--- title: Senate Regulated Industries and Utilities Committee, March 24, 2026 collection: meetings id: 2026-03-24/senate-regulated-industries-and-utilities cite_as: Senate Regulated Industries and Utilities Committee, March 24, 2026, video https://vimeo.com/1176563546 (machine transcript by Georgia Commons) canonical_url: https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities md_url: https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities.md text_url: https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities/text source_url: https://vimeo.com/1176563546 date: 2026-03-24 status: machine transcript corpus_version: meetings-2026-10-23-8c15ead0f18d license: Machine transcript and summaries by Georgia Commons from the General Assembly's public video; the video stays on the General Assembly's Vimeo channel; see about.md publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice. up: https://georgiacommons.org/meetings/2026-03-24.md previous: https://georgiacommons.org/meetings/2026-03-24/house-public-safety-and-homeland-security.md next: https://georgiacommons.org/meetings/2026-03-24/house-motor-vehicles.md index: https://georgiacommons.org/meetings/index.md chamber: Senate body: Senate Regulated Industries and Utilities Committee body_url: https://georgiacommons.org/meetings/senate-regulated-industries-and-utilities.md meeting_kind: committee session: 2025-2026 Regular Session start_time: 2026-03-24T10:00:00-04:00 location: 450 CAP duration_seconds: 8600.0 video_id: 1176563546 video_title: 03/24/2026 Senate Committee on Regulated Industries and Utilities agenda_url: https://www.legis.ga.gov/api/document/agendas/senate/RIUAgenda3.24.26.pdf bills_discussed: - HB 1027 - HB 187 - HB 34 summaries_model: gpt-6.1-sol transcript_turns: 551 transcript_chars: 124100 parts: - https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities.md?start=0 - https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities.md?start=59952 - https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities.md?start=119835 --- # Senate Regulated Industries and Utilities Committee, March 24, 2026 Senate Regulated Industries and Utilities Committee; March 24, 2026; 2025-2026 Regular Session. Video, on the General Assembly's Vimeo channel: https://vimeo.com/1176563546. Agenda: https://www.legis.ga.gov/api/document/agendas/senate/RIUAgenda3.24.26.pdf. > This is a machine transcript of the General Assembly's video, made by a speech-recognition model. It is not an official record and can mishear words, names, and numbers. Speakers are not identified. The video is the record: every timestamp links to the moment it plays. ## Summary written by Georgia Commons Written by gpt-6.1-sol from the transcript below. It is not part of the record. Quote the transcript or the video, not the summary. The committee considered three bills. It held action on [HB 1027](https://georgiacommons.org/bills/2025-2026/hb1027), which would allow longer electric-power contracts, after questions about whether added pricing restrictions would put municipal utilities at a competitive disadvantage. It approved a substitute for [HB 187](https://georgiacommons.org/bills/2025-2026/hb187) establishing rules for optional vehicle value protection agreements, voting 5-4 to send it to Rules. The committee also considered replacing [HB 34](https://georgiacommons.org/bills/2025-2026/hb34) with hemp-product restrictions, including THC limits and driving-impairment warnings. A convenience-store industry witness opposed that proposal, while members discussed product safety and impaired driving. After an initial 5-4 vote against passage, the chair voted to create a tie and said the proposal would remain alive for discussion at the next meeting. ## Bills discussed (3) Each account was written by gpt-6.1-sol from the stretch of the transcript it names. The bill's number is said in that stretch, unless it was the only bill on a committee's agenda. ### HB 1027. Local government; authorize certain long-term contracts for sale of electric power [HB 1027](https://georgiacommons.org/bills/2025-2026/hb1027) (2025-2026 Regular Session). From [0:22:52](https://vimeo.com/1176563546#t=1372s), turns 6 to 188. The sponsor said [HB 1027](https://georgiacommons.org/bills/2025-2026/hb1027) would extend allowable electric-power contracts for MEAG Power and participating local governments from 10 to 20 years to help them compete for long-term customers. The committee substitute added customer-paid generation costs and restrictions against charging large customers less than retail customers. For loads of at least 100 megawatts, the sponsor described minimum billing, credit, default and termination protections for other customers. The sponsor questioned the undefined retail-rate comparison and said different customer classes have different costs. One member supported the added protections; another warned that steady large loads can cost less to serve and that pricing restrictions could hinder competition. MEAG Power's chief executive said local retail rates vary, so the restrictions could exclude some communities from competitive bids. The executive estimated residential rates at 10 to 16 cents per kilowatt-hour and prospective data-center rates at 9 to 10.5 cents. The executive said longer contracts would help match borrowing obligations to customer payments without exposing communities to unpaid debt. Members explored removing pricing provisions or applying similar rules across utilities, but adopted no amendment. The chair held action for further review. ### HB 187. Professions and businesses; contractors; change certain provisions [HB 187](https://georgiacommons.org/bills/2025-2026/hb187) (2025-2026 Regular Session). From [0:58:00](https://vimeo.com/1176563546#t=3480s), turns 189 to 440. The presenter offered a substitute for [HB 187](https://georgiacommons.org/bills/2025-2026/hb187) using vehicle value protection language originally proposed in [HB 504](https://georgiacommons.org/bills/2025-2026/hb504). The presenter said these optional agreements would protect a buyer's cash investment or down payment after a loss, unlike gap coverage tied to an outstanding loan. The presenter described required disclosures, a 30-day cancellation period, financial-backing requirements and consumer-protection enforcement. Members questioned whether buyers needed another product, whether sellers could pressure consumers, whether the requirements favored particular companies, and whether benefits could encourage fraud. The presenter said purchases could not be conditioned on buying an agreement. A witness for the Guaranteed Asset Protection Alliance said nine states had statutory frameworks and that legal uncertainty discouraged the alliance's members from offering these products in Georgia. The witness said the proposal covered commercial as well as consumer vehicles, with prices roughly ranging from $400 to $2,000 depending on the vehicle and benefits. Responding to fraud concerns, the witness said benefits generally take the form of credit toward a replacement vehicle rather than unrestricted cash. The witness said enforcement would fall to the Attorney General's Consumer Protection Division. The committee approved the substitute 5-4 and sent it to Rules. ### HB 34. Professional licensing boards; continuing education tracking solution to monitor compliance of licenses with applicable continuing education requirements; establish [HB 34](https://georgiacommons.org/bills/2025-2026/hb34) (2025-2026 Regular Session). From [1:57:35](https://vimeo.com/1176563546#t=7055s), turns 446 to 549. The chair presented a replacement for [HB 34](https://georgiacommons.org/bills/2025-2026/hb34) restoring hemp restrictions previously pursued through [SB 254](https://georgiacommons.org/bills/2025-2026/sb254). The chair described limits of 10 milligrams of THC per gummy and 5 milligrams per 12-ounce beverage, counting intoxicating THC variants together. The proposal would also allow package-store sales, require driving-impairment warnings and prohibit sales exceeding federal THC limits. The chair said a federal restriction scheduled for November 1 could largely supersede the state proposal. A Georgia Association of Convenience Stores witness argued that the combined-THC definition could effectively ban products and push sales into unregulated markets. The witness urged keeping the existing Agriculture Department framework and cited at least 1,100 compliance inspections in the preceding year. The chair disputed that the proposal sought a ban, saying it restricted concentrations. The witness said the association did not oppose package-store sales. Members raised impaired-driving and testing concerns. One member suggested lowering beverage limits to 2.5 milligrams; another questioned whether weaker drinks would encourage greater consumption. No amendment was adopted. After announcing a 5-4 vote against passage, the chair voted to create a tie and said the proposal would remain alive for the next meeting. > The transcript runs 124,100 characters. A reader that cannot take it at once can read it in 3 parts: part 1 https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities.md?start=0; part 2 https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities.md?start=59952; part 3 https://georgiacommons.org/meetings/2026-03-24/senate-regulated-industries-and-utilities.md?start=119835. ## Transcript (551 turns) [0:00:43](https://vimeo.com/1176563546#t=43s) Test one, two. Test one, two. [0:00:48](https://vimeo.com/1176563546#t=48s) Hey. Hey, we can. Yeah, I know. Yeah. That's right. Yeah. Well, I don't know. It's better than working with you. Yes. Uh, yes sir. W plus is about... The real... Well, you think it's funny. So whoops. How many times are they going to do items? It could be anybody wants to. Yeah. Yeah, that she works as well. There's some studies that, that includes some potential users as a team. Um. What, what, what? It's not all similar to work with no audio. It's also not the main event. [0:01:18](https://vimeo.com/1176563546#t=78s) I thought it was. Thank you. Yeah. So happy to help. That was our end. Hey, Tonya, we'll stay over there. Alchemists. [0:22:23](https://vimeo.com/1176563546#t=1343s) No, because you are as always. [0:22:27](https://vimeo.com/1176563546#t=1347s) Morning, everybody. Uh, Chairman Cowsert is still over in... Where'd you say, Non-Judy? What's that? [0:22:31](https://vimeo.com/1176563546#t=1351s) House Judy. [0:22:32](https://vimeo.com/1176563546#t=1352s) House Judy. Anyway, you know how the House moves, at extraordinary speed. Um, and so we're, we're going to open up, get this thing started here, uh, Regulated Industries meeting here. We're gonna start with, uh, uh, Representative Anderson, if you'll come forth. You'll just, you wanna sit up here? Be easier for you? Yeah, come up here to number two there. And, uh, we're gonna start with, uh, House Bill 1027, correct? [0:22:53](https://vimeo.com/1176563546#t=1373s) Yes, sir. [0:22:54](https://vimeo.com/1176563546#t=1374s) All right, my friend. We appreciate all the House members moving these Senate bills. We want y'all to keep on moving them. [0:23:02](https://vimeo.com/1176563546#t=1382s) Only move the good ones. [0:23:04](https://vimeo.com/1176563546#t=1384s) Only the good ones. [0:23:07](https://vimeo.com/1176563546#t=1387s) Thank you, and, uh, we're working on moving those. We got about four of them on my, in my committee tomorrow, so good ones. Good ones. Uh, today I'm presenting, uh- [0:23:16](https://vimeo.com/1176563546#t=1396s) Good ones, Dave [0:23:16](https://vimeo.com/1176563546#t=1396s) ... again, House Bill 1027. Uh, I just received a little bit ago the, uh, substitute to present from LC474302S. The, uh, this is, uh, starts out as the bill that, uh, we discussed last week. Uh, basically taking the, uh, allowable contract time period for MEAG to, and MEAG participants to contract with their customers from up to 10 years to up to 20 years. [0:23:49](https://vimeo.com/1176563546#t=1429s) And, uh, as we discussed, uh, last week, that, uh, allows them to be more competitive in the marketplace for longer-term customers. [0:23:56](https://vimeo.com/1176563546#t=1436s) That was the only change last week though, the 10-year to the 20-year, right? [0:23:59](https://vimeo.com/1176563546#t=1439s) That, that is correct. Yes, sir. Yes, sir. Uh, there's been a couple of, uh, uh, additions in the, or changes in the committee sub. Uh, let me find where this starts here. [0:24:09](https://vimeo.com/1176563546#t=1449s) Well, why don't you go line by line if you don't mind? [0:24:11](https://vimeo.com/1176563546#t=1451s) Yes, sir. Okay. Uh, we will go down to [0:24:18](https://vimeo.com/1176563546#t=1458s) on lines 25 through 30, and I'll just read, "The sale of electric power, which is validated by a superior court, uh, pursuant to Code Section 46-3-131 as to its reasonableness and enforceability." That was in the original, uh, the original bill. But then we've added now, "Including specific contract terms requiring the cost of any new power generation required to service a specific customer to be paid by such customer and provided. [0:24:48](https://vimeo.com/1176563546#t=1488s) Further, that such contract shall not result in such customer paying a rate less than that charged to retail customers." [0:24:56](https://vimeo.com/1176563546#t=1496s) Was that just to make sure that we had all large loads customers paying all their costs up front, correct? [0:25:03](https://vimeo.com/1176563546#t=1503s) I, I would assume so. That, that was, uh, that last portion was, uh, an amendment made, uh, as, as, in the committee sub. So I would assume based on the, the wording of that, Mr. Chairman, that that is the case. [0:25:17](https://vimeo.com/1176563546#t=1517s) All right. [0:25:17](https://vimeo.com/1176563546#t=1517s) Uh, and then that same, uh, terminology was used in lines 63 through 68. Uh, and the reason we have two different sections addressing this is MEAG is 49 members, 48 of which are municipalities, so we have to cover them in the, in the code related to municipals. And then the, uh, there is one county, Crisp County, that is a member of MEAG, so we did have to cover that in, in the county section also. [0:25:45](https://vimeo.com/1176563546#t=1545s) Um, you know, it's, uh, Crisp County, for those that don't know, weren't here, it doesn't fall under customer choice. There's some agreement was made- [0:25:53](https://vimeo.com/1176563546#t=1553s) That is correct [0:25:54](https://vimeo.com/1176563546#t=1554s) ... back in the twilight day. [0:25:55](https://vimeo.com/1176563546#t=1555s) The Territorial Act was put in place. [0:25:57](https://vimeo.com/1176563546#t=1557s) Right. Right. Yes. [0:25:57](https://vimeo.com/1176563546#t=1557s) That, that only county does not fall under the, uh, customer choice area for Georgia Power over, what is it, nine megs, whatever it is? [0:26:06](https://vimeo.com/1176563546#t=1566s) 900K- [0:26:06](https://vimeo.com/1176563546#t=1566s) 900K [0:26:06](https://vimeo.com/1176563546#t=1566s) ... connected. Just under a megawatt. Yeah. [0:26:08](https://vimeo.com/1176563546#t=1568s) Right. So that's, that's section, uh, section one and section two of the bill. Uh, the, the committee sub also adds a section three, uh, which inserts a new paragraph in, uh... Let's see. [0:26:32](https://vimeo.com/1176563546#t=1592s) Which would be 7.1A. [0:26:35](https://vimeo.com/1176563546#t=1595s) Mm, 84. [0:26:36](https://vimeo.com/1176563546#t=1596s) And starting on line 84, "As used in this paragraph, the term large load customer means customers with an expected total peak demand of 100 megawatts or greater at one or more premises located on one tract or contiguous tracts of land." Uh, and then B, "Each contract between the authority of those political sub- of, of, for, or those political subdivisions which have contracted with the authority for the purchase of electric power or energy and a large load customer for the provisions of electric service- entered into on or after the effective date of this act shall include terms and conditions designed to protect residential and retail electricity customers from costs associated with the serving the new load, uh, the new large load customer, including but not limited to. [0:27:27](https://vimeo.com/1176563546#t=1647s) And then there's, uh, looks like four items listed here. Uh, one, minimum billing requirements designed to recover incremental costs associated with serving and preparing a, to serve a large load customer. Uh, two, a contract term that may exceed the length of the applicable service tariff. Three, performance and credit provisions designed to protect retail customers in the event of contract default. And fi- uh, four, excuse me, termination provisions designed to protect retail customers in the event of termination of the contract for electric service. [0:28:01](https://vimeo.com/1176563546#t=1681s) And then there's, uh, two other, uh, subparagraphs added here. C, no such contract shall authorize the large load customer to pay a rate that is below the rate paid by retail customers of the political subdivision which have contracted with the large load customer for the purchase of electric power energy. And then, B, the authority and those political subdivisions which have contracted with the authority for the purchase of electric power or energy shall be authorized to enter into contracts with a large load customer whereby such large load, large load customer agrees to pay at the beginning of such contract all costs associated with creating or establishing more electric generation capacity for such customer. [0:28:42](https://vimeo.com/1176563546#t=1722s) So that's, that's, uh, those are the, that basic- that section is the, uh, additional section in the committee sub. [0:28:48](https://vimeo.com/1176563546#t=1728s) And reiterate to us, if you don't mind, that, that all these fall under the same, uh, auspices as Georgia Power, that if the more generation, the more money is made, the more pushback to the residential customer, m- more dropping their rates. [0:29:01](https://vimeo.com/1176563546#t=1741s) Well, the... and, and that is true. I, I do have a little, little concern about the, the way this is, is set up, and I'll just mention that, and of course I defer to the wisdom of the committee on all these. First of all, it, it does place some restrictions on MEAG that don't exist for Georgia Power Company related to, uh, the rate structure. Uh, first of all, there's a, a term used in here- [0:29:24](https://vimeo.com/1176563546#t=1764s) Well, you, uh, where you at? [0:29:25](https://vimeo.com/1176563546#t=1765s) Okay. Well, looking at the... That's what I was getting at right here. The, uh, in lines 101 and 10- uh, excuse me, 100 and 101, uh, no such contract shall authorize the large load customer to pay a rate that is below the rate paid by retail customers. And, and I will ask, unfortunately I didn't get this in time to really do this research myself, uh, do we have a definition of retail customers? Because, uh, uh, the electric utility treats different classifications of customers differently. You have residential retail, you have commercial retail, you have industrial retail, and the rate structures with, uh, with average costs there vary. [0:30:04](https://vimeo.com/1176563546#t=1804s) How, how does that differ from Georgia Power, the, uh, uh, like... [0:30:09](https://vimeo.com/1176563546#t=1809s) Language in there, Brian. What number you on again? [0:30:12](https://vimeo.com/1176563546#t=1812s) I think I can help. [0:30:13](https://vimeo.com/1176563546#t=1813s) Senator Brass. [0:30:14](https://vimeo.com/1176563546#t=1814s) Uh, you got me. So yeah, it looks like they, we've incorporated, I don't... D- Is this your sub, Sen- Representative Anderson? [0:30:22](https://vimeo.com/1176563546#t=1822s) Uh, no. [0:30:23](https://vimeo.com/1176563546#t=1823s) Who, who's bringing this sub? [0:30:26](https://vimeo.com/1176563546#t=1826s) The other chairman. [0:30:27](https://vimeo.com/1176563546#t=1827s) The chairman? [0:30:28](https://vimeo.com/1176563546#t=1828s) It would be, uh- [0:30:29](https://vimeo.com/1176563546#t=1829s) The chairman [0:30:29](https://vimeo.com/1176563546#t=1829s) ... Chairman Calvin, I would assume so. [0:30:31](https://vimeo.com/1176563546#t=1831s) The other chairman. The two is underway. [0:30:33](https://vimeo.com/1176563546#t=1833s) Yeah, go. [0:30:34](https://vimeo.com/1176563546#t=1834s) All right. Um, so it looks like we've incorpor- corporated language from what came out of Senate Bill 34, which got incorporated into SB 410, but there is two new paragraphs, which would be C and D. Those are not... And quite honestly, I feel like that kinda splits the baby on, on the whole debate we had between Senate Bill 34, um, on using the rate payer language versus the contract language, and we're using the contract language, but yet we are adding in, you know, some clarity around r- really the intent, which we put into 410, if y'all remember. [0:31:21](https://vimeo.com/1176563546#t=1881s) So I, I do kinda like it, and probably that should be incorporated into 410 or, or one of the other bills that, that's moving on the, on the overall data center stuff. So I, I like it. So is that not true? [0:31:39](https://vimeo.com/1176563546#t=1899s) The gentleman knows of what he speaks. [0:31:41](https://vimeo.com/1176563546#t=1901s) Start again. Go on. [0:31:43](https://vimeo.com/1176563546#t=1903s) Thank you, Mr. Chairman. So the, uh, well, Representative An- Anderson, let me see if I got this right. And, you know, I've, I've spent my entire career in the utility business. I've done, uh, water, sewer, gas, electric, you know, all, all of them. The, uh, you got two customers. You got... Okay, when we talk about, and I don't know what the definition of retail customer is, but let's just say we got you as a homeowner. [0:32:10](https://vimeo.com/1176563546#t=1930s) Mm-hmm. [0:32:10](https://vimeo.com/1176563546#t=1930s) And you're, you're a retail customer. The, uh, you, you go home, you turn on your lights, you're running your heat and air, you're doing things like that, you're total electric. The, uh, uh, but your power consumption, if you looked at it on a graph, would go up and down and up and down and up and down. The, uh, and we look at somebody that, that, one of these large load, you know, AKA a data center, and their load is pretty flat, runs the same all the time. The, uh, do you think it would be advisable that, uh, for that, those customers that are up and down, up and down, up and down, the, uh, we're gonna sell this, this large power user power at the, the exact same rate that we're gonna sell to the, the homeowner or to any other retail customer that, you know, commercial, the, uh, that's up and down, up and down, up and down, or nice even load? [0:32:59](https://vimeo.com/1176563546#t=1979s) 'Cause generators, they, uh, I don't care what size generator, they all put out the same amount of power all the time. And so which one do you think would be more, uh, efficient to serve and more cost-effective to serve? [0:33:12](https://vimeo.com/1176563546#t=1992s) But just, uh, based on the scenario you've given it, a levelized load typically is the most economical load to serve because you, you don't, uh, you don't have to plan for the, the spiking contingencies that you do with other loads. So- [0:33:26](https://vimeo.com/1176563546#t=2006s) No. I don't know on the amendments that, that are on the, the bill, the changes to the bill since we last heard it, but did, did you make these amendments or were they- [0:33:36](https://vimeo.com/1176563546#t=2016s) That's right, yes [0:33:37](https://vimeo.com/1176563546#t=2017s) ... they put in by somebody else? [0:33:38](https://vimeo.com/1176563546#t=2018s) That- that's my understanding, that this is a committee substitute that came from the, the, the committee or the chairman. [0:33:43](https://vimeo.com/1176563546#t=2023s) Okay. Well, it scares me that, that, you know, uh, I guarantee you there's a, there's, uh, in the utility business you're looking for a nice even, steady flow. You know, I don't care whether you're selling water, you're selling gas, you're selling electricity, whatever the case may be, and that's where to me I want to make sure that, that we don't hinder MEAG in being competitive to, to, uh, what's going on in their, uh, you know, because we are a customer choice state. Now, that's one of the great things about it is we, we do get to decide e- everywhere except for Crisp County, Mr. [0:34:14](https://vimeo.com/1176563546#t=2054s) Chairman. Said they, uh, uh, that, that we have options on who's gonna be your power supplier, and I want to make sure that it's a fair competition, so. [0:34:23](https://vimeo.com/1176563546#t=2063s) A- and I, and I appreciate your concerns and I share that concern, and that's the reason I point out that, uh, uh, on a very basic level, uh, without a definition of rate paid by retail customers, understanding what is that. Is that an av- average aggregate rate? Is that a, uh, rate based on certain times of p- of the year? Because a lot of these rate structures vary between winter and summer. Uh, is this talking about retails? It's talking about commercial, industrial rate structures which are all different and all have different averages. [0:34:55](https://vimeo.com/1176563546#t=2095s) Uh, without understanding what that is, it would be hard for to, to really assess the impact this would have on MEAG from a co- competitive standpoint. Not to mention the fact that retail rates have a, uh, capital construction component in addition to incremental costs built into them, and, uh, the terminology and the phrase that's, that's used in the amendments on this bill requires that be taken care of up front by the customer. So, uh, uh, you know, while we, we don't want these large loads to have negative impacts on the state and on our, uh, rate payers and customers, we also have to provide a competitive environment for the Georgia businesses that are, are put in place through the Territorial Act to compete for those loads. [0:35:39](https://vimeo.com/1176563546#t=2139s) One, one other question, Mr. Chairman. [0:35:41](https://vimeo.com/1176563546#t=2141s) Okay, go ahead. [0:35:42](https://vimeo.com/1176563546#t=2142s) The, uh, when I, I, I read this, you know, the intent was to, to allow MEAG to, to go from a 10-year contract to where they can, they can amortize the cost if they have to do generation and transmission the, uh, over a longer period of time and get that payback for their customers and the thing there of the original bill, I believe, that you brought to us. Is that not correct? [0:36:02](https://vimeo.com/1176563546#t=2162s) That, that is correct, yes. [0:36:03](https://vimeo.com/1176563546#t=2163s) And, and the way that I, I read this, a- and maybe I'm, I'm, uh, not, hadn't, hadn't had a chance to study it, 'cause this is new for both me and you, but when I look at it, this would apply to even contracts that are under 10 years. This would, this would be one of those s- scenarios that for me when I look at it, this could hinder them in even shorter term contracts where they have w- serving a large load. The, uh, and that would be, th- this, this would be instead of an asset for MEAG, this would be a detriment to MEAG and making them competitive, the, uh, in the, the electric utility. [0:36:37](https://vimeo.com/1176563546#t=2197s) And that's one of the great things about Georgia is because we have that competition everybody wins. The, uh, com- competition makes us all stronger. Is that not correct? [0:36:47](https://vimeo.com/1176563546#t=2207s) I, I, I believe that the gentleman's correct, yes. [0:36:49](https://vimeo.com/1176563546#t=2209s) Thank you. [0:36:51](https://vimeo.com/1176563546#t=2211s) Just wish we had copies. [0:36:52](https://vimeo.com/1176563546#t=2212s) Would you, would this, would this not be a if you have a level, as, as Senator Ginn was talking about, if you have a level power bill and you owed more money at the end of the year, wouldn't it be a true up thing at that point in time, uh, w- with the large load customer? Would they true up if they owed more or less which not, which would not create that, that graft he's talking about? [0:37:10](https://vimeo.com/1176563546#t=2230s) Uh, well, I, I think what you're describing is what we, what the industry terms as a levelized billing structure- [0:37:15](https://vimeo.com/1176563546#t=2235s) Mm-hmm [0:37:15](https://vimeo.com/1176563546#t=2235s) ... which is utilized in residential customers. [0:37:18](https://vimeo.com/1176563546#t=2238s) Right. [0:37:18](https://vimeo.com/1176563546#t=2238s) Typically very smaller loads. [0:37:19](https://vimeo.com/1176563546#t=2239s) Very small. [0:37:20](https://vimeo.com/1176563546#t=2240s) Uh, and, and I'm not aware of a, a rate structure, and of course the gentleman behind me can answer that question more directly for, uh, for customers of this, of this, uh, scale. [0:37:30](https://vimeo.com/1176563546#t=2250s) Mr. Fuller, you want to come up? You want anything on, on one? I know you're, this is you and MEAG there and put you on witness number one here. Just tell us who you are, tell us who you're with, just for the record. Pull your mic close to you if you don't mind. [0:37:42](https://vimeo.com/1176563546#t=2262s) Sure. Uh, my name is James Fuller. I'm president and CEO of MEAG Power. [0:37:49](https://vimeo.com/1176563546#t=2269s) All right, sir. [0:37:50](https://vimeo.com/1176563546#t=2270s) Um, you know, I think we talked last week a little bit when we presented to the committee that, uh- [0:37:57](https://vimeo.com/1176563546#t=2277s) James, pull that microphone up here. [0:37:58](https://vimeo.com/1176563546#t=2278s) Sure. [0:37:58](https://vimeo.com/1176563546#t=2278s) You have a soft-spoken measure. There you go. [0:38:02](https://vimeo.com/1176563546#t=2282s) Um, you know, w- we have an interest in supplying some of these large, uh, loads, and we're trying to set up a facility where, uh, each city that's a member of MEAG, if they have a, a large load customer could come and participate and their customers would kind of on a reverse RFP have the ability to bid in. And so we just saw this language this morning, and to point it to the retail, um, rates of the sponsoring utility, 'cause MEAG can't sell retail, uh, it, it doesn't level the playing field. [0:38:44](https://vimeo.com/1176563546#t=2324s) Each city has different retail rates that they set at their local level and, uh, it would preclude some of our cities to be able to be a competitive bidder. And the way MEAG looks at it, you know, if we build a facility, uh, and invest in the infrastructure, um, there's a certain cost to that, and if we collect more from the ultimate large load customer through the municipal utility, that margin will go to the benefit of all the cities that contribute electricity. [0:39:21](https://vimeo.com/1176563546#t=2361s) And if we set a target that's at a retail level, even though we're making a margin above cost, uh, it will preclude some people to be able to participate in bringing large lo- loads to their cities, and it would be to the detriment of the whole MEAG system. And we, it would put us at a competitive disadvantage, uh, versus the other utilities on the wholesale basis in the state. [0:39:51](https://vimeo.com/1176563546#t=2391s) Could you elaborate a little bit more on, like for example, you're talking about large load customers and money up front they might pay out, et cetera, et cetera, et cetera. How will that, uh, uh, w- would that put you at a disadvantage that you all could not basically serve the large load customers? Is that what I'm understanding basically? [0:40:06](https://vimeo.com/1176563546#t=2406s) Well, if, if we were to issue debt and we wanna amortize the debt over the period of the contract with the large load customer, right now if we were to issue debt beyond 10 years, uh, without this change in the law, we'd be exposed on the back end of the debt service. If the large load customers left the state or closed their business, that would be on the backs of our municipal utilities. And they pledge not just the revenue streams of the utility, but the geo-taxing power of their communities. [0:40:42](https://vimeo.com/1176563546#t=2442s) And so we didn't wanna go out and issue debt where there was a possibility if the counterparty, the large load, vacated the transaction or went out of business, that we would, we would basically put a burden on the taxpayers in our community. So we wanna match the debt up with a power, uh, contract with the large load customer so that we don't have, uh, the risk. And w- we mentioned last week of doing it on a non-recourse basis where the investors in the bonds that we would issue would look through MEAG, look through our participants, and go to the credit of the large load customer. [0:41:26](https://vimeo.com/1176563546#t=2486s) And so if the large load customer didn't pay, uh, it wouldn't fall on the burden of our cities or MEAG Power. And we're very risk adverse. These large loads are, are very sizable, and we wouldn't normally go out and have a, uh, a customer that is 100 megawatts or 200. I think the biggest one on the system that we have right now is about 70 megawatts. And so it's a whole different risk parameter, and we're trying to balance the contractual arrangements with our ability to collect the, the debt service from the large load and not expose our underlying cities. [0:42:09](https://vimeo.com/1176563546#t=2529s) And, you know, to, to put this last amendment on, uh, it makes it very, uh, difficult to give all the cities the option to participate if they've got a large load customer, uh, because they may be precluded. Uh, we have 49 cities. They all set their own rates, and they're all at different levels, so it's, it's problematic for us. [0:42:33](https://vimeo.com/1176563546#t=2553s) Okay, I'm gonna recognize Senator Ginn before I ask that question. Make sure I understand this. If a data center, we'll use them for example since they're a large loads customer- [0:42:40](https://vimeo.com/1176563546#t=2560s) Mm-hmm [0:42:40](https://vimeo.com/1176563546#t=2560s) ... a 500 megawatt data center in, in this scenario, under this thing, would put you at a disadvantage. You couldn't serve that customer. [0:42:49](https://vimeo.com/1176563546#t=2569s) Depending on the city and where their retail rates were, in some sit- situations, if it, if it's a requirement that we collect money from the data center above the retail rate, they will be precluded. Some may have lower retail rates, and they may be able to compete under this. But the way we were looking at it is it's the cost of production. We would make sure that they w- they were responsible for paying the cost and a m- markup over that. But it wasn't a markup over retail rates, it was a markup over our cost to provide the energy on a wholesale basis. [0:43:27](https://vimeo.com/1176563546#t=2607s) Senator Ginn. [0:43:28](https://vimeo.com/1176563546#t=2608s) Thank you, Mr. Chairman. The, uh, uh, Representative Anderson, if we looked at, at the, the bill itself, and I, I wanna make sure, uh, because at some point I wanna, uh, get this to a motion. But the, if we look at the bill on lines, uh, end of line 24, we struck four, and then we struck, uh, 25 through 30, the, the three there. The same language would apply in li- on line 62, and then 63 through 68. [0:44:02](https://vimeo.com/1176563546#t=2642s) And then the reference on the last page, uh, of line 100, that section C, 100 through, uh, 102. I think what that would do, which, which allow this to go forward as a 20-year contract, it doesn't put a parameter or, or s- something that says that they can't sell less than a retail customer, but they can sell something that makes, uh, they have to make a profit. [0:44:33](https://vimeo.com/1176563546#t=2673s) They have to make sure that they can recoup all of the investment and the things that the- [0:44:37](https://vimeo.com/1176563546#t=2677s) Right [0:44:37](https://vimeo.com/1176563546#t=2677s) ... the, the rate payers would be on the hook for. There's a guarantee the courts have to, to rule on it, said they, uh, and would allow them to be competitive i- just like any other electric utility in the state. Uh, and they can do what makes sense, that, that makes sense for their customers and th- th- that MEAG city. Is that not, uh, am I, am I looking at the changes that, that, that n- need to be made in the bill to make it where it does allow them to do a 20-year contract, make sure they're competitive, and make sure that the courts have a say in, in, uh, allowing for them to, to have that, um, the, uh, I'll say protection if, if there was a, a large load customer that went out? [0:45:18](https://vimeo.com/1176563546#t=2718s) They can, they could put those things in there. Is that- Looked like about right. [0:45:23](https://vimeo.com/1176563546#t=2723s) Well, just to, uh, just to look at, at, uh, what you just said, if I understood you, uh, properly there, if we strike the or on 24 and then strike out lines 25 through 30, what that does is that eliminates adding retail customers to the 20-year exception and would basically restrict MEAG as they are currently to only a maximum of 10-year contracts. [0:45:45](https://vimeo.com/1176563546#t=2745s) Well, how would you wanna word that? [0:45:47](https://vimeo.com/1176563546#t=2747s) Uh, the original language, uh, uh, would have, uh, left that portion, left the or in 24, and I'm just kinda going from memory here. Uh, left 25 and 26 up to the, the word enforceability with a period there, so... [0:46:12](https://vimeo.com/1176563546#t=2772s) Yeah. [0:46:13](https://vimeo.com/1176563546#t=2773s) Okay. [0:46:14](https://vimeo.com/1176563546#t=2774s) And so you would be striking from including, uh, specific contract requirements and, and through the end of that line 30. [0:46:21](https://vimeo.com/1176563546#t=2781s) In, in the, the, the, the premise that you gave, yes, sir. [0:46:25](https://vimeo.com/1176563546#t=2785s) Okay. So then you- [0:46:25](https://vimeo.com/1176563546#t=2785s) And then that, that would apply also in the, uh, the, the section two area with the corresponding terminology. [0:46:33](https://vimeo.com/1176563546#t=2793s) Okay. And then when you get to, uh, the last page on line 100, [0:46:42](https://vimeo.com/1176563546#t=2802s) the, uh... [0:46:46](https://vimeo.com/1176563546#t=2806s) What would you do on that section C? [0:46:52](https://vimeo.com/1176563546#t=2812s) Just strike section C? [0:46:54](https://vimeo.com/1176563546#t=2814s) Well, in, in, in the, the premise that you gave, yes, sir. And section C is the part that I, I see as being particularly prom- problematic because we do not have a definition of a rate paid by retail customers. [0:47:06](https://vimeo.com/1176563546#t=2826s) Let me finish. Yeah. [0:47:08](https://vimeo.com/1176563546#t=2828s) And, uh, and even with a definition, if, if, if, you know, uh, if- [0:47:11](https://vimeo.com/1176563546#t=2831s) Mr. Fuller, do you want the, your attorney to come up here with you? I was gonna invite you up, sir, and I'm sorry. [0:47:17](https://vimeo.com/1176563546#t=2837s) Just to, just to follow up with what Mr. Fuller said, the, the, the original intent of this was that once that, uh, once that investment is, is dealt with either upfront or contractually, then, uh, the initial investment, then the customer would be treated like, like other customers are, ensuring that they cover the cost of, uh, providing the service plus the margin for, for the, uh, municipality. [0:47:43](https://vimeo.com/1176563546#t=2863s) Okay. Yeah, I, you know, and, uh, happy to, to, uh... Oh, 'cause this is, you know, first we've, we've seen of the substitute and, you know, I wanna make sure that, that everybody has, uh, competition, and if, if this is taking MEAG out of competition, it means that the other two suppliers, the EMCs and Georgia Power, would then, you know, they, they... It'd be less competitive for all other utilities, and that's important that we have competition in the, uh... [0:48:14](https://vimeo.com/1176563546#t=2894s) Uh, Senator Dolezal wants to go. [0:48:17](https://vimeo.com/1176563546#t=2897s) Senator Dolezal. [0:48:18](https://vimeo.com/1176563546#t=2898s) Thank you, uh, Mr. Vice Chairman, or the other chairman, as you- [0:48:22](https://vimeo.com/1176563546#t=2902s) The boss, the boss is back. [0:48:26](https://vimeo.com/1176563546#t=2906s) How would you feel about this if, uh, what Senator Ginn is proposing, if we actually did what Senator Brass talked about, which is inserting this language into 410, and so then you would have more of a level playing field in terms of the, the competitive landscape where it wouldn't only apply to MEAGs, but it would, would apply to everyone else. And I think that for the purposes of discussion, we can probably get to a pretty easy definition of retail customer, which is the, the, the publisher rates for anyone other than those that are getting a special breakthrough of contractual negotiation. [0:48:58](https://vimeo.com/1176563546#t=2938s) Um, and we may need to spell that out in a, in a sub. But just for our purposes here, I think we could probably agree with to that being, uh, at least a, a, a definition for our purposes. Um, and, and I'm wondering if this isn't a, a, a good public policy that should apply to the EMCs and Georgia Power like Senator Ginn was just mentioning, that would not put the MEAGs at a, at a competitive disadvantage. [0:49:21](https://vimeo.com/1176563546#t=2961s) Uh- [0:49:22](https://vimeo.com/1176563546#t=2962s) What, what's your, what's your read on that? [0:49:24](https://vimeo.com/1176563546#t=2964s) Uh, my... I, I agree that, uh, that 410 would be a, a, a more appropriate because it's a more tailored and specific, uh, uh, addressment there. So I think that would be a, a more acceptable venue to, uh, to entertain that. Yes, sir. [0:49:40](https://vimeo.com/1176563546#t=2980s) Does 410 apply to the MEAGs, though? [0:49:43](https://vimeo.com/1176563546#t=2983s) I, I'll be honest with you, I don't have a copy of it in front of me to look and make sure. [0:49:46](https://vimeo.com/1176563546#t=2986s) I don't believe that it does. And so I think what, what Chairman Brass was getting to is maybe we revisit the C and D language and maybe make it apply everywhere. [0:49:57](https://vimeo.com/1176563546#t=2997s) Senator Ginn, you're recognized. [0:49:59](https://vimeo.com/1176563546#t=2999s) Uh, and I'm not sure, Je- if, if you can help me out, uh, Senator Dolezal, on 410. The, uh... Oh, that's another bill that, that you're, you're talking about. [0:50:09](https://vimeo.com/1176563546#t=3009s) Yeah, it had all of this language, but stopped at C. [0:50:12](https://vimeo.com/1176563546#t=3012s) Right. [0:50:12](https://vimeo.com/1176563546#t=3012s) So it had- [0:50:13](https://vimeo.com/1176563546#t=3013s) And, and, and so here's, here's the, the net effect of that. And just, and, and you help me, uh, Representative Anderson, Georgia, we compete all across the country for data centers. They, uh, they're, they're a huge investment when they come in. They... I don't wanna see our rate payers in Georgia, uh, residential customers, com- commercial industrial customers hurt by bringing any kind of data center into Georgia. I wanna make sure that we're competitive. The problem that if you put that language into any bill, that puts a, a disadvantage, that puts handcuffs on all of the electric suppliers in Georgia and makes us where we can't compete across the, the, the country and across the globe. [0:50:52](https://vimeo.com/1176563546#t=3052s) And for me, my concern is, is that when you do that, you've just tied up and, and we'll, we'll not have any more large load customers come into Georgia because you've hindered the ability for the, for the utility purpose, a nice large level load that, that uses, uh, plenty of power, the, uh, for us to be competitive in that regard. And am, am I correct, uh, Representative Anderson, you, you, you, you know a little bit about the electric utility business as, as, as well, or any other utility business. But I think we would be hindering the, uh, all of our electric utilities, and we would, we would cease to, to have that ability. [0:51:27](https://vimeo.com/1176563546#t=3087s) Well, I, I do think that, uh, addressing the specifics and the concerns around this one segment of customers, uh, that we term as data centers, that sort of thing, uh, should be treated separately from other industries. We look at the industries that have located con- you know, in more contemporary basis, the, uh, the Hyundai plant, the, uh, the, the, the other large customers that have located in Georgia, where, uh, not only is reliability and capacity a concern, but there's also more of an economic concern in those. [0:51:59](https://vimeo.com/1176563546#t=3119s) And I'm afraid that by, by just classifying this based on size of connected load, uh, we're going to basically take, at least in this, this wording, MEAG completely out of the picture when it comes to being able to compete and potentially, uh, acquire loads of that size. [0:52:19](https://vimeo.com/1176563546#t=3139s) Senator Brass, you're recognized. [0:52:21](https://vimeo.com/1176563546#t=3141s) Thank you, Mr. Chairman, and welcome back. [0:52:24](https://vimeo.com/1176563546#t=3144s) Thank you. [0:52:24](https://vimeo.com/1176563546#t=3144s) We missed you. Although the vice chairman did a great job. So I'm assuming y'all have kinda modeled out what this would look like on as far as rates go, or at least have an idea. Um, what... And let's say retail customer, let's, I guess, drill that down to, say, residential retail customer. What is the average rate per kilowatt hour across Georgia for MEAGs? [0:52:55](https://vimeo.com/1176563546#t=3175s) Uh, just a, just a ballpark. And then next question is w- what are you, what are you thinking the large load rate would be? [0:53:07](https://vimeo.com/1176563546#t=3187s) I, I would defer to, uh- [0:53:08](https://vimeo.com/1176563546#t=3188s) Again, just ballpark. It doesn't have to be... [0:53:11](https://vimeo.com/1176563546#t=3191s) Yes. [0:53:13](https://vimeo.com/1176563546#t=3193s) You know, we've, we've got 49 cities and, uh, the retail rates probably range from, uh, a low of 10 to probably a high of 16 on the residential. Uh, we've got commercial rates that are in excess of that. I think the data center loads, from the discussions, uh, that we've had about the marketplace, uh, might range from, uh, nine cents a kilowatt hour to 10 and a half. So if you put this provision in here, uh, it's gonna preclude MEAG from being able to contract beyond 10 years, so we don't match up the debt service on the facilities we build with the obligation to pay, and we'd expose our municipals, uh, after the 10 years to the debt service, uh, if the customer were to leave the state. [0:54:06](https://vimeo.com/1176563546#t=3246s) So, uh, it, it is problematic that if you're pointing to a retail rate for us to be competitive and really, uh, have a product that the data centers would be interested, uh, it would preclude some of our cities that have high rates. Uh, if they were courted by a large customer, uh, it would make it very difficult for them to, uh, make a profit on it. [0:54:36](https://vimeo.com/1176563546#t=3276s) Okay, and a follow-up, Mr. Chairman. [0:54:37](https://vimeo.com/1176563546#t=3277s) Sure. [0:54:37](https://vimeo.com/1176563546#t=3277s) Is that, when you say that nine to 10 and half cents, is that... Isn't there, like, don't some MEAGs have, like, a base rate and then a, and then a separate rate? Is that like a separate retail rate? Is that accurate? Do I understand that correctly? [0:54:55](https://vimeo.com/1176563546#t=3295s) Well, MEAG sells to the cities at cost, the debt service, the fuel cost, and the O&M. So we supply a wholesale rate, and then each community sets their retail rates, uh, to recover their distribution costs and any other margins that they wanna make. So, uh, it's different for every city. The, the cost of production from MEAG, depending on the city participating in the project that we build, that's all, uh, transparent and the same rate if they sign up for output of a, say, a new generation facility. [0:55:36](https://vimeo.com/1176563546#t=3336s) Okay. And I guess to, to Senator Dolezal's point, if, if it were even across the board, and for- forget, uh, forget us being competitive with other states, if it were even a... If C and D applied to, to the co-ops, applied to the, to Georgia Power, at that point would you be able to compete within our state? I, I... Uh, like I said, forget we wouldn't be able to compete with other states, but would that... [0:56:08](https://vimeo.com/1176563546#t=3368s) That wouldn't be a even playing field. [0:56:11](https://vimeo.com/1176563546#t=3371s) Well, if you're, if you're gonna point to the retail rates, we've got 49 different retail rates. Some of them would be precluded because they couldn't supply a product at a cost that was above their retail rate. [0:56:26](https://vimeo.com/1176563546#t=3386s) Okay. I got you. Okay. Thank you. [0:56:30](https://vimeo.com/1176563546#t=3390s) Other questions from committee members? Anybody else signed up on this bill? [0:56:36](https://vimeo.com/1176563546#t=3396s) No, sir. [0:56:37](https://vimeo.com/1176563546#t=3397s) All right, we're gonna hold action till we sort through some of this. We will be having another meeting on Thursday. And, uh, if y'all will just hold tight here for a while, we may be able to have a little break this morning and come back, 'cause I don't, I don't wanna do something on the fly that has, uh, unintended consequences. Unfortunately, I was presenting the bill down in a House committee and, and I haven't thoroughly reviewed this committee sub or discussed it with you guys before here. Um, my vice chairman was a little bit more ambitious than I would've been. [0:57:09](https://vimeo.com/1176563546#t=3429s) I might've had another bill first until we had some time to sort this out. But I'm glad everybody's heard the, the testimony. [0:57:14](https://vimeo.com/1176563546#t=3434s) Get it over with. [0:57:15](https://vimeo.com/1176563546#t=3435s) And so it is all well-intended, but I do think we need to be careful that we don't put you at a competitive disadvantage. And I, I'm hearing pieces here that, um- We, we may have sort of helped, um, solve the puzzle, the concerns that the public has, and might be able to, and maybe this should apply to all competitors, um, because of our system. Thank y'all for being here, Representative. Uh, if you'll hold tight, I'll, uh, or just leave us your cell phone. [0:57:48](https://vimeo.com/1176563546#t=3468s) I'll be in touch with you whenever we take a break. [0:57:50](https://vimeo.com/1176563546#t=3470s) Yes, sir, Mr. Chair. [0:57:50](https://vimeo.com/1176563546#t=3470s) All right. [0:57:51](https://vimeo.com/1176563546#t=3471s) Thank you. [0:57:52](https://vimeo.com/1176563546#t=3472s) Thank you. [0:57:53](https://vimeo.com/1176563546#t=3473s) Thanks. [0:57:54](https://vimeo.com/1176563546#t=3474s) Okay. Now I'm gonna shift the order slightly. We're gonna call House Bill 187. Representative Monahan. [0:58:03](https://vimeo.com/1176563546#t=3483s) How are you? [0:58:04](https://vimeo.com/1176563546#t=3484s) Good. This is a, basically a, uh, commandeering of Representative Washburn's original bill with his consent and permission. Uh, and after you guys have talked to me, it seems like something worthy of us hearing. [0:58:22](https://vimeo.com/1176563546#t=3502s) Thank you. [0:58:23](https://vimeo.com/1176563546#t=3503s) I need you, you, you gotta remember, this committee's cold dead on this. We have no idea- [0:58:28](https://vimeo.com/1176563546#t=3508s) Oh, okay. Well- [0:58:28](https://vimeo.com/1176563546#t=3508s) ... what this is. This, your, your bill was, it, I don't even know if it passed the House. [0:58:35](https://vimeo.com/1176563546#t=3515s) It did. Passed out of House committee, went to Rules, and stayed there for a while. [0:58:39](https://vimeo.com/1176563546#t=3519s) So it did not pass the House. [0:58:40](https://vimeo.com/1176563546#t=3520s) It, it, it hunkered down. [0:58:41](https://vimeo.com/1176563546#t=3521s) Got it. [0:58:41](https://vimeo.com/1176563546#t=3521s) Yeah, it hunkered down. [0:58:42](https://vimeo.com/1176563546#t=3522s) And, and it has not been assigned to this committee, although it is a subject matter that ordinarily would be. [0:58:48](https://vimeo.com/1176563546#t=3528s) I think that's correct, you know. [0:58:49](https://vimeo.com/1176563546#t=3529s) And I would love for you to explain the whole idea of a Vehicle Value Protection Agreement, why you need a bill to do it, and, and what your bill does. [0:58:59](https://vimeo.com/1176563546#t=3539s) Okay. [0:59:00](https://vimeo.com/1176563546#t=3540s) All right. [0:59:01](https://vimeo.com/1176563546#t=3541s) Well, thank you, Mr. Chairman- [0:59:02](https://vimeo.com/1176563546#t=3542s) Yeah. Thank you [0:59:02](https://vimeo.com/1176563546#t=3542s) ... members of the committee. This is- [0:59:04](https://vimeo.com/1176563546#t=3544s) House Bill 187 [0:59:05](https://vimeo.com/1176563546#t=3545s) ... House Bill 187. And I think the LC that's been given to me here is LC56-0668S. And, uh, as you said, Mr. Chairman, I am not Representative Washburn. I'm Representative Monahan. Though we have similar styles and habits, uh, I am definitely a different person. Uh, let's talk about House Bill 504. Uh, House Bill 504 would allow VVPAs, these are va- vehicle value protection agreements, to be available to Georgia consumers, like many of our neighboring states. [0:59:41](https://vimeo.com/1176563546#t=3581s) A VVPA helps a consumer protect the equity that they have in a vehicle in the event of a sudden or unexpected loss of value or use of the vehicle. So you can imagine this would be more for a, a vehicle that somebody's buying in cash, right? And they wanna protect the equity. The flip side of that would be something like if I went to a bank today or a traditional financial institution, and I wanted to get a loan on a vehicle. You can purchase gap insurance today. Well, that protects really the lender from the gap in between the vehicle's value and the loan balance, if that, if that makes sense. [1:00:19](https://vimeo.com/1176563546#t=3619s) So there would not be a negative balance there, and the consumer will not owe that. So instead of protecting the lender, these, uh, agreements actually protect the consumer themself. So let's talk about that, and let's talk about what kind of the, the, the operability here. So 504 regulates, of course, vehicle value protection products, which are optional. These are never required. Nobody can make this, uh, a part of the premise of a sale. It requires c- uh, clear consumer disclosures, re- re- uh, guarantees a 30-day cancellation window, and requires real financial backing so that claims get paid. [1:00:57](https://vimeo.com/1176563546#t=3657s) You know, you can't just stand this thing up and be a nobody. You gotta have the proper resources to back up, uh, and financial power to do so, and it gives Office of Consumer Protections enforcement power. All right. We'll keep moving. I know that, uh, this is the first time y'all heard of this. So number one, this defines vehicle value protection agreements, and it formally defines the products in law. Uh, we're gonna kinda get into the weeds here. Y'all stop me if you have questions. I'm happy to do it that way if you'd like to. [1:01:29](https://vimeo.com/1176563546#t=3689s) A vehicle value protection agreement is a contract where the provider agrees after an adverse event to give a benefit that can be applied to the cash value, trade-in, financing, or purchase of a replacement vehicle. It explicitly includes vehicle trade-in agreements, diminished value agreements, cash down, payment protection, depreciation benefit agreements. It requires a clear disclosure to consumers. Each agreement must clearly disclose provider and administrator contact info, charges, the eligibility requirements therein, claim procedures, cancellation rights, and refund methods. [1:02:11](https://vimeo.com/1176563546#t=3731s) Uh, and the first page must state, "You may cancel this agreement at any time before the end of the free look period," which is a 30-day period. Also, the buyer must be given access to the contract, and a car loan or purchase cannot be conditioned on the buying of these contracts. So for example, if I go there and I want to optionally purchase one of these products, they can't say, "Well, I can give you this square deal here, but you need to buy this agreement." That's not part of the deal. [1:02:41](https://vimeo.com/1176563546#t=3761s) Again, number three, a mandatory 30-day free look cancellation. Uh, so that's the 30 days to cancel for a refund. Number four, uh, rules if the provider cancels. If the company cancels, they must give notice, refund unearned fees, and, uh, can charge up to a $75 administrative fee. Financial solvency requirements. A provider cannot sell these agreements unless it either backs them with an insurance policy from a licensed insurer meeting minimal capital requirements or maintains a funded reserve equal to at least 40% of the collected fees, plus a trust secured deposit with the insurance commissioner, or has at least $100 million net worth. [1:03:21](https://vimeo.com/1176563546#t=3801s) Of course, the enforcement goes to the Office of Consumer Protections. So let's talk about why this is important to Georgia consumers Right now they can't have them. And so oftentimes I buy fleet vehicles for even my business. Uh, because I don't use a financial institution that would normally give a, uh, a vehicle loan, we do it as packages of vehicles for fleets, my fin- financial institution just doesn't have anything to offer me on something like this. And so as a consumer in that situation, I could go to a third party and purchase these agreements for that package of vehicles and, and those would protect my equity, as a lot of times we're putting... [1:04:04](https://vimeo.com/1176563546#t=3844s) we're cash heavy in those, in those procurements. So that's the bill. I know y'all are gonna have some questions, and I'm happy to stand for those. And we also have somebody, I think, uh, there. Travis, my eyes are getting bad on me. Travis is here to answer some questions as well, and I appreciate, uh, y'all's flexibility in letting us do that. [1:04:23](https://vimeo.com/1176563546#t=3863s) So fill me in on s- what's the difference in just getting automobile coverage that would cover you for comprehensive loss if we're talking about theft or a wreck or something that destroys the value of your vehicle? [1:04:34](https://vimeo.com/1176563546#t=3874s) Yeah. So sometimes I think, and we saw this especially during like COVID, where, you know, the price of these vehicles may exceed the value at a later point in time, but you've put equity in that vehicle. So this protects the equity that the consumer actually put into the vehicle. [1:04:48](https://vimeo.com/1176563546#t=3888s) So when you drive off the lot and the value of the vehicle drops 20% and, and you ended up paying more than 80% of the co- of the value. [1:04:56](https://vimeo.com/1176563546#t=3896s) You got that right. That's right. So insurance legally, you know, provides up to the cost of the vehicle. [1:05:02](https://vimeo.com/1176563546#t=3902s) I'm gonna recognize Senator Albers first and then you'll be next, Chairman Brass. [1:05:06](https://vimeo.com/1176563546#t=3906s) Thank you, Mr. Chairman. Uh, always good to see my friend, Representative Mamdahan. [1:05:10](https://vimeo.com/1176563546#t=3910s) Yes, sir. Like you every- [1:05:11](https://vimeo.com/1176563546#t=3911s) What other states are doing this currently? [1:05:14](https://vimeo.com/1176563546#t=3914s) Ooh, good question. Uh, I think that's probably a Travis question. Do y'all want him to buzz in now or do y'all wanna wait? [1:05:20](https://vimeo.com/1176563546#t=3920s) We're gonna wait. [1:05:20](https://vimeo.com/1176563546#t=3920s) Okay. [1:05:22](https://vimeo.com/1176563546#t=3922s) We're gon- we're gonna question you first, then he's- [1:05:24](https://vimeo.com/1176563546#t=3924s) Yes, sir [1:05:24](https://vimeo.com/1176563546#t=3924s) ... the only witness signed up. [1:05:26](https://vimeo.com/1176563546#t=3926s) Yeah, I would wait. [1:05:26](https://vimeo.com/1176563546#t=3926s) And you might- [1:05:27](https://vimeo.com/1176563546#t=3927s) I would wait. He, he's probably gonna have that answer for you. [1:05:29](https://vimeo.com/1176563546#t=3929s) If you don't have an answer to, just tell us maybe that's why you couldn't get out of the house. [1:05:33](https://vimeo.com/1176563546#t=3933s) Well, that's true. And, you know- I wish he was here with me. [1:05:35](https://vimeo.com/1176563546#t=3935s) I was pulling your leg. [1:05:35](https://vimeo.com/1176563546#t=3935s) I wish he was here with me, but, uh, unfortunately his schedule wouldn't allow. [1:05:39](https://vimeo.com/1176563546#t=3939s) I, I guess my question is maybe you can help- [1:05:41](https://vimeo.com/1176563546#t=3941s) Yeah [1:05:41](https://vimeo.com/1176563546#t=3941s) ... uh, either alleviate our concerns or address it is, you know, we've had, uh, significant increases in insurance premiums that I think we've all been talking about. Of course, tort reform was passed, et cetera. You know, this seems like yet another layer of insurance. To me it's, it's ki- kind of a known entity that, you know, you buy a new car, you're taking that depreciation, you know, the minute you drive it off the lot. Um, that's why we all have insurance, and we can have different deductibles and different reasons for how we, we, we scale it today. W- why would we wanna add yet one more building block on that? [1:06:12](https://vimeo.com/1176563546#t=3972s) Well, I think this is more about, and this is my opinion, uh, I think this is more about the, the level of comfort that a consumer has in losing the value of their equity, right? So for example, um, I, I'll just give you a personal example, though that's not the impetus of the bill, but I'll give you a personal example. I have a 2023 Toyota Corolla. Now, as many of y'all know, we do driver services, we have a fleet, and so we keep these cars on the road. Now, that car was purchased at, I think, probably mid-20s, high-20s once taxes and everything was done on it. [1:06:46](https://vimeo.com/1176563546#t=4006s) That car just got totaled. Uh, despite our best efforts of keeping these cars in shape, that happens from time to time. That vehicle, with 260,000 miles, is worth about $9,000 today, in just a short period of time. Now, we paid cash for those vehicles. If I were to have a vehicle value protection agreement, that would have protected the equity that I would've put in there, in and above what the insurance would've paid out, and that's, that's what, if a consumer wants to be comfortable with the, with the amount of cash they put in a vehicle, they can protect their interest with these agreements. [1:07:19](https://vimeo.com/1176563546#t=4039s) But let me remind the committee, these are only optional. These aren't a mandated product, and they cannot be used as a condition of a sale. [1:07:28](https://vimeo.com/1176563546#t=4048s) Can do one final question here. [1:07:29](https://vimeo.com/1176563546#t=4049s) Go right ahead. [1:07:30](https://vimeo.com/1176563546#t=4050s) This, this helps. I appreciate you getting us there. I guess my concern is that the person that might not understand that, that might be taking advantage of this to some degree as well, uh, h- how, how are we gonna protect the consumer even though it is optional? But, you know, as I used to tease some of my friends who own car dealerships in this building, so was the undercarriage protection plan, uh, that seemed to always get added. [1:07:53](https://vimeo.com/1176563546#t=4073s) That's right. So if you'll see on lines 39 through 62 in the bill- [1:07:58](https://vimeo.com/1176563546#t=4078s) Yes [1:07:58](https://vimeo.com/1176563546#t=4078s) ... uh, we've added a lot of consumer protections here. Uh, these are the disclosures that are required. Uh, so you'll see, uh, what they must, uh, on line 42, vehicle value protection must conspicuously disclose the name, address, and contact information of the provider, and admin- an administrator, if you need, the consumer, the terms, the benefit eligibility requirements. Um, the... But number C, I think this was, if I, if I recall, it's been a while since I presented it, but the conditions posed by the vehicle value protection agreement, including, but not limited to, any requirement the consumer return to the dealer where the vehicle was purchased to obtain the benefit, if applicable. [1:08:33](https://vimeo.com/1176563546#t=4113s) If applicable, such terms shall only be enforceable if agreed separately in a signed form laying out such condition. So they're having to not only disclose that this is an optional service, that this is what this would do for you in the event that you'd lose your equity, especially, they're coming in under the, under self-interest because they're likely putting down a lot of cash in this deal. You know, so these will be offered to people who have a large equity stake in a vehicle. [1:09:04](https://vimeo.com/1176563546#t=4144s) They're, i.e., I, you know, sold something or, you know, I sold some equipment and now I want to go buy a truck with it, so I'm gonna put cash in it. So, um, if you... So not only do you have the disclosure on the front end, but on the back end you also have a 30-day free look period. So you go purchase this, you get home, you talk to your spouse, and they say, "Well, that was an idiot move. You only put $500 down," you know. "John, what, what were you thinking?" Well, now you get a 30-day look-back period, which you, you'd be afforded a full refund, so long as you didn't use the benefit, right? [1:09:38](https://vimeo.com/1176563546#t=4178s) So if you wreck the car within 30 days and use the benefit, of course, you wouldn't be eligible for a refund, but as long as you don't use a benefit, you get that free 30-day look, look-back period. [1:09:47](https://vimeo.com/1176563546#t=4187s) Thank you. [1:09:48](https://vimeo.com/1176563546#t=4188s) Thank you. [1:09:49](https://vimeo.com/1176563546#t=4189s) Senator Brass, you're recognized. [1:09:52](https://vimeo.com/1176563546#t=4192s) Thank you, Mr. Chairman. So I just wanna make sure I understand the overall bill. So you're, you're saying if you pay cash for a vehicle, you're, you can't purchase gap insurance? [1:10:03](https://vimeo.com/1176563546#t=4203s) Well, so gap would protect the, the amount of a loan versus the value of the vehicle. This doesn't... A gap, gap insurance does not protect the equity that a consumer has in the vehicle. So- [1:10:15](https://vimeo.com/1176563546#t=4215s) Well, it protects the equity for the, for the bank- [1:10:18](https://vimeo.com/1176563546#t=4218s) For the bank [1:10:18](https://vimeo.com/1176563546#t=4218s) ... or the loan. [1:10:19](https://vimeo.com/1176563546#t=4219s) That, that- [1:10:19](https://vimeo.com/1176563546#t=4219s) Yeah. Okay [1:10:20](https://vimeo.com/1176563546#t=4220s) ... that's right. That's correct. [1:10:20](https://vimeo.com/1176563546#t=4220s) So you're doing this for the cash and then naming it something else. [1:10:24](https://vimeo.com/1176563546#t=4224s) Yeah. [1:10:25](https://vimeo.com/1176563546#t=4225s) And then the... Is there anything currently that prevents a company from doing this, providing this service? [1:10:32](https://vimeo.com/1176563546#t=4232s) Yeah. Well, you would have to put it in statute for them to be able to, for them to be able to, uh, do this today. That's right. So today, they're prohibited to do it 'cause, like, this is not in law today. [1:10:42](https://vimeo.com/1176563546#t=4242s) But is there anything that prevents from doing it? [1:10:45](https://vimeo.com/1176563546#t=4245s) My understanding is that they need the bill to be able to sell these products. That's right. [1:10:48](https://vimeo.com/1176563546#t=4248s) Okay. And then- [1:10:49](https://vimeo.com/1176563546#t=4249s) They're, they're regulated in such a way that they would have to have the bill [1:10:51](https://vimeo.com/1176563546#t=4251s) ... and you've got your consumer protections built in here, I see. [1:10:54](https://vimeo.com/1176563546#t=4254s) Yes, sir. [1:10:55](https://vimeo.com/1176563546#t=4255s) And is there anything in these consumer protections that would preclude a competitor of, say, one of these companies doing this? [1:11:07](https://vimeo.com/1176563546#t=4267s) That would preclude a competitor? [1:11:08](https://vimeo.com/1176563546#t=4268s) I mean, is this a vendor bill that's gonna help one company and rule out others? [1:11:12](https://vimeo.com/1176563546#t=4272s) No, there's- [1:11:12](https://vimeo.com/1176563546#t=4272s) Is my question [1:11:13](https://vimeo.com/1176563546#t=4273s) ... there's a lot of different... So most- [1:11:14](https://vimeo.com/1176563546#t=4274s) 'Cause I'd see that a lot around here- [1:11:15](https://vimeo.com/1176563546#t=4275s) Most companies that sell- [1:11:16](https://vimeo.com/1176563546#t=4276s) ... and I just wanna make sure that we know what we're doing [1:11:17](https://vimeo.com/1176563546#t=4277s) ... yeah, thank you. Uh, look, I think most of the companies that sell gap insurance today also sell these products in other states. As to the total number of states, I think that was, uh, Chairman Albers' question. He'll be able to tell you the number of states that are doing it, but it is multiple states. So that's Travis. He's online. He'll answer some questions here in a moment, but there's multiple states that are selling it- [1:11:38](https://vimeo.com/1176563546#t=4298s) Well, Travis is the one I wanna make sure we're not helping him and hurting others [1:11:42](https://vimeo.com/1176563546#t=4302s) ... so, uh, yeah, y- please, absolutely. [1:11:44](https://vimeo.com/1176563546#t=4304s) No offense to Travis. [1:11:45](https://vimeo.com/1176563546#t=4305s) But there are several companies that sell these products. It's not just one or something like that. [1:11:49](https://vimeo.com/1176563546#t=4309s) Okay. [1:11:49](https://vimeo.com/1176563546#t=4309s) It's, it's these companies that, if you imagine, they are, they have certain agreements with financial institutions like credit unions or, or a big part of this, uh, I think, financial ecosystem here. A lot of credit unions in other states sell these products. [1:12:04](https://vimeo.com/1176563546#t=4324s) Okay. [1:12:04](https://vimeo.com/1176563546#t=4324s) Yeah. [1:12:05](https://vimeo.com/1176563546#t=4325s) Thank you. [1:12:06](https://vimeo.com/1176563546#t=4326s) I got one more, Mr. Chairman. [1:12:07](https://vimeo.com/1176563546#t=4327s) Senator Williams will be recognized next, then Senator Ginn, then you, Senator Summers. [1:12:12](https://vimeo.com/1176563546#t=4332s) Thank you. This, uh, this is not gonna get us started on telephone calls like trying to buy the extended warranty on our cars, is it? [1:12:21](https://vimeo.com/1176563546#t=4341s) No, sir. No, that's, uh, that's totally different. [1:12:24](https://vimeo.com/1176563546#t=4344s) All right. [1:12:24](https://vimeo.com/1176563546#t=4344s) Um, but this, this has nothing to do with a extended warranty per se, 'cause it really doesn't have anything to do with protecting the mechanical operability of the vehicle. This is only about the, the, the equity that you own in that vehicle, in protecting that value, uh, you know, after w- an adverse event. [1:12:44](https://vimeo.com/1176563546#t=4364s) Thank you. [1:12:45](https://vimeo.com/1176563546#t=4365s) Senator Ginn? [1:12:47](https://vimeo.com/1176563546#t=4367s) Thank you, Mr. Chairman. [1:12:51](https://vimeo.com/1176563546#t=4371s) Uh, let me ask you, if I get back to 60,000 feet, I, I, I called, I was on the phone la- yesterday with my insurance company. Uh, w- somebody hit me, and I had a vehicle replacement, and my insurance company asked me, said, "Hey, would you like to buy gap coverage insurance?" The, uh... So, and, and you know that, I just drop a name, that was USAA. [1:13:14](https://vimeo.com/1176563546#t=4394s) Mm-hmm. [1:13:14](https://vimeo.com/1176563546#t=4394s) And they said, "Yeah, y- you know, you..." I, I, and I said, "Well, what is that?" And they told me a little bit about what it is. So back up and tell me from a 60,000-foot level w- what it is that we're doing again, 'cause I'm still not sure- [1:13:26](https://vimeo.com/1176563546#t=4406s) Yeah [1:13:26](https://vimeo.com/1176563546#t=4406s) ... that, you know, I, if I know insurance companies can already do this, then what is this bill actually doing that, that can't be done today? [1:13:34](https://vimeo.com/1176563546#t=4414s) Right. So backing up that far, the premise is largely the same with one caveat. That is, gap insurance today protects financial institutions from having a consumer who's holding the bag with the difference between the, the amount of the loan and the value of the vehicle. So if you were to wreck that vehicle, and there's, let's say, a $4,000 difference between the value of the vehicle and, uh, and what was outstanding on that loan. [1:14:07](https://vimeo.com/1176563546#t=4447s) So for, let's say somebody goes and gets a six or seven-year loan, right? They may have out... There may be outstanding, uh, loans, right, that are above and beyond what the value of the actual vehicle is. So we saw a lot of trucks getting sold, especially during COVID, right? That w- they had 15,000, 20,000 miles, and they were selling for 15,000 or 20,000 more than MSRP 'cause they just weren't being produced. Well, that value is on the books for the credit union, okay? [1:14:38](https://vimeo.com/1176563546#t=4478s) And with gap insurance, if I still owe 60,000, but the vehicle's only worth 40,000, then that makes the credit union or the bank whole. So that's what gap insurance really does on this side. On the other side, right, at the 60,000-foot view, this does the same but for the consumer themself, right? So this allows them to protect the equity if they were to pay cash, and ultimately, if the consumer was the one who's left holding the bag. [1:15:08](https://vimeo.com/1176563546#t=4508s) You know, while maybe a consumer doesn't hold, uh, financial statements and reports in their hand, they know, "I, I paid 60,000, you know, for this vehicle. It's only worth 40,000 today when I got the insurance, uh, back on it." So they're left with a, with a, you know, uh, discrepancy of almost $20,000. Well, an agreement like this would protect that value. [1:15:33](https://vimeo.com/1176563546#t=4533s) If, if I might, Mr. Chairman. So- [1:15:36](https://vimeo.com/1176563546#t=4536s) Sure [1:15:36](https://vimeo.com/1176563546#t=4536s) ... I, I use my homeowner's as an example. I have what they call full replacement cost insurance on my home. Doesn't matter what it costs to the, uh, my insurance company's on the hook to rebuild it. So it sounds like this gap coverage is basically full replacement cost on a vehicle. Is that not correct? [1:15:53](https://vimeo.com/1176563546#t=4553s) And I will tell you as somebody who's tried to get full replacement coverage on my home, don't ever get rid of that policy. Those are hard to get today. Um, so this is a little different because you're dealing with something that loses value. A home is something that appreciates value. [1:16:07](https://vimeo.com/1176563546#t=4567s) Sometimes they do, sometimes they don't. Well, I've seen, you know, 2008, hey, there they went. [1:16:12](https://vimeo.com/1176563546#t=4572s) Right. [1:16:12](https://vimeo.com/1176563546#t=4572s) Should they, uh... Uh, but, but my question is, is, is, you know, and I'm, I'm concerned in an automobile that as you, you- typically these, these things do depreciate. [1:16:24](https://vimeo.com/1176563546#t=4584s) Correct. [1:16:24](https://vimeo.com/1176563546#t=4584s) Should they, uh... Ah, the more miles you're putting on them, the more wear and tear, those kind of things, the age. [1:16:29](https://vimeo.com/1176563546#t=4589s) Sure. [1:16:29](https://vimeo.com/1176563546#t=4589s) But what, what would be gap coverage on a car? The, uh, because you know, you, you know, if the car costs you $60,000 in your example, and, and now it's worth, worth $40,000, okay, that's because you drove it, it's got time and the things there. So is this $20,000 of coverage to get you back to full retail price? [1:16:52](https://vimeo.com/1176563546#t=4612s) No. So it's, it's depending on the val- so, or- [1:16:55](https://vimeo.com/1176563546#t=4615s) I, I, I borrowed, I borrowed $60,000 and I went to, to out there and I said, "Hey, now the car's totaled and it's, and, and the insurance company only wants to pay me $40,000." And the gap coverage, is that, is that the difference between what the insurance company wants to pay for your car? [1:17:10](https://vimeo.com/1176563546#t=4630s) Well, Senator, I mean, if you took out a loan on the vehicle, then that would be gap coverage. [1:17:14](https://vimeo.com/1176563546#t=4634s) Okay. [1:17:15](https://vimeo.com/1176563546#t=4635s) So- [1:17:15](https://vimeo.com/1176563546#t=4635s) So I, so I borrowed $60,000 in your example. [1:17:17](https://vimeo.com/1176563546#t=4637s) So that's, that's permissible today. That's, that's, yeah- [1:17:20](https://vimeo.com/1176563546#t=4640s) And, and a- and, and it's only worth 40 when the insurance company totaled it. So- [1:17:23](https://vimeo.com/1176563546#t=4643s) So under gap coverage, then the lender would be made whole because you took out a loan. [1:17:27](https://vimeo.com/1176563546#t=4647s) And, and that, that could be, that could be, you know, w- let's just say that I made two payments and it's, it's now, uh, $58,000. So that $18,000 of coverage is, is gonna be paid as, as gap coverage. But that's paid to a third party. The, uh... And, and you know, one of the things that, that to me, I'm, I'm almost worried that gap coverage for an individual, for a lot of people, they could say, "Well, I wanna sell my car tomorrow. Let me find a tree." Is there a problem? Do you... Is, is that a potential, uh, of what could happen with this? [1:17:59](https://vimeo.com/1176563546#t=4679s) Is that, you know, we have a lot of insurance fraud a- as it is, and, uh, you know, I need, I need $58,000. I'm gonna take my, my car and I'm gonna find a tree. [1:18:09](https://vimeo.com/1176563546#t=4689s) Well, I think there's two parties to the deal. So I, I think largely what you talked about is gap insurance, which is covered today. I think the premise of the other conversation is if two people willingly enter into a contract to protect, uh, you know, a company wants to protect the value and the consumer wants to protect their value, they, they enter into that conversation willingly. What I would tell you is, as to the fraud that happens today in these agreements, you'll have to ask Travis that. He probably has a better context of the fraud that either is happening, has happened, and how they protect themselves from that fraud, uh, in this, in this, uh, in this industry. [1:18:47](https://vimeo.com/1176563546#t=4727s) You know, they- [1:18:47](https://vimeo.com/1176563546#t=4727s) I'm, I'm not an expert. [1:18:49](https://vimeo.com/1176563546#t=4729s) They, they tell me the, the life insurance world is, is, you know, you gotta die to collect, and most people aren't ready to do that. But somebody else can collect, and unfortunately, we see a lot of, uh, of claims that are made from people that, that, uh, are, are, are responsible for murder. And I'm just kinda curious, in this gap coverage, are we setting somebody up to, to giving them incentive they, uh, ah, that, that could turn around and, and ah, see a lot of, lot of fraud or potential fraud? [1:19:18](https://vimeo.com/1176563546#t=4758s) Well, and, and thank you for that. I, look, I, I think that in almost every industry we find fraud. If you have, you know, an amendment, of course, to memorialize how we can prevent that from happening, I would say that the providers would wanna prevent fraud as much as you do, Senator. That, you, you, you're on their side, and so we appreciate, uh, that perspective. Uh, if, if that's something that you'd like memorialized that we can figure out how to prevent fraud on these companies, uh, I'm always for that. Thank you. [1:19:47](https://vimeo.com/1176563546#t=4787s) Senator Summers, you're recognized for a question. [1:19:50](https://vimeo.com/1176563546#t=4790s) Thank you, Mr. Chairman. Uh, Representative Ginn, um, [1:19:55](https://vimeo.com/1176563546#t=4795s) totally new to this. I mean, this is, I, I, I, um, I got a, I, I got a flyer sheet on it, you know, this morning, and I'm trying to figure out where we are and what we're doing. [1:20:04](https://vimeo.com/1176563546#t=4804s) Yeah. [1:20:04](https://vimeo.com/1176563546#t=4804s) This is a one-time cost. Make sure we understand, one time. Other words, they paid up front one time. [1:20:08](https://vimeo.com/1176563546#t=4808s) Yes, sir. That's correct. [1:20:09](https://vimeo.com/1176563546#t=4809s) Um, does it apply to all vehicles? [1:20:14](https://vimeo.com/1176563546#t=4814s) Does it apply to... I would say this applies to any vehicle that you'd, that you'd go to purchase. Uh, you know, I think- [1:20:20](https://vimeo.com/1176563546#t=4820s) What about a semi truck? What about- [1:20:22](https://vimeo.com/1176563546#t=4822s) That you'll have to add. So my understanding, these are consumer vehicles that- [1:20:28](https://vimeo.com/1176563546#t=4828s) That is a consumer vehicle [1:20:29](https://vimeo.com/1176563546#t=4829s) ... Well, you'd have to, you know, I, I would think like your normal non-CDL type trucks. Now, they, they may cover those. I'll leave that question to Travis. I just simply don't know the answer to that question. [1:20:40](https://vimeo.com/1176563546#t=4840s) Like let's, let's use, for example, a 350 Ford farm truck. I mean, you know, since it's used for, and it does get bent up, beat up, and chewed up. I'm just throwing this out at you. I'm, I, I saw where Senator Ginn was going regard with his find a tree statement. [1:20:54](https://vimeo.com/1176563546#t=4854s) Sure. [1:20:54](https://vimeo.com/1176563546#t=4854s) And, and, um, a- it concerns me that, that, that it's out there. Then also, uh, uh, do you have an average cost? I mean, you may have said that somewhere in the brain. I'm reading this thing here. I mean, let's just say your Toyota Corolla that you spoke about a while ago. [1:21:06](https://vimeo.com/1176563546#t=4866s) Yes. [1:21:06](https://vimeo.com/1176563546#t=4866s) 20, mid-20s. [1:21:07](https://vimeo.com/1176563546#t=4867s) Yeah. [1:21:08](https://vimeo.com/1176563546#t=4868s) What would it cost you to engage in this kind of contract up front? [1:21:13](https://vimeo.com/1176563546#t=4873s) My understanding is they're less than, you know, 5, 600 bucks. But we'll let Travis answer the question on the types of vehicles and both the cost. I think that would be edification for everybody here to give more exact numbers. Anything that I gave you'd be based on memory of what we've talked about in my study, and I can tell you it took me many years to get through college. It probably wouldn't be worth much. [1:21:34](https://vimeo.com/1176563546#t=4894s) All right. Let's go a little deeper then. Let's go to what Senator Williams spoke about regarding, uh, warranties, et cetera. You know, our, you know, you, when you get real old, you'll always have somebody calling you to visit with you to sell you a car warranty. You know what I'm saying? You'll never be lonely. So here we are. Let's just say you- here's how you take the car and let's just say your transmission goes out or your engine goes out of the car and your car's worth f- five thousand bucks, it's gonna cost you eight thousand bucks to get it running again. Why would you not... How would you be able to just to junk that car and then pick up the additional coverage that this may allow and not be caught in quote, quote fraud m- or this company saying, "No, no, no, you gotta repair your car before we can pay that"? [1:22:14](https://vimeo.com/1176563546#t=4934s) I mean, you're gonna be in... You're gonna get... There's gonna be a lot of... I'm with you. I, I'm- [1:22:19](https://vimeo.com/1176563546#t=4939s) Yeah [1:22:19](https://vimeo.com/1176563546#t=4939s) ... get me there. [1:22:20](https://vimeo.com/1176563546#t=4940s) Y- yeah. I, I would, I think there could be certainly a lot of edge cases where folks are interacting in that manner. I don't think that that's the large majority. I think if there was... If, if the industry was that rife with fraud, then I don't know that, you know, these folks would wanna be able to sell these products in the state of Georgia, right? Um, I, I think there's a, a good trade-off for, uh, protecting consumer value and also having a good, uh, financial ecosystem, uh, for these folks who sell it. [1:22:51](https://vimeo.com/1176563546#t=4971s) As for the, you know, amount of fraud that's happening, again, I'll, I'll refer you back to w- what I've told to Senator Albers and Senator Ginn. We'll wait for the expert testimony on the folks who actually operate these things every day. Uh, and they, they'll be able to give you the details that I think that you're looking for, but, uh, and that'll be a healthy discussion. [1:23:12](https://vimeo.com/1176563546#t=4992s) One more question, Mr. Chairman. [1:23:13](https://vimeo.com/1176563546#t=4993s) Go on. [1:23:14](https://vimeo.com/1176563546#t=4994s) But, okay, it's not mandatory, obviously, and you can cancel this shit in the first 30 days. [1:23:21](https://vimeo.com/1176563546#t=5001s) Yes, sir. [1:23:21](https://vimeo.com/1176563546#t=5001s) The question I have for you is, is if something like this were to become available, and I don't wanna get caught in a trap- [1:23:26](https://vimeo.com/1176563546#t=5006s) Yeah [1:23:26](https://vimeo.com/1176563546#t=5006s) ... but I want mortgage companies, nefarious mortgage companies or, or in general mortgage companies to then all of a sudden say, "Well, we, we want you to have this. We require you to have this," because of the difference it could cost them of getting theirs. So can you get me there? [1:23:43](https://vimeo.com/1176563546#t=5023s) Yes, I can. So with this here, uh, well, with th-this here, it cannot be a condition of the sale, period. [1:23:50](https://vimeo.com/1176563546#t=5030s) I gotcha. I gotcha. [1:23:51](https://vimeo.com/1176563546#t=5031s) That, that, that's written in the bill. Um, I, I will just ask something to, I think, the previous question. He was, it, it had multiple parts, but one of the parts was, is this gonna be like one of these home warranties where you're dialing people in the middle of the night and doing, you know, "Hey, can you, you know, do you wanna talk about your car's extended warranty?" I think that's the meme of, of 2025. Um, that is not applicable here 'cause you've paid for it once. It operates as a, as a product that goes during the, uh, the tenure which you own that vehicle. So that, that wouldn't be applicable here 'cause we're not ta- we're not talking about a transmission or the, or the operability of the vehicle. [1:24:27](https://vimeo.com/1176563546#t=5067s) But- [1:24:28](https://vimeo.com/1176563546#t=5068s) No, I'm just talking about the difference of the what the fee would be worth if you had to replace all that, and obviously it wouldn't be worth replacing that vehicle, so you'd be able to pick up money. Would you be able to pick up money with this GAP program, I guess, is what I'm saying? [1:24:38](https://vimeo.com/1176563546#t=5078s) I think that's something that, that Travis will be able to answer to you in more detail. [1:24:42](https://vimeo.com/1176563546#t=5082s) Oh. Thank you, Mr. Chairman. If you're, if you purchase this and you, and you have this in your system, is the $500 you mentioned, I'm not holding you down here, is that for all vehicles? Or would, say, the vehicle costs $100,000, it'd cost you $2,000. I mean, is using that, is there a, a scale there? [1:25:05](https://vimeo.com/1176563546#t=5105s) I would imagine that it's not a flat fee- [1:25:07](https://vimeo.com/1176563546#t=5107s) Right [1:25:07](https://vimeo.com/1176563546#t=5107s) ... but you'd have to, again, to, as, as, I think, uh, forget whose question that was on the, uh, on the value of the vehicles and how much these things cost. Th- they're happy to answer that question. [1:25:19](https://vimeo.com/1176563546#t=5119s) Yeah, there's gotta be an actuary somewhere. [1:25:21](https://vimeo.com/1176563546#t=5121s) I'm sure there is. [1:25:22](https://vimeo.com/1176563546#t=5122s) It had to be somewhere. [1:25:22](https://vimeo.com/1176563546#t=5122s) Yes, that's right. I don't know the details on the cost specifically. [1:25:25](https://vimeo.com/1176563546#t=5125s) Who is this person you're talking about? [1:25:26](https://vimeo.com/1176563546#t=5126s) This is, uh, Travis. I think he's with the, uh, association. [1:25:32](https://vimeo.com/1176563546#t=5132s) If y'all through asking questions to the author, we'll let Travis speak. Any other questions? All right. Travis Moore, can you hear us? [1:25:40](https://vimeo.com/1176563546#t=5140s) I can hear you. Can you hear me? [1:25:41](https://vimeo.com/1176563546#t=5141s) All right. We can hear you great. Uh, if you would introduce yourself and give us your thoughts about this bill. [1:25:49](https://vimeo.com/1176563546#t=5149s) All right. Thank you so much, Chair. [1:25:50](https://vimeo.com/1176563546#t=5150s) You, you know it as House Bill 504, but it's now, uh, it's changed a little bit during the process. Same language, but it's House Bill 187 at this time. [1:26:00](https://vimeo.com/1176563546#t=5160s) Yeah, so th- and thank you, Chair. Thank you for the opportunity to testify in support of House Bill 187. Uh, my name is Travis Moore. I'm general counsel for the Guaranteed Asset Protection Alliance or the GAP Alliance. We represent the nation's leading vehicle financial protection product providers. Um, our mission is to preserve the viability of our industry and promote fair and equitable regulations. As, as a trade, we prefer statutory clarity and consumer protection to legal gray areas, uh, and we develop model legislation that reflects that. [1:26:34](https://vimeo.com/1176563546#t=5194s) In fact, Georgia adopted GAP's model legislation on GAP, Guaranteed Asset Protection, more than a decade ago. Since that time, the trade has developed that model to encompass a wider grouping of vehicle financial protection products, which includes these vehicle value protection agreements, uh, which Representative Monahan has been describing to you. Um, House Bill 187 is the codification of that model language. Currently, Alabama, Colorado, Florida, Missouri, North Carolina, Ohio, Oklahoma, Texas, and Utah all, all have statutory frameworks for offering these types of vehicle value protection agreements, and we continue every year to expand upon that. [1:27:22](https://vimeo.com/1176563546#t=5242s) Um, rather than go into details on these products, as I know M- uh, Representative Monahan has done a nice job of describing the difference between traditional GAP, which is fairly ubiquitous, and again tied to the, uh, vehicle finance agreement, uh, and vehicle value protection agreements, which protect that down payment, that equity in the vehicle. Uh, I will hit on, uh, hopefully some of the questions that have been previously asked, and then obviously invite any additional questions. [1:27:52](https://vimeo.com/1176563546#t=5272s) Um, one of the topics that I believe came up- Was whether or not these products are avail- available on commercial vehicles. Um, some companies do in fact write products for commercial vehicles. There are some differences in how they structure those, and pricing might be different, um, but this legislation would allow for that and apply to those commercial co- commercial contracts as well as consumer contracts. On the question of cost, there is a range of costs, and this is also very similar. GAP is, is k- similar in this way in that it is... [1:28:24](https://vimeo.com/1176563546#t=5304s) It's not an individually underwritten product. It looks at the individual consumer purchasing it, but there is somewhat of a complex matrix that involves, you know, the original purchase price of the vehicle, the type of vehicle, et cetera. So it factors in a number of different items, uh, about the vehicle in order to determine the exact cost, um, associated with that product. So it can range. So in some instances, it could be as low as four or $500. It could go up to, you know, one or $2,000 on a higher end premium vehicle. [1:28:57](https://vimeo.com/1176563546#t=5337s) Um, that's roughly your ballpark. Again, it, it very much depends on the vehicle as well as exactly how those benefits are tailored. Um, the other issue that I heard come up was one of, of fraud, and frankly, uh, this isn't something that I've heard come up a lot in this space, is that from our member companies dealing with fraud. I, I would like to think it's not a huge problem. We certainly don't mean to incentivize fraud through these products. I think one thing that I would call out about the legislation and the way these products function is that they're not intended to be purely a cash in the pocket benefit. [1:29:33](https://vimeo.com/1176563546#t=5373s) It does protect that down payment that you place, but the way that these products are structured are really a credit towards a replacement vehicle. So you may, to some degree, uh, incentivize someone who wants a new car, but it's not like you're incentivizing like health insurance where... or life insurance, where someone's trying to collect a, a large sum of money just to sort of take the money and run, for lack of a better term. So I, I don't know if that's a complete... completely addresses the issue of fraud. Again, certainly don't intend to incentivize or support it, but what we do wanna do is offer consumers an opportunity to protect that down payment. [1:30:10](https://vimeo.com/1176563546#t=5410s) And again, this is either a cash purchase, or oftentimes it could just be a consumer who likes to maybe put 50% down. I'm one of those people who doesn't wanna be upside down on my loan. If I was, I'd purchase GAP coverage. If I'm not, then I have this option of a vehicle protection product, um, that would protect that significant amount of money that I placed as a down payment. 'Cause I think we all know as these products roll off the lot, as vehicles roll off the lot, they depreciate rather rapidly, not just because of mileage. Um, I think the last question that I hopefully will be able to address, which I think is probably something everyone is always curious, you know, wh- why do we need this? [1:30:49](https://vimeo.com/1176563546#t=5449s) Um, what are we trying to do? Can these products be offered today? Why can't they be offered today? Um, well, that really ties back to where I started with why our trade association approaches this through model legislation. Um, without this model act, without a clear statutory framework, there is some uncertainty around what these products are and how they may or may not be offered to consumers. We've had, in different states over the years, opinions on whether or not this, this product... [1:31:19](https://vimeo.com/1176563546#t=5479s) Actually, typically determining that this product is not insurance, but it looks enough like it, it has a relationship to insurance, that barring clear statutory guidance and framework establishing, uh, these rules of the road for the products, our member companies are certainly apprehensive and frankly will not offer these products in states that have not passed this type of statutory framework. Uh, and so that is what we're here to do, to expand upon, uh, state law to ensure that these legitimate, good, reputable companies can offer these valuable products to consumers and ensure that anyone else who wants to get into this market has a set of rules that they have to follow that protect consumers. [1:32:04](https://vimeo.com/1176563546#t=5524s) And so that we don't have a little bit of that gray area where someone might say, "Ah, it's not an insurance product, I'm just gonna offer it," uh, but not following any set of rules. So that's what we're here to do, is hopefully pass model legislation to protect consumers and enable a healthy market. With that, I'll stop and take any questions you might have. [1:32:22](https://vimeo.com/1176563546#t=5542s) Is there any way this helps members of your organization against companies that are not members? [1:32:30](https://vimeo.com/1176563546#t=5550s) Um, n- no, not in any way that I'm aware of or that isn't cons- pro-consumer. I mean... And what I mean by that is that really our member companies reflect, uh, the vast majority of vehicle financial protection product providers. That includes GAP providers. These are the companies with experience in offering voluntary protection products through dealers to consumers who have existing relationships with the insurance companies who underwrite the backing insurance. And so to the extent you're getting a legitimate high-value product into consumers' hands, this legislation enables that. [1:33:07](https://vimeo.com/1176563546#t=5587s) If it harms anyone, it might harm a company who thinks they can get away with doing this without following the rules that the industry has agreed upon are best practices, uh, again, to protect consumers and promote a healthy market. [1:33:20](https://vimeo.com/1176563546#t=5600s) Well, our very strong, powerful, influential rules qu- chairman had a question earlier about what company this benefits. I'm just reading behind you, you represent the organization as a whole. [1:33:32](https://vimeo.com/1176563546#t=5612s) Correct. [1:33:32](https://vimeo.com/1176563546#t=5612s) So, so, so it, it's just the industry then that you wanna give protections to or clarity to what their obligations are and their ability to do this? [1:33:43](https://vimeo.com/1176563546#t=5623s) Yeah, exactly. We want a level playing field to increase competition. Our... That is a, a cornerstone of what we are trying to accomplish. [1:33:52](https://vimeo.com/1176563546#t=5632s) All right. Senator Brass, I'm gonna let you follow up since you are the strong, powerful influence for- [1:33:57](https://vimeo.com/1176563546#t=5637s) I don't know about all that, but- [1:33:58](https://vimeo.com/1176563546#t=5638s) ... this to get passed, and then, uh, Vice Chairman Summers. [1:34:00](https://vimeo.com/1176563546#t=5640s) Well, I just wanted to clarify, th- that was in no way, those line of questions were in no way insinuating. I was just ensuring, 'cause I do trust the author, and, uh, just wanted to make sure if I was going to, uh, make a motion of due pass, which I'm willing to do at the appropriate time, that I was not, uh, doing such to, to benefit one company. [1:34:25](https://vimeo.com/1176563546#t=5665s) Senator Summers, you're recognized for a question. [1:34:27](https://vimeo.com/1176563546#t=5667s) M- Mr. Travis, a couple questions, if you don't mind. [1:34:30](https://vimeo.com/1176563546#t=5670s) Yeah. [1:34:32](https://vimeo.com/1176563546#t=5672s) You can't, you can't sell your product in Georgia right now? You can't, like, call from Timbuktu and sell somebody insurance if they wanna buy it? Like, or GAP? [1:34:43](https://vimeo.com/1176563546#t=5683s) So, uh, to be... Someone could, in theory, attempt to sell a product like this in Georgia. They risk running afoul without clear statutory framework of state insurance laws, because this is connected to an automobile and a potential adverse event to that automobile. Now, there are, are reasons why the, quote, unquote, "risk" being covered, being depreciation versus a fortuitous event, there are distinguishing factors that make this not insurance. [1:35:13](https://vimeo.com/1176563546#t=5713s) But barring a clear statement, either an opinion directly from the Department of Insurance or legislation, that is a gray, a legal gray area. And so I would say that the, my companies, our membership, are not willing to sell in Georgia without a clear statement that these products are not going to be treated as insurance. There's no risk that a dealer is now selling insurance without a license, 'cause a dealer is not willing to take on that risk. And so this is an opportunity to eliminate any gray area that might exist to where, to your point, you know, perhaps a, dare I say, fly-by-night type company who wants to create a website and then start selling in the state, uh, that's what we don't want to see. [1:35:56](https://vimeo.com/1176563546#t=5756s) We want to see legitimate sellers who know the industry, who have existing relationships with dealers, operating in a way that is consistent with consumer protections, consistent across the states, so you have a fair market across borders. Uh, and, and again, a, a product that value, is valuable to the consumer, and that is a product that is consistent with our model legislation. [1:36:18](https://vimeo.com/1176563546#t=5778s) Yeah. W- my follow-up question then would be, you would be under the Insurance Department of Georgia, is that basically what you're telling me now, if we create legislation? [1:36:28](https://vimeo.com/1176563546#t=5788s) This legislation puts it under the Department of Consumer Protection. This is very similar to a lot of the products in the, uh, ancillary voluntary protection product space around motor vehicles. When you think about service contracts are similar in this way, where some people think of them as being somewhat insurance-y because, oh, my car broke down, I want it to be repaired. It sort of looks like an insurance event except for breakdown is a known thing. We don't know when it's going to happen, but that risk is known, uh, because all cars eventually break down. [1:37:01](https://vimeo.com/1176563546#t=5821s) And accordingly, the Department of Insurance, uh, and, and states nationwide have all agreed that a service contract is not insurance. This is very similar in that way, where it's sort of on that bubble between insurance, but depreciation is a known thing. We know cars are going to depreciate. This isn't about a fortuitous event that's going to occur. So there, there is, again, this is a, an opportunity to create clarity and, and, uh, clear parameters around what the products are while creating a regulatory framework. [1:37:34](https://vimeo.com/1176563546#t=5854s) And again, these are consumer contracts at their core, and so this is regulated by the Consumer Protection Division of the Attorney General's office. [1:37:42](https://vimeo.com/1176563546#t=5862s) And last question. It would cover any vehicle that I asked Representative Monahan a while ago, or just, just cars? [1:37:50](https://vimeo.com/1176563546#t=5870s) Uh, so for this one, let's see how they define, um... It, it's a relatively broad definition of vehicle. Um, you know, I, we don't have this tied to a state-specific definition. Some states narrow that, some have a broader... I think we tend to take a broader perspective on this, but basically any motor vehicle. [1:38:15](https://vimeo.com/1176563546#t=5895s) Thank you, Chairman. [1:38:15](https://vimeo.com/1176563546#t=5895s) All right. I see no further questions. What is the pleasure of the committee? Senator Brass? [1:38:20](https://vimeo.com/1176563546#t=5900s) Well, Mr. Chairman, I'd like to make a motion due pass, um, substitute, by substitute. [1:38:28](https://vimeo.com/1176563546#t=5908s) All right. And that's, uh- [1:38:30](https://vimeo.com/1176563546#t=5910s) Whatever the bill number is [1:38:31](https://vimeo.com/1176563546#t=5911s) ... C60668S. Is there a second? I'll second. Got a second from Secretary Williams. Any further discussion or proposed amendments? Where do I start? All right. What's the pleasure of the committee? All in favor, raise your hand. No, I guess, I guess so. Five in favor. All op- [1:38:56](https://vimeo.com/1176563546#t=5936s) Question, and I'll be honest with you. Um- [1:38:58](https://vimeo.com/1176563546#t=5938s) Thanks, Senator. [1:38:59](https://vimeo.com/1176563546#t=5939s) All opposed? We got four folks- I vote in favor of it. Excuse me? I vote in favor of it, just 'cause it's Mark. That's the way I look at it. Yeah, we, we counted your vote that way. So it pa- you're, you're the deciding vote. Passed 5-4. It'll move on to Rules. [1:39:13](https://vimeo.com/1176563546#t=5953s) Thank you. I appreciate you. [1:39:15](https://vimeo.com/1176563546#t=5955s) All right. Thank you. [1:39:29](https://vimeo.com/1176563546#t=5969s) Thank you. [1:39:32](https://vimeo.com/1176563546#t=5972s) Hello, Chairman. [1:39:35](https://vimeo.com/1176563546#t=5975s) Back it up. [1:39:39](https://vimeo.com/1176563546#t=5979s) You, you, about to say, thought I'd say- [1:39:41](https://vimeo.com/1176563546#t=5981s) Are you covering Frank's new car [1:39:47](https://vimeo.com/1176563546#t=5987s) GAP insurance in [1:57:35](https://vimeo.com/1176563546#t=7055s) 34. Um, I'm gonna present this, and we're gonna take testimony. I'm not sure if we'll have time to act on it yet or not today 'cause we're running a tight clock here. Last year, the Senate passed Senate Bill 254. I sponsored the bill, and it was passed out of this committee. It later passed on the floor after being tightened up, uh, significantly from what, what had passed out of the committee. The, the gist of it was we were trying to limit the amount of THC in hemp products, and we limited the gummies to 10 milligrams of THC per gummy, and we limited the beverages to five milligrams per 12-ounce can. [1:58:24](https://vimeo.com/1176563546#t=7104s) We also closed what they call the Delta-8 loophole. Uh, Delta-9 is the naturally appearing THC in the cannabis plant, uh, but they have figured out ways to synthetically create Delta-8, Delta-10, Delta-11, and EXO-THC that also are just equally intoxicating as the naturally occurring Delta-9. So this addressed the total THC, whichever compound it was. [1:58:55](https://vimeo.com/1176563546#t=7135s) Um, [1:58:58](https://vimeo.com/1176563546#t=7138s) later, the bill, after passing the Senate, was assigned to House-Regulated Industries, and they have made several iterations of it. The one that actually passed, uh, is a bill that, uh, has nothing to do with THC, uh, that it deals with COAM machines. And so they essentially stripped our, uh, hemp beverages or hemp, you know, products, um, bill and made it a whole nother subject matter. [1:59:30](https://vimeo.com/1176563546#t=7170s) So this is simply reconstituting our bill as it passed committee last year. I haven't looked up what the vote was in committee, but I have added a couple of provisions. One was in deference to the vice chairman who had a separate bill that allowed the sale of hemp beverages in package stores as well as convenience stores or grocery stores. Um, and that is on the page 11. [2:00:01](https://vimeo.com/1176563546#t=7201s) It's just that one little paragraph C that says, uh, essentially, liquor stores will be allowed to sell these hemp products or hemp beverages. The other change that I found to be, uh, important, and I, I think the minority leader might comprehend this having been a previous solicitor. If you look on page seven at lines 162 to 165, it requires there to be a label on these products that consumption of these TH- hemp-based THC beverages can impair your ability to operate a vehicle, and it can constitute driving under the influence of alcohol. [2:00:43](https://vimeo.com/1176563546#t=7243s) There's two ways to be DUI in Georgia. One's DUI alcohol. The other's DUI drugs. Alcohol, we all know the .08 or above are the, the permitted levels. Uh, you can actually drink and drive. You just can't drink so much that you're impaired, and that's where we came up with the per se violation if you're .08 or above. On drugs, on the other hand, there's no, uh, particular concentration, so any amount of cocaine or amphetamines or, uh, other drugs that impair your ability to drive, including THC, are DUI drugs. [2:01:18](https://vimeo.com/1176563546#t=7278s) And I f- felt like it's important for people that are consuming these beverages that are being legally sold to understand that that doesn't mean that you can drive a car after doing it. Just like it's legal to sell alcohol to somebody over 21, but you can't go drive drunk. Uh, and I wanted to put that on this. The final thing, which is kind of a twist that, that I don't know how any of these bills are gonna end up being handled after November 1st, but in the big beautiful bill, there is a ban that, um, any product that has more than .4 milligrams of THC will be illegal to sell in the United States nationwide, uh, which is essentially less than a tenth of what this bill provides. [2:02:13](https://vimeo.com/1176563546#t=7333s) Uh, and it's, you know, 1/25 of what the current ag department regulations allow, up to 10 milligrams. So it basically says no consumable hemp product shall be sold or otherwise distributed if it's in violation of federal law regarding the amount of THC, uh, in the hemp. That law goes into effect November 1st, so we may be just legislating for the next six months here anyway. Uh, once that takes place, it would supersede any state laws, but I wanted to make clear that everybody was aware of that. [2:02:49](https://vimeo.com/1176563546#t=7369s) Uh, so I want to, uh, allow any testimony. I see Angela Holland is here that has signed up. If you want to be heard, if you'll go to the podium, and then I'm happy to answer any questions, and we'll decide whether or not to move this or not. [2:03:07](https://vimeo.com/1176563546#t=7387s) Certainly. Thank you, Mr. Chairman, members of the committee. Um, I am Angela Holland. I serve as the president of the Georgia Association of Convenience Stores, and we represent roughly a third of the convenience stores in the state. Our membership includes small multi-generational companies as well as larger corporations. In the convenience store industry, I am confident that my members ensure that adult age-gated products are delivered, stored, and sold sensitively and sensibly My members know how to do this and they do it very well. [2:03:43](https://vimeo.com/1176563546#t=7423s) We successfully age-gate alcohol, lottery, and tobacco products, and we ensure that sales taxes are remitted. And when my members own the store and the wholesale operation, we successfully remit excise taxes. And we safely provide fuel and other combustible mark, uh, products to the market, and we fuel the public in every sense of the word. [2:04:09](https://vimeo.com/1176563546#t=7449s) Upon quick review, we believe that this version has the effect of banning all consumable hemp products on the market. And while well-intentioned, we believe that a ban would actually serve to increase the dangers for Georgians, remove a robust growing part of the economy, and punish the good actors. Ultimately, we'd like to ask the Georgia Legislature to continue their support of the Department of Agriculture and its efforts to robustly implement the regulatory framework that the legislature has only recently adopted. [2:04:47](https://vimeo.com/1176563546#t=7487s) Changes take time, and they are doing an incredible job at moving this newly regulated industry into compliance. Thirteen months ago, the industry was completely unregulated. During the '24 legislative session, Commissioner Harper, Catherine Russell, and their team were successful in working with you all to create a robust framework for hemp products. Now, Justice Brandis said in 1913, "Sunlight is said to be the best disinfectant," advocating that transparency is best for pros- exposing wrongdoing. [2:05:29](https://vimeo.com/1176563546#t=7529s) And you all, along with the department recognizing that, chose to bring the entire industry into the light by requir- requiring everyone involved in the hemp industry, from growers to retailers, to be licensed. Knowing where these players are is critical to ensuring compliance with broader goals. You age restricted the products. You required retailers to post signage accordingly, required packaging to ensure products would not be attractive to children, QR codes, and strict ingredient labeling. [2:06:02](https://vimeo.com/1176563546#t=7562s) You limited the amount of THC and created a thoughtful licensing structure, defined permitted and prohibited hemp products, created a required test-- sample testing program, and additionally, you created a disposal process for non-compliant products. And most importantly, you created a program that department can enforce. After the enactment of Senate Bill four ninety-four, the Department of Agriculture worked diligently, str- stringently, and thoroughly to craft re- regulations that were necessary. [2:06:35](https://vimeo.com/1176563546#t=7595s) And I want to thank the department for consistently attending events in an effort to share information on hemp , excuse me, how to stay in compliance and follow the guidelines and the new laws. Not only have they intense-- in- instituted a no- a new program, established rules and regs, and completed at least eleven hundred compliance inspections in the last twelve months, they also created the best program in the country. Last year, I attended a national conference where a global convenience store member commented on stage in front of hundreds of people that Georgia has the most thorough regulations in the country. [2:07:14](https://vimeo.com/1176563546#t=7634s) If we ban hemp in Georgia, I believe we run the risk of creating the era of prohibition. I think we would take these products out of the sunlight and put them back into the shadows and creating black markets. I believe we need to keep these regulations in force to age-gate these products, check for ingredients compliance, and to know where they are by requiring licensings-- license to be held. While there is a federal ban pending, there are efforts afoot to delay that ban in order to create a more robust regulatory framework. [2:07:48](https://vimeo.com/1176563546#t=7668s) But should that ban be delayed, and if Georgia has its own ban, it would most assuredly experience a flood of black market products. Currently, Indiana's Fourth Congressional District Representative Jim Baird has drafted language that, if adopted, would push the implementation out for two years while this twenty-eight billion dollar hemp industry adjusts. And yes, it will adjust, but I don't believe it will go away. [2:08:18](https://vimeo.com/1176563546#t=7698s) I believe that retailers who belong to the Georgia Association of Convenience Stores will stop selling hemp products. Meanwhile, bad actors will keep right on going. And if you don't take my word for it, Catherine Neil Harris, Victoria Jupp, Lisa Pittman at Rice University's Baker Institute for Public Policy said, and I quote, "Prohibition would not succeed in eliminating the availability of these products or in protecting the public. Since no quality of control exists for illegal drugs, placing hemp-derived cannabinoids in this category would exempt them from the very regulations needed to ensure their safety." They further reflect that prohibition would cause the most abiding-- law-abiding hemp manufacturers and retailers, those who are more likely to follow stricter safety guidelines, to exit the market, leaving only less scru- scrupulous actors to supply the de- the demand for the products. [2:09:17](https://vimeo.com/1176563546#t=7757s) Bans don't work. I believe they backfire. And without good regulations, these products could result in what we saw in the 1920s: increased organized crime funding, low public support, and tainted products in the hands of kids. But with good regulations, we know where these products are located, what's in them, and to whom they're sold. And like many of you, I have to go to church on Sunday and explain why I testified in public on the ability to continue to sell hemp. [2:09:47](https://vimeo.com/1176563546#t=7787s) Well, it'll either be sold legally or illegally, and a legally regulated product, I believe, is a far safer option, and that is what we are advocating for. And I'd be glad to take any questions. [2:10:01](https://vimeo.com/1176563546#t=7801s) So you said that this would effectively eliminate the sale. You recognize this just takes it to five milligrams rather than the current ag department regulation that allows 10 milligrams, right? [2:10:13](https://vimeo.com/1176563546#t=7813s) In the hemp drinks, yes, sir. But I believe there's language on line 114 and 115 of page five that was very concerning to us. The total concentration of intoxicating cannabinoids means the concentration of all THC within a sample. So I don't know... I, I believe the department is more, um, educated on how to answer that question, but I do believe that that could be problematic language. [2:10:38](https://vimeo.com/1176563546#t=7838s) That's to keep there from being Delta-8, Delta-10, Delta-11 in addition to the Delta-9, so that the total THC con- concentration's higher. So your industry wants to sell up to, you know, 50 milligrams if it's these other synthetic forms, just not Delta-9? That's the only reason you would oppose this, if you wanted to be able to sell products that had Delta-8, Delta-10, Delta-11 in addition to Delta-9. [2:11:06](https://vimeo.com/1176563546#t=7866s) S- so I, I can tell you this for certain. The, the members of our organization were not selling hemp products until it was a regulated market. And once it became regulated and we had a structure of what we could sell, then they did begin selling what was regulated. [2:11:24](https://vimeo.com/1176563546#t=7884s) This isn't trying to stop you from selling. It's trying to impact the concentrations that you're allowed to sell. Uh, and you mentioned the federal law. With or without this bill, on November 1st, unless these people that are trying to postpone the implementation, you no longer are gonna be able to sell the hemp beverages, right? [2:11:45](https://vimeo.com/1176563546#t=7905s) All over the country. [2:11:46](https://vimeo.com/1176563546#t=7906s) Okay. [2:11:46](https://vimeo.com/1176563546#t=7906s) Which means our bordering states as well, which i- is very important to us. [2:11:51](https://vimeo.com/1176563546#t=7911s) And does your industry oppose the competition from package stores? Uh, is that part of your opposition to the bill? You don't think package stores should be able to sell something that convenience stores can? I mean, they sell beer, they sell wine. Your people sell beer and wine. You just can't sell liquor. [2:12:08](https://vimeo.com/1176563546#t=7928s) Right. [2:12:08](https://vimeo.com/1176563546#t=7928s) Now, you have the advantage. You can sell THC products, but they can't. Is that part of your opposition? You don't want the competition from liquor stores? [2:12:19](https://vimeo.com/1176563546#t=7939s) I d- [2:12:20](https://vimeo.com/1176563546#t=7940s) You have a- [2:12:20](https://vimeo.com/1176563546#t=7940s) I did not address that in, in- [2:12:22](https://vimeo.com/1176563546#t=7942s) Do you have a pro- that's why I'm asking you [2:12:23](https://vimeo.com/1176563546#t=7943s) ... my delivery. Um. [2:12:24](https://vimeo.com/1176563546#t=7944s) Yeah. You got a problem with that provision? [2:12:29](https://vimeo.com/1176563546#t=7949s) No, we don't. [2:12:30](https://vimeo.com/1176563546#t=7950s) Okay. [2:12:30](https://vimeo.com/1176563546#t=7950s) Yeah. [2:12:30](https://vimeo.com/1176563546#t=7950s) Senator Ginn, you're recognized for questions. [2:12:33](https://vimeo.com/1176563546#t=7953s) Thank you, Mr. Chairman. Ms. Holland. [2:12:36](https://vimeo.com/1176563546#t=7956s) Yes. [2:12:36](https://vimeo.com/1176563546#t=7956s) Uh, the driver that's driving the semi that's coming into the convenience store and delivering, uh, product for the convenience store, everything from candy bars to bread to milk to whatever- [2:12:47](https://vimeo.com/1176563546#t=7967s) Yes, sir [2:12:48](https://vimeo.com/1176563546#t=7968s) ... they, uh, he has a commercial driver's license. He knows if he goes in there and, and, and consumes some alcohol, the, uh, and gets above the legal limit, that he's putting h- himself and the company at jeopardy. I think most, uh, drivers, the, uh, most, uh, owners of those trucks know that, "Hey, that's not allowed. We can't do it." But you're talking about selling a product in a store that, uh, quote, "Would be legal," the, uh, that puts every other driver on the road at risk for somebody being impaired. [2:13:23](https://vimeo.com/1176563546#t=8003s) But even after the effect of that, uh, that, uh, narcotic, I'll say, the, uh, has worn off, and maybe that person is not, uh, under the influence technically, we have no way to know, like with alcohol, that this person's blood alcohol limit is, is, uh, safe. With this, once it's put in your bloodstream, it's there for up to 30 days, I understand. [2:13:53](https://vimeo.com/1176563546#t=8033s) How do you, you, uh, explain to that driver that went in and, and, and used some of the product that he's delivering, the, uh, and two weeks later he's driving a truck, gets in an accident, and puts, uh, that company at risk? Because the litigious world that we live in, I'm worried about, uh, you know, that, that driver, the, uh, has this in and out, in his bloodstream, the, uh, and a good attorney s- looks at him and says, "Hey, he was impaired." Yeah, so how do you, how do you defend that for the, the, whether it be a driver of a convenience store, a, a petroleum distributor, should they, uh... [2:14:31](https://vimeo.com/1176563546#t=8071s) Anything that, that, you know, these, these are 80,000 pound plus trucks, the, uh, that are out here on the road, and uh, I, I'm worried that it puts the public at great risk for that. And even if it didn't, the, it puts everybody at risk that buys insurance because, uh, of the, uh, fact that it doesn't leave your bloodstream even though you may or may not be impaired. How do you deal with that? [2:14:57](https://vimeo.com/1176563546#t=8097s) Well, I believe most of those companies out there now are drug testing those drivers before they're going on the roads. Maybe not daily, but I know that, that a lot of my members already do a lot of that drug testing. [2:15:08](https://vimeo.com/1176563546#t=8108s) So, so they do that to protect their interest in, in, in the commercial driver's license. How about all the drivers that are out there driving automobiles doing the same exact thing? Is this not putting the, uh, uh, m- a lot more litigation the, uh, for, for every driver on the road that, hey, you, you know, you legally went out here and, and, and, and, uh, consumed this product that stays in your blood for a month. The, uh, you may not be impaired, but how do you prove that you're not impaired at the time? [2:15:41](https://vimeo.com/1176563546#t=8141s) I don't think there's a roadside test for, for the, the, uh, whether you're impaired or not for THC. Am I, am I- [2:15:50](https://vimeo.com/1176563546#t=8150s) I guess that would be a question for our public safety folks. I'm, I'm not 100% whether there's a test for that or not. [2:15:57](https://vimeo.com/1176563546#t=8157s) And maybe somebody would, would testify, Mr. Chairman, from public safety? [2:16:00](https://vimeo.com/1176563546#t=8160s) Maybe. Senator Albers, you are recognized for a question. [2:16:03](https://vimeo.com/1176563546#t=8163s) Thank you, Mr. Chairman. Uh- [2:16:04](https://vimeo.com/1176563546#t=8164s) Thank you, Senator [2:16:04](https://vimeo.com/1176563546#t=8164s) ... and this may be a combination of questions from Senator Ginn, yourself, and, and the chairman. There is no roadside test for THC. Doesn't exist today. They can actually just check... There's a whole process for, uh, giving you a roadside sobriety. They check your eyes, all the other movements. But Senator Ginn's absolutely right, it's in your bloodstream for 30 days, and this is the problem when we went down this path of legalizing drugs. Because with alcohol, when it's out of your system, it's out of your system. Uh, and this is the danger we keep creating when we keep going down and getting the nose into the camel's tent. [2:16:36](https://vimeo.com/1176563546#t=8196s) But Mr. Chairman, you want- I wanna just get back to something you had mentioned, 'cause on line 227 it says 10 milligrams, milligrams of total THC per serving. Last year I handed out a graphic to this committee that showed that 2.5 is actually equal to one beer or one glass of wine. In this case, 10 means one can- [2:16:57](https://vimeo.com/1176563546#t=8217s) That- [2:16:57](https://vimeo.com/1176563546#t=8217s) ... would be basically equivalent to four. [2:16:59](https://vimeo.com/1176563546#t=8219s) Uh, you're correct on the concentrations, but this is talking about the gummies or the hemp, consumable hemp products on the next page at the top. Line 231 specifically talks about the five milligrams per 12 fluid ounces. But you're accurate, that's twice as much as it takes to get you high. [2:17:16](https://vimeo.com/1176563546#t=8236s) Well, and I think that's why we should consider adjusting this to 2.5, because we have trained people over the last three or four decades to say, "Hey, if you have two, you're okay." [2:17:25](https://vimeo.com/1176563546#t=8245s) Yeah. [2:17:26](https://vimeo.com/1176563546#t=8246s) In this case, two means four, and you're not okay. Uh, and if we've, we've ingrained that into people's minds for so long, uh, I think we wanna make sure we adjust that appropriately. And I do wanna also just make a, a broad comment if I could. California of all states have banned THC drinks. Liberal, off-the-left-coast, down-the-cliff California have banned these. [2:17:51](https://vimeo.com/1176563546#t=8271s) But they- [2:17:51](https://vimeo.com/1176563546#t=8271s) That's how bad they are. [2:17:54](https://vimeo.com/1176563546#t=8274s) Other questions by committee members? [2:17:57](https://vimeo.com/1176563546#t=8277s) Authority really screwed up. [2:17:58](https://vimeo.com/1176563546#t=8278s) Senator Jones, you're- [2:18:00](https://vimeo.com/1176563546#t=8280s) I... Thank you, Mr. Chair. I was just, um... If this bill does effectively ban, as you kinda went through, through it, can you kind of just tell what impact it would have on the industry, um, as they're gonna rely more, I guess, selling these products? [2:18:14](https://vimeo.com/1176563546#t=8294s) I think if you create a ban in Georgia that is not a federal ban, I think that these products will cons- continue to flow into the state in a black market and be unregulated. And I think to, to Senator Albers' point a few seconds ago of saying we've legalized these products, uh, the h- hemp farming bill legalized these products in 2018. In 2024, Georgia chose to regulate them, and I think that's a huge differentiation, especially when you're talking about something that the Department of Ag took on for a couple of years and said, "Let's put parameters around these. [2:18:50](https://vimeo.com/1176563546#t=8330s) Let's know where they are. Let's age gate them. Let's, you know, know what's in them, put QR codes on them. Let's test them." Um, and, and the fact that they have folks in the field that, that are making sure that's happening I think is very important, because I don't believe that these products will go away, even if they are banned. Right now it's a $28 billion industry. [2:19:12](https://vimeo.com/1176563546#t=8352s) All right. What's the pleasure of the committee? [2:19:14](https://vimeo.com/1176563546#t=8354s) Yeah. Pass. What is the pleasure of the committee? [2:19:15](https://vimeo.com/1176563546#t=8355s) Yeah, go right ahead. Senator Summers, you're first. [2:19:17](https://vimeo.com/1176563546#t=8357s) Where, where does it actually... Tell me how you came up with the actual ban of the, the word ban of the product? [2:19:25](https://vimeo.com/1176563546#t=8365s) I think the, I think the language in lines 114 and 115. The... And that's bit more of a question for the Department of Ag, but I believe that will ban a lot of the products, if I'm not mistaken. [2:19:42](https://vimeo.com/1176563546#t=8382s) Okay, just making sure- [2:19:43](https://vimeo.com/1176563546#t=8383s) Are you saying a lot of them are exceeding the current 10 milligrams- [2:19:47](https://vimeo.com/1176563546#t=8387s) No, I believe it- [2:19:48](https://vimeo.com/1176563546#t=8388s) ... aggregate? [2:19:48](https://vimeo.com/1176563546#t=8388s) I, I believe it's the way the, the information is already structured out there. And again, this is a, a question for the department. But I believe the way it's structured now, it only tests for maybe the Delta-9 that's in there, and maybe, uh, again, that that's a question for the department. [2:20:05](https://vimeo.com/1176563546#t=8405s) Under the Agriculture Department? [2:20:07](https://vimeo.com/1176563546#t=8407s) Yes. Uh, Katherine Russ will be best suited to answer that. [2:20:10](https://vimeo.com/1176563546#t=8410s) And, and, and a quick follow-up, Mr. Chairman. [2:20:12](https://vimeo.com/1176563546#t=8412s) Yeah. [2:20:12](https://vimeo.com/1176563546#t=8412s) Um, and regarding what Senator Albers, Chairman Albers was just saying, you know, and, and of course, you know, I take issue with all of it. I just seen ban alcohol, ban everything, but I don't wanna ban anything. I mean, I understand we have to have that. My issue is that, is, uh, he'd probably say no to that, but, banning alcohol, but I would say this right here. If you drop it down to 2.5, like he was discussing, my concern is, if you can give me this feedback if you have it, you'd wind up drinking a lot more than you should to get that buzz or whatever it is you're looking for, and then you'd really be impaired. [2:20:46](https://vimeo.com/1176563546#t=8446s) I, I'm, I'm assuming su- such. Is that something your industry discusses? [2:20:53](https://vimeo.com/1176563546#t=8453s) No, but I would assume that same, uh, theory would apply with alcohol. [2:20:58](https://vimeo.com/1176563546#t=8458s) The weaker it is, the more you drink? [2:21:00](https://vimeo.com/1176563546#t=8460s) Probably. [2:21:04](https://vimeo.com/1176563546#t=8464s) Don't... Same effect. [2:21:06](https://vimeo.com/1176563546#t=8466s) Thank you, Mr. Chairman. [2:21:07](https://vimeo.com/1176563546#t=8467s) All right. What's the pleasure of the committee? [2:21:10](https://vimeo.com/1176563546#t=8470s) We pass. [2:21:11](https://vimeo.com/1176563546#t=8471s) Got a motion to pass from Senator Williams. Is there a second? [2:21:15](https://vimeo.com/1176563546#t=8475s) Second. [2:21:15](https://vimeo.com/1176563546#t=8475s) Second by Senator Albers. Any discussion or proposed amendments? [2:21:21](https://vimeo.com/1176563546#t=8481s) All right. All in favor, raise your hand. [2:21:28](https://vimeo.com/1176563546#t=8488s) I'm not there yet. [2:21:29](https://vimeo.com/1176563546#t=8489s) All right. All opposed? Fails 5-4. I'm gonna vote to tie, and this will stay alive. We'll be discussing it again at our next meeting with the full complement. We are adjourned. I think somebody else has got the room. [2:21:46](https://vimeo.com/1176563546#t=8506s) Leave.