JANUARY 19, 2018 — So, who was the most influential player during the second week of the 2018 Regular Session, you ask? The governor? The speaker of the house? How about a leading Democrat in the House of Representatives or a leading Republican in the Senate? Nope. Not even close. Without question, the most influential player during the second week of the 2018 Regular Session was none other than Mother Nature herself.
Snow and cold winds blanketed much of the capital city starting Tuesday afternoon, causing the House and Senate, along with all other state agencies in Montgomery, to shut down on Wednesday. The House, in fact, canceled every single committee meeting on the calendar. The Senate canceled its Wednesday committees, too, but rescheduled them for the next day. And while that decision helped the committees do more work, it caused the Senate to spend Thursday doing its work in committees rather than, per usual, on the Senate floor.
Still, both bodies were able to pass their first bills out of their respective chambers. One of those bills, in fact, couldn’t have come at a better time.
As you likely know, Toyota and Mazda recently announced that they were jointly investing $1.6 billion to build a production facility on a manufacturing mega-site in north Alabama. Part of the incentives economic development officials used to lure these giants to the Yellowhammer State was an abatement of state-level taxes. But what really sweetened the deal was similar tax breaks at the county and municipality levels. To help make those promised tax breaks a reality, Senator Arthur Orr (R-Decatur) introduced Senate Bill 98, which allows a county to abate all or a portion of county ad valorem taxes for certain properties that create a certain amount of new jobs and involve an anticipated capital expenditure of at least $100 million. The bill passed the Senate unanimously on Tuesday, making it the first general bill sent from the upper chamber to the House of Representatives.
As always, Capitol Notes will provide readers with a brief summary of legislation that might impact Alabama’s banking industry. Those summaries are as follows:
House Bill 90 by Rep. Kerry Rich (R-Albertville) and Senate Bill 30 by Sen. Clay Scofield (R-Arab) make technical changes to an association-supported law passed in 2015 related to the right of redemption for homesteaded properties. Current law caps the redemption period for these properties at 180 days, while the redemption period for all other types of properties is one year. In exchange for the shorter redemption period, legislators in 2015 required that a property owner be notified via certified mail of his redemption rights. These bills merely stipulate that even if this notice is defective, the redemption period is the same as it is for all other types of properties (i.e., one year). It also states that being able to prove the notice was mailed is a defense to a claim that the notice was never received. House Bill 90 unanimously passed the House of Representatives on Thursday, and now awaits action by the Senate Banking and Insurance Committee.
House Bill 100 by Rep. Will Ainsworth (R-Guntersville) and Senate Bill 60 by Sen. Clay Scofield (R-Arab) are association-drafted bills aimed at correcting an issue in state law that was discovered last year. With the exception of county commissions, all public depositors are allowed to elect their qualified public depository at any time, meaning a local school board could theoretically deposit its public funds in Bank A on a Monday, only to draw them out and deposit them in Bank B the next day. With county commissions, however, the qualified public depository must be elected the first week of every December and used for the entirety of the subsequent year. These bills simply allow county commissions, like all other public depositors, to elect their depository at any time. Senate Bill 60 unanimously passed the Senate County and Municipal Government Committee on Thursday, and now awaits action by the full Senate.
House Bill 117 by Rep. Paul Beckman (R-Prattville) would specify that a civil action to recover debt on an open-end credit plan, including credit card or similar revolving debt, would be required to be commenced within six years. Proponents of this legislation believe that this bill merely cements current law, though opponents say that, under certain circumstances, the appropriate Statute of Limitations is three years. The House Financial Services Committee plans to debate this bill in their meeting next Wednesday.
House Bill 183 by Rep. Paul Beckman (R-Prattville) is the Uniform Trust Decanting Act (UTDA). Drafted by the Alabama Law Institute, the UTDA allows a trustee to reform an irrevocable trust document within reasonable limits that ensure the trust will achieve the settlor’s original intent. The act prevents decanting when it would defeat a charitable or tax-related purpose of the settlor. Approved in 2015 by the Uniform Law Commission, Alabama would be the sixth state to adopt the UTDA.
House Bill 181 by Rep. Matt Fridy (R-Montevallo) and Senate Bill 152 by Sen. Rodger Smitherman (D-Birmingham) is the Uniform Voidable Transfers Act (UVTA), another Alabama Law Institute/Uniform Law Commission bill. In short, the UVTA, which would replace Alabama’s version of the Uniform Fraudulent Transfers Act, strengthens creditor protections by providing remedies for certain transactions by a debtor that are unfair to the debtor’s creditors.
House Bill 248 by Rep. Kyle South (Fayette) is the Alabama First-time Home Buyer Savings Account Act, which allows first-time home buyers to establish a first-time home buyer savings account to save funds for a down payment and closing costs for the purchase of a home. The holder of one of these special accounts would be provided with an annual state income tax deduction of up to $6,000 (or $12,000 for joint accounts) for up to five years.
Senate Bill 92 by Sen. Arthur Orr (R-Decatur) revises Alabama law related to unemployment compensation by basing the maximum amount of unemployment benefits on a variable rate. The rate would vary based on the state’s unemployment rate, meaning a recipient would receive benefits for a longer duration during tough economic times and a shorter duration during positive economic times. According to the National Federation of Independent Businesses, Alabama would be the sixth state to pass this bill (or something similar) and the state’s unemployment compensation trust fund would likely realize a savings of over $50 million annually. The Senate Fiscal Responsibility and Economic Development Committee approved this bill on Thursday. It now awaits action by the full Senate.
As of the end of the fourth legislative day, representatives and senators have introduced 461 bills – 264 in the House and 197 in the Senate – and 104 resolutions. The 2018 Regular Session can last for no more than 30 legislative days and must end on or before April 23.
The Legislature will reconvene for the fifth legislative day next Tuesday.
Questions or comments about this issue of Capitol Notes? Contact Jason Isbell, ABA’s Vice President of Legal and Governmental Affairs, at jisbell@alabamabankers.com.
