where, where we are. I think the increase, um, frankly speaking, is, is very modest, and there were many numbers that were, uh, given that were higher. And, um, and this is the amount that I thought was reasonable that we would be able to, uh, get through committee and, um, through the floor. So I would, uh, request a favorable consideration from this committee.

630. 1:52:28

     Okay. All right. Um, Chairman Smith.

631. 1:52:31

     Move do pass at the appropriate time.

632. 1:52:34

     Go ahead.

633. 1:52:34

     Move do pass.

634. 1:52:35

     Second.

635. 1:52:36

     All right, got a motion and a second. Any, any amendments?

636. 1:52:39

     Yeah, I'll make one.

637. 1:52:40

     All right. Well, let me... Which one are you on?

638. 1:52:42

     I'll move it, but it's not my bill.

639. 1:52:44

     Try 16.

640. 1:52:46

     Well, it's not, but it works.

641. 1:52:48

     Only-

642. 1:52:49

     No, that's-

643. 1:52:49

     There.

644. 1:52:49

     It's your magic, Mr. Chairman.

645. 1:52:51

     Yeah.

646. 1:52:51

     You light up my life over here. And I appreciate you. Uh, so I have a question for the author. So in Florida, you said that they, on the, on the primary residence, it's unlimited. Is that correct?

647. 1:53:04

     Correct.

648. 1:53:05

     So that number 100,000 in Florida would not exist. It would just be you... That would be protected under Florida law.

649. 1:53:15

     You... Correct. You would... I don't have the mic, but yes. Whatever, whatever equity you have in your home is up, is protected when you file bankruptcy.

650. 1:53:23

     That's not Florida law. Florida law is virtually unlimited.

651. 1:53:26

     Well, I-

652. 1:53:26

     It's only a half to a half acre.

653. 1:53:27

     Question is for the author, sir.

654. 1:53:29

     Uh, thank you. Uh-

655. 1:53:31

     Thank you

656. 1:53:31

     ... so I, I'd like to propose an amendment to, on line 22, after the dollar sign where it says, "one," strike that and make it "200,000."

657. 1:53:44

     Okay.

658. 1:53:47

     Is that a friendly amendment?

659. 1:53:55

     Chairman, um,

660. 1:53:59

     I find the intent of the bill is to make sure that we have debtors that are filing, especially those who have been paying their mortgage, to keep their properties. Um, again, there were many discussions of the amount, where it should go up, and I thank you for, for increasing that and, and, at, for the spirit of the bill. However, I think the 100,000 would be a good increase at this point, given the index that we're putting in.

661. 1:54:31

     Well, Vice Chair Hong, uh, since, you know, you've got good reason and you've worked with this and you've worked with so many other people, I'll rescind that amendment. Uh, Vice Chair, we'll go with 100,000. I think that's pretty reasonable. Thank you.

662. 1:54:44

     Thank you.

663. 1:54:44

     All right. Thank you. All right, any further discussion? Any amendments? We're done with amendments. All right, thank you. Uh, all those in favor of this bill say, "Ah."

664. 1:54:57

     Ah.

665. 1:54:58

     Any opposed? All right, we're done. Thank you, and the meeting's adjourned.

666. 1:55:02

     It's time to get a color in one of them ties.

667. 1:55:04

     Yeah.

668. 1:55:05

     I got