The 2019 Regular Session has been on hiatus since gaveling in on March 5. In the meantime, a bipartisan group of legislators overwhelmingly approved Gov. Kay Ivey’s “Rebuild Alabama” plan, which provides for a gradual 10-cent increase in state gasoline taxes to pay for infrastructure projects throughout the state and at the Port of Mobile. As with any tax increase proposal in a Republican-dominated state, Ivey’s plan was met with harsh criticism among some, including the state Republican Party. But in the State House, the proposal was approved by nearly 80 percent of the Legislature: an 84-20 vote in the 105-seat House and a 28-6 vote in the 35-seat Senate. The legislation was shepherded through a special legislative session by Rep. Bill Poole (R-Tuscaloosa) and Sen. Clyde Chambless (R-Prattville) in five legislative days, which is the shortest amount of time that a bill can go from introduction to enactment.
With the special session concluded, the Legislature will resume its Regular Session next Tuesday. When they return to Montgomery, representatives and senators will be presented with the association’s list of its 2019 Legislative Priorities, which are:
- Supporting legislation that:
- With the Future Advance Mortgage Protection Act, preserves the traditional lien position of financial institutions executive future advance mortgages; and
- With the Financial Institution Excise Tax Reform Act, makes Department of Revenue-approved changes to bank income tax statutes that are technical, sensible, and revenue neutral.
- Opposing legislation that:
- Diverts bank assessment fees away from the State Banking Department;
- Allows credit unions to become qualified public depositories; and
- Weakens the banking industry’s position relative to other corporate taxpayers.
As always, Capitol Notes provides readers with a brief summary of legislation that might impact Alabama’s banking industry. This list is sure to grow during the session as more and more bills are introduced. Right now, the introduced bills at the top of the Association’s radar are House Bill 37 and House Bill 133.
Sponsored by freshman Republican Rep. Scott Stadhagen (R-Hartselle), HB37 would require any state entity that receives “state tax receipts” that are designated for a particular purpose to annually transfer to the State General Fund at least 90 percent of any remaining unexpended receipts, with the amount retained being used exclusively for employee bonuses. Similarly, HB133, sponsored by Judiciary Committee Chairman Rep. Jim Hill (R-Moody), would require all state taxes or fees that are not distributed to the Education Trust Fund or State General Fund, or constitutionally distributed to a specific fund for a specific purpose, to be deposited into the State General Fund and appropriated by the Legislature.
Why do we care about these bills? Because the assessments banks are statutorily required to pay in order to fund the State Banking Department fit squarely into the categories described above and, consequently, could be diverted from the department to other state agencies. That’s an issue that the association has fought against for years, and we will certainly keep our eyes on these two pieces of legislation.
As of the end of the first legislative day, representatives have introduced 216 bills – 135 in the House and 81 in the Senate. The 2019 Regular Session can last for no more than 30 legislative days and must end on or before June 17.
The Legislature will reconvene for its second legislative day on March 19. Both the House and Senate will gavel-in at 3 p.m.
Questions or comments? Contact Jason Isbell, ABA’s VP of Legal and Governmental Affairs, at jisbell@alabamabankers.com.
