MONTGOMERY, Ala., April 2, 2021 — The Alabama Legislature returned this week from its planned spring break period ready to begin the second half of the 2021 Regular Session. Representatives and senators met in chambers for two legislative days and have now completed 18 out of a possible 30 legislative days in the session.
Several bills important to the association are in a good position to pass before the session ends. Action was taken on one of those bills this week, and action is expected next week on two more.
The House State Government committee favorably reported Senate Bill 275 on Wednesday. Sponsored by Sen. Sam Givhan (R-Huntsville), this bill codifies a process known as remote ink notarization. Originally introduced to Alabama through an Executive Order issued last year by Gov. Kay Ivey, the process allows a notary public to notarize a signature that was witnessed via videoconferencing platforms rather than in person. The bill is now in a position to be voted on by the full House. Rep. Andy Whitt (R-Huntsville) will manage the bill on the House floor.
Speaking of the House of Representatives, a bill sponsored by Rep. Merika Coleman (D-Birmingham) is scheduled to be voted on by the full House next Tuesday. That bill, House Bill 474, gives trustees an additional option to use when seeking to be released from their service to a trust. If the bill passes the House, it will travel to the Senate and be referred to the Banking and Insurance Committee, whose chairman, Sen. Shay Shelnutt (R-Trussville), will manage the bill in the Senate.
Finally, the association is supportive of legislation that would govern how contracts tied to LIBOR would proceed after LIBOR ceases to be published at the end of the year. Both a House bill, sponsored by Rep. Danny Garrett (R-Trussville) and a Senate bill, sponsored by Sen. Dan Roberts (R-Mountain Brook), have moved in recent weeks. It is expected that the Senate bill will be considered next week by the House Financial Services Committee.
Bills of importance to the banking industry include the following:
HB147 by House Financial Services Committee Chairman Chris Blackshear (R-Phenix City) and SB181 by Senate Banking and Insurance Committee Chairman Shay Shelnutt (R-Trussville) is the Elderly and Vulnerable Adult Financial Protection Act of 2021. These bills give financial institutions full discretion to refuse or delay a financial transaction whenever financial abuse of an elderly or vulnerable adult customer is reasonably expected. Introduced last year, these bills garnered unanimous support in both chambers, but were unable to pass into law after the session abruptly ended because of COVID-19. Senate Bill 181 was signed into law on March 9. It is now Act 2021-78.
HB196 by Rep. Matt Simpson (R-Daphne) and SB35 by Sen. Greg Albritton (R-Atmore) makes technical changes to the Alabama Uniform Trust Decanting Act, a law passed in 2019 that provides a method for reforming or modernizing an irrevocable trust. Both bills have been passed by the House Financial Services Committee, putting the Senate bill one vote away from the Governor’s desk. The Legislature has passed the Senate bill and it now awaits Gov. Ivey’s signature.
HB216 by Rep. Craig Lipscomb (R-Gadsden) is the Alabama Consumer Privacy Act, a law giving consumers various rights related to the collection of personal information by businesses. Modeled after a California law, the legislation imposes onerous burdens on businesses of all types, including financial institutions. The association had a meeting with the sponsor earlier this week outlining concerns about the bill, and the sponsor assured us that he did not plan to pursue the legislation.
HB293 by Rep. David Faulkner (R-Mountain Brook) is the Qualified Dispositions in Trust Act, which would authorize the creation of self-settled trusts in Alabama. Drafted by the Alabama Law Institute, this bill could theoretically expand opportunities for financial institutions providing trust-related services. On the other hand, this bill could provide debtors with an additional option of shielding assets from creditors. The bill has passed the House and is in position to be considered by the Senate Banking and Insurance Committee.
HB457 by Rep. Chris Pringle (R-Mobile) expands the Alabama Residential Mortgage Satisfaction Act to include mortgages securing commercial agricultural properties. This is the second year Pringle has introduced this legislation. The bill defines “commercial agricultural properties” as property located in this state that is used primarily for the growing of plants, trees, or animals primarily for a for-profit business and not for recreational purposes. The bill has passed the House and is in position to be considered by the Senate Fiscal Responsibility and Economic Development Committee.
HB470 by Rep. Andy Whitt (R-Harvest) and SB275 by Sen. Sam Givhan (R-Huntsville) would allow documents to be remotely notarized under certain conditions. Drafted by a coalition of trade groups including the association, the Alabama Association of Realtors, and the Alabama Land Title Association, this bill codifies the “Remote Ink Notarization” provisions of Gov. Ivey’s Emergency Executive Orders. In short, it sets up guidelines that would allow a notary public to witness the signature of a document using videoconferencing platforms. The Senate bill was approved by a House committee and is now in a position to be considered by the full House.
HB474 by Rep. Merika Coleman (D-Birmingham) and SB282 by Sen. Shay Shelnutt (R-Trussville) would amend the Uniform Trust Code to create a third option for a Trustee to use when seeking to be released from his or her service to a Trust. Under this option, release would be granted if no beneficiary or interested party objected to the release in writing within 45 days of receiving a notice of the release and an accounting of the Trust from the previous two years. The Senate bill has been approved by the full Senate and is in position to be voted on by a House committee. The House bill has been approved by a House committee and is now in a position to be voted on by the full House, which is scheduled to occur next week.
HB475 by Rep. Danny Garrett (R-Trussville) and SB279 by Sen. Dan Roberts (R-Mountain Brook) provides for how certain financial contracts would be governed after the publication of LIBOR is discontinued later this year. The Senate bill has been approved by the full Senate and is in position to be voted on by a House committee, which is scheduled to occur next week. The House bill has been approved by a House committee and is now in a position to be voted on by the full House.
SB316 by Sen. Garlan Gudger (R-Cullman) would prohibit payment processing from charging an interchange fee on any portion of a payment transfer that was attributed to state or local taxes or fees. Legislation of this type has been introduced in multiple states around the country. The consequences of this bill becoming law could have negative implications on the banking and retail industries
SB352 by Sen. Arthur Orr (R-Decatur) revises the 2021 payment date for financial institutions excise taxes and income taxes to coincide with the revised due dates for the corresponding federal payments. This bill was favorably reported by the Senate Finance and Taxation General Fund Committee and is now in position to be voted on by the full Senate.
SB379 by Sen. Dan Roberts (R-Mountain Brook) among other things, provides for a one-month extension of the due date of tax returns for financial institutions in tax years beginning on or after Jan. 1, to provide taxpayers with additional time to calculate their tax liabilities under new federal and state tax law, without incurring a late filing penalty. The filing extension would not extend the due date of the tax liability by these taxpayers. This bill would also authorize the Department of Revenue, in its discretion, to extend the due date of tax returns for Alabama financial institutions by one month in tax years beginning on or after Jan. 1, 2020, but before Jan. 1, 2021.
Through 18 legislative days, representatives and senators have introduced 974 bills – 591 in the House and 383 in the Senate – and 257 resolutions. As of this writing, 138 of those measures have been signed into law.
Legislators can meet for no more than 30 legislative days during a regular, and the session must adjourn on or before midnight on May 17. Representatives and Senators return to Montgomery on April 6 for the 20th legislative day. The Legislature will meet for three days next week.
Look for this update to be published each week during the regular legislative session and at other times as necessary. This update is written by Jason Isbell, an attorney in the Governmental Solutions practice group at Maynard Cooper & Gale. Along with his colleagues at the firm, Jason is a governmental affairs consultant for the association. Jason can be reached at jisbell@maynardcooper.com or at (334) 782-1219.
