MONTGOMERY, Ala., Feb. 1, 2021 — The Alabama Legislature begins its 2021 Regular Session on Feb. 2. Thanks to the Alabama Constitution, everyone has known when this session would begin. But because of the coronavirus pandemic, no one really knows what will happen next.
State House Access
In a normal year, legislators, legislative staffers, and numerous other citizens interested in the legislative process would fill the eight floors of the Alabama State House every Tuesday, Wednesday, and Thursday during the 15 weeks of a regular session. This year, however, public access to the building will be severely limited and access will be by appointment only. Representatives, senators, and others granted full access to the building will be frequently tested for COVID-19, and social distancing protocols will be strictly observed for those inside the State House. For example, given the space limitations in the 105-member House of Representatives, dozens of legislators may never access the House floor during the session, instead voting and addressing the chamber from specially created overflow rooms or their offices. Additionally, to reduce State House traffic, the House will likely filter every bill through one of six legislative committees; there are currently 33 standing committees in the House of Representatives.
As is the case with many other public and private institutions, no one is certain when things will “get back to normal.” Many members of the House and Senate have contracted and thankfully survived COVID-19 already, and just last week, the Alabama Department of Public Health announced that legislators, regardless of their ages, would be included in the next round of vaccinations. Yet most suspect that full access to the State House will not be granted until a vaccine becomes more widely available and coronavirus numbers decline or disappear.
Legislative leaders have indicated that legislators will meet for three legislative days each week, instead of the typical two, during the first two weeks of the session. Following those six legislative days, legislators will take a one-week break, during which the State House will be sanitized, and legislative leadership will assess whether their social distancing protocols need to be modified.
Opening Agenda
During the first two weeks of session, expect three key proposals to be the center of attention.
- COVID Immunity. Senator Arthur Orr of Decatur will again sponsor legislation providing businesses, churches, educational institutions, and other entities with legal immunity from COVID-19 lawsuits, so long as those entities made a good faith effort to comply with public health directives. This legislation was proposed during the COVID-shortened 2020 session and is on the top of nearly everyone’s “must pass” list.
- Renewal, Expansion of Tax Credits. Representative Bill Poole of Tuscaloosa is spearheading an effort to renew and expand three major economic development-related tax credits that the state uses to lure companies to Alabama. Two of these credits, the Growing Alabama Credit and the Alabama Jobs Act Credit, expired at the end of 2020 and are being renewed for three more years. The third credit, the Alabama Port Credit, is being expanded to entice the automotive industry to further utilize the Port of Mobile.
- Taxation of CARES Act Funds. Representative Danny Garrett of Trussville will introduce legislation making clear that Alabamians will not have to report federal economic incentive payments, e., stimulus checks, on their state income tax returns.
Many legislators on both sides of the aisle seem supportive of these important proposals. Passing all three during the first six days of the session is technically doable – it takes only five legislative days for a bill to pass – but any blip on the radar, particularly a COVID diagnosis by someone with State House access, could potentially derail the process.
Act Two
After the two weeks of work and one-week hiatus, several controversial proposals are likely to take centerstage. Talk about gambling legislation, for example, is heating up in Montgomery. While the bill has not taken its final form, expect the proposal to include a statewide lottery, the legalization of Class III casino games, and a cap on the number of locations where gaming can take place. In addition, Sen. Tim Melson of Florence has already indicated that he plans to re-file legislation legalizing the use of cannabis for medical purposes. Melson, who is a medical doctor, was able to push this legislation through the Senate in 2020 before COVID forced an adjournment, so it remains to be seen whether there are enough votes in the House for this bill to travel to Gov. Ivey’s desk. In addition, look for legislation that makes it easier for cities and counties to remove Confederate monuments, as well as legislation that makes it more difficult for public officials to close businesses or enforce mask-wearing during future health pandemics.
Act Two of the session will also likely see a bipartisan push to finalize the state’s operating budgets for the next fiscal year, which begins Oct. 1. Thankfully, by all accounts, both the Education Trust Fund and the State General Fund are in great shape, as receipts grew during the pandemic months of 2020. Since failure to pass the budgets is the only thing that can force the Legislature into a special session over the summer, many are hoping that the budgets are prioritized early in the session, especially since the coronavirus pandemic has the ability to shut things down quickly.
Banking Issues
On the banking front, here are some pieces of legislation to expect:
- Elder Abuse Prevention Legislation. Legislation will be reintroduced that gives financial institutions the absolute discretion to refuse or delay a transaction whenever there is a reasonable suspicion that an elderly or vulnerable adult customer is the victim of elder financial abuse. The Alabama Bankers Association (“ABA”) is spearheading the introduction of this legislation, which was first introduced last year.
- Trust-Related Bills. Two bills related to trusts will be introduced this year.
- The first bill would authorize self-settled trusts to be created in Alabama pursuant to legislation known as the Qualified Disposition in Trusts Act, a product of the Alabama Law Institute (“ALI”). ABA is working to make some important modifications to protect creditors but is otherwise supportive of the proposal.
- The second would provide a simple, nonjudicial way for a trustee to end his or her service as a trustee. Briefly stated, this idea provides that upon trust termination, or trustee resignation or removal, the trustee may send the interested parties information about the trust with proper notice. If none of the parties make an objection within the time period set forth in the statute, the trustee is released as if the court had approved an accounting or if all of the parties signed a release agreement. This method has been adopted in several states around the country and has been vetted by ABA, ALI, and at least two regional financial institutions.
- Remote Ink Notarization. The process of remote ink notarization allows a notary public to notarize a signature that was viewed electronically, such as through Zoom. Technically, thanks to an executive order issued by Gov. Ivey, documents could be notarized using this method for several months. This legislation, drafted by the Alabama Association of Realtors and vetted by ABA and the Alabama Land Title Association, would codify the notarization-related provisions of Ivey’s order.
- LIBOR. At the end of the year, the London Interbank Offered Rate (“LIBOR”) will cease to be used as a major interest rate benchmark. As such, banks are looking for state-level solutions to minimize market disruptions and contract renegotiations that could follow the end of LIBOR. At least one major financial institution has asked ABA to support legislation similar to what was introduced in New York recently, which provides banks with a safe harbor from litigation if a commercially reasonable benchmark rate is used as a LIBOR substitute.
Post-session?
Remember, many important bills and resolutions introduced last year remain unpassed because the 2020 session was adjourned so quickly. As a result, there is a “backlog” of important items that need to be considered. Even under the best of circumstances, the 2021 Regular Session will likely include only 25 legislative days, five fewer than the maximum. Plus, legislators will be required to deal with redistricting – the process of drawing the boundary lines for congressional, legislative, and board of education districts – this year, and final population figures are not expected from the Census until late April, at the earliest. Taken together, unless the coronavirus forces a complete shutdown of the State House, Alabama’s representatives and senators will most likely be called into one or more special legislative sessions before the calendar turns to 2022.
Questions about what’s happening in Montgomery? Contact Jason Isbell with the State Governmental Solutions team at Maynard Cooper & Gale at jisbell@maynardcooper.com or at (334) 782-1219.
