MONTGOMERY, Ala., Feb. 5, 2021 — The Alabama Legislature began its 2021 Regular Session at noon on Tuesday. Opening day normally starts with camaraderie between colleagues and ends with the pomp of the State of the State Address. Yet thanks to COVID-19, the State House was a socially distanced ghost town populated only by legislators and staffers, and Gov. Kay Ivey delivered her fourth State of the State standing alone underneath the Capitol’s dome.
In an effort to minimize disruptions from the coronavirus pandemic, legislative leaders announced a “two weeks on, one week off” schedule for this session. More than likely, that will result in no more than 25 legislative days, which is five fewer than the maximum amount allowed. But three bills, in particular, took centerstage during the session’s first week.
- SB30 by Arthur Orr (R-Decatur) provides businesses, healthcare providers, churches, and other entities with civil immunity from COVID-related lawsuits, so long as the covered entities followed proper federal and state health protocols. This agreed-upon legislation was introduced late in the COVID-shortened 2020 session, and much of the language in the bill was included in an Executive Order issued last May. The legislation was at the top of everyone’s “must pass” list and was the first bill to pass the Senate this session.
- HB170 by Danny Garrett (R-Trussville) makes clear that tax credits and stimulus payments provided by the federal CARES Act are excluded from state income taxation. The legislation also includes several other important tax provisions related to business income apportionment, business expense deductibility, and pass-through taxation. It passed the House unanimously on the third legislative day.
- HB192 by Bill Poole (R-Tuscaloosa) renews and expands three important economic development incentive programs used by the state to lure companies to Alabama.
- Credits available under the Alabama Jobs Act, which expired in 2020, would be extended to 2023, with the amount of credits increasing from $300 million to $325 million in 2021 and $350 million in 2022.
- Credits available under the Growing Alabama Act, which also expired in 2020, would be extended to 2023, with the amount of credits increasing from $10 million to $20 million annually.
- Credits available under the Alabama Port Credit program would be expanded to include more creditable opportunities for automotive companies.
Each bill was introduced on the first legislative day, was reported out of committee on the second, and passed its chamber of origin on the third. Legislators plan to take up the bills next week, with the hope of having them to Gov. Ivey by the end of the week. The governor has signaled that she would sign these bills into law “without delay.”
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. The Senate bill will be considered by the Senate Banking and Insurance Committee next Wednesday.
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.
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, however, this bill could provide debtors with an additional option of shielding assets from creditors. The association is working with the sponsor and the Alabama Law Institute to modify the legislation in a way that satisfies our concerns.
Through three legislative days, Representatives and Senators have introduced 550 bills – 351 in the House and 199 in the Senate – and 52 resolutions. The regular session can include no more than 30 legislative days and must end on or before May 17.
The House and Senate return to Montgomery for the fourth legislative day next Tuesday. Legislators expect to meet for three legislative days next week, followed by a one-week hiatus to reassess COVID protocols and sanitize the State House.
Capitol Notes is written by Jason Isbell, an attorney in the Governmental Solutions practice group at Maynard Cooper & Gale, the state’s largest law firm. Capitol Notes will be published each week during the regular legislative session and at other times as necessary. Based in Montgomery, Jason is the association’s governmental affairs consultant and can be reached at jisbell@maynardcooper.com or at (334) 782-1219.
