{"id":795,"date":"2016-03-08T18:14:13","date_gmt":"2016-03-08T18:14:13","guid":{"rendered":"https:\/\/albanknews.com\/?p=795"},"modified":"2016-03-08T18:14:33","modified_gmt":"2016-03-08T18:14:33","slug":"capitol-notes-week-five","status":"publish","type":"post","link":"https:\/\/albanknews.com\/?p=795","title":{"rendered":"Capitol Notes: Week Five"},"content":{"rendered":"

March 8, 2016 –\u00a0<\/strong>The Legislature met for two days last week, Tuesday and Thursday, and held committee meetings all day Wednesday.<\/p>\n

After the multiple legislative sessions of 2015, constituents across the state implored their legislator to come back in 2016 and pass the Education Trust Fund (ETF) and State General Fund (SGF) budgets as quickly as possible. So far, it seems that legislators are listening.<\/p>\n

Last Wednesday, the House Ways and Means Education Committee favorably reported the FY 2017 ETF budget. Thanks to a projected year-over-year revenue increase of more than $300 million, the committee, chaired by Rep. Bill Poole (R-Tuscaloosa)<\/strong>, included a teacher pay raise in the budget: a 4 percent raise for all post-secondary employees, a 4 percent raise for K-12 employees earning less than $75,000 annually, and a 2 percent raise for all other K-12 employees. The budget also included a 1 percent increase in the operations and maintenance budgets of each of Alabama\u2019s public institutions of higher education, and a $14 million increase in pre-K funding. In all, the committee-reported budget appropriates $6.28 billion in FY 2017, which is 4.84 percent more than is to be appropriated in FY 2016, but which is $34 million less than the governor recommended for FY 2017. The House will take up and likely pass the ETF budget and related bills when it convenes today.<\/p>\n

On the SGF side, the Senate-passed version of the budget is scheduled for a public hearing this Wednesday in the House Ways and Means General Fund Committee, which is chaired by Rep. Steve Clouse (R-Ozark)<\/strong>. The latest version of the budget appropriates $1.8 billion in FY 2017, which begins Oct. 1. Gov. Bentley has publicly indicated that he would veto the current SGF budget, which is three percent larger than last year\u2019s budget but nearly $100 million smaller than the budget originally recommended by the governor.<\/p>\n

From the association\u2019s perspective, no funds are currently scheduled to be diverted from the State Banking Department to the SGF. For the association, this is the most important item in the budget debate, and we will continue to monitor both budgets as they make their way to Gov. Bentley\u2019s desk.<\/p>\n

At the end of the 12th legislative day, the House has passed 37 of the 370 bills that have been introduced while the Senate has passed 76 out of 326 bills that have been introduced. Some of the measures that could impact Alabama banks include the following:<\/p>\n

Senate Bill 67, <\/strong>sponsored by Sen. Cam Ward <\/strong>(R-Alabaster): This bill, the \u201cAlabama Consumer Lawsuit Lending Act,\u201d would regulate the process of consumer lawsuit lending in the state. The bill includes provisions related to consumer lawsuit lending agreements as well as interest rates applicable to such agreements (currently capped at 10 percent APR). This bill is in position to be approved by the full Senate.<\/u><\/p>\n

Senate Bill 90<\/strong>, sponsored by Sen. Arthur Orr <\/strong>(R-Decatur), and House Bill 217<\/strong>, sponsored by Rep. Alan Baker <\/strong>(R-Brewton): This bill would provide an income tax credit of $1,000 to an employer for each qualified apprentice of an employer, based on Department of Labor standards of \u201cqualified apprentice.\u201d Banks can qualify for this tax credit. The House Ways and Means Committee favorably reported this bill last week. The bill is now in position to be approved by the full House.<\/u><\/p>\n

Senate Bill 91<\/strong>, sponsored by Sen. Arthur Orr <\/strong>(R-Decatur): This bill makes significant changes to laws related to payday loans, including a provision that caps the annual finance rate at 45 percent. The bill was favorably reported by the Senate Banking and Insurance Committee last week, but could still face significant opposition on the Senate floor.<\/u><\/p>\n

Senate Bill 144,<\/strong> sponsored by Sen. Cam Ward<\/strong> (R-Alabaster) and House Bill 113, <\/strong>sponsored by Rep. Matt Fridy<\/strong> (R-Montevallo): This bill makes a declaratory finding that the term \u201ctransfer\u201d in the Alabama Fraudulent Transfer Act includes transfers made pursuant to a divorce settlement or domestic settlement. While the bill merely seeks to clarify, rather than amend existing law, this bill is written as a response to a recent ruling of the Alabama Court of Civil Appeals that could potentially have a negative impact on banks. The Senate unanimously passed the bill last week, and a House committee is expected to take up the bill soon.<\/u><\/p>\n

Senate Bill 164<\/strong>, sponsored by Sen. Rodger Smitherman <\/strong>(D-Birmingham) and House Bill 269<\/strong>, sponsored by Rep. Juandalynn Givan <\/strong>(D-Birmingham): This bill would adopt the Revised Uniform Fiduciary Access to Digital Assets Act, which would extend the traditional power of a fiduciary to manage tangible property to include the management of digital assets. These bills are on this week\u2019s House and Senate Judiciary Committee agendas.<\/u><\/p>\n

Senate Bill 202<\/strong>, sponsored by Sen. Linda Coleman <\/strong>(D-Birmingham): This bill would amend the corporate income tax law to require the operations of all related entities involved in a unitary business to file one corporate income tax return on a combined based, known as combined reporting. ABA, as well as other business advocacy groups, will undoubtedly oppose this measure if it ever makes it onto a committee agenda.<\/u><\/p>\n

Senate Bill 209<\/strong>, sponsored by Sen. Bill Holtzclaw <\/strong>(R-Huntsville) and House Bill 367<\/strong>, sponsored by Rep. Ken Johnson <\/strong>(R-Moulton): This bill would make substantial, but mostly technical, revisions to Alabama\u2019s Credit Union statute. The Alabama Credit Union Administration drafted the 51-page bill, which includes specific provisions about the appellate rights of persons affected by a suspension of operation of a credit union. These changes, and others, were likely prompted in the wake of the ACUA\u2019s actions towards the Tuscaloosa-based Alabama One Credit Union. Working with the Credit Union industry, ABA was able to persuade the Senate Banking and Insurance Committee to adopt an amendment that alleviated our concerns about this mostly technical bill. The Senate passed this bill last week and a House committee is scheduled to take it up this Wednesday.<\/u><\/p>\n

Senate Bill 238, <\/strong>sponsored by Sen. Arthur Orr <\/strong>(R-Decatur), and House Bill 291<\/strong>, sponsored by Rep. Connie Rowe <\/strong>(R-Jasper): The \u201cAlabama Information Protection Act\u201d would provide for the protection of sensitive personally identifying information and notice to individuals whose personal information has been breached. Working with Attorney General Strange, ABA was able to have language included in the bill that exempts financial institutions subject to the privacy provisions of the Gramm-Leach-Bliley Act. The bill is in position to be voted on by the full Senate.<\/u><\/p>\n

Senate Bill 262<\/strong>, sponsored by Sen. Shay Shelnutt <\/strong>(R-Trussville), and House Bill 299<\/strong>, sponsored by Rep. David Faulkner <\/strong>(R-Mountain Brook): This bill would standardize several insurance-related laws as they apply to \u201ctransportation network companies\u201d such as Uber. The association worked to have an amendment added in a Senate committee that improved a bank\u2019s positions if it is a lienholder on a vehicle used by an Uber driver. The House version of the bill will be in committee this week, and the Senate committee amendment will be added to the House.<\/u><\/p>\n

Senate Bill 288<\/strong>, sponsored by Sen. Bobby Singleton <\/strong>(D-Greensboro): This bill would cut in half, from six years to three years, the statute of limitations for actions to recover money due by open or unliquidated account, \u201cincluding a credit card or other revolving credit account.\u201d Proponents claim this bill merely brings clarity to a situation that has been confused by several court rulings. Senate Bill 288 is on this Wednesday\u2019s Senate Judiciary Committee agenda, and the association is working to determine its position on the bill, but is likely opposed.<\/u><\/p>\n

House Bill 36,<\/strong> sponsored by Rep. Kyle South<\/strong> (R-Fayette): The \u201cAlabama Small Business Jobs Act,\u201d would, as introduced<\/u>, give businesses, including banks, an income\/FIET tax credit under certain conditions. Specifically, a bank headquartered in Alabama with 75 or fewer employees would receive a one-time tax credit valued at $1,500 for each employee hiring that results in a \u201cnet employee growth\u201d from one tax year to the next. Working with Sen. Jim McClendon<\/strong> (R-Springville), the ABA was able to persuade the Senate Fiscal Responsibility and Economic Development Committee to adopt an amendment that re-inserted banks and FIET taxpayers into the bill. The amended bill is now in position to be voted on by the full Senate.<\/u><\/p>\n

House Bill 62,<\/strong> sponsored by Rep. Victor Gaston <\/strong>(R-Mobile): This bill would authorize a seven-year extension of the tax credit against the tax liability of certain taxpayers, including banks with an FIET liability, for the substantial rehabilitation of qualified structures. Currently, up to $20,000,000 in tax credits are available each year for rehabilitation projects involving certified historic structures (credit equals 25 percent of the qualified rehabilitation expenditures, up to $5,000,000 per project) or qualified pre-1936 non-historic structures (credit equals 10 percent of qualified rehabilitation expenditures, up to $5,000,000 per project). The tax credit program, which expires in April, would under this legislation be renewed until 2022. The bill is now in a position to be voted on by the full House.<\/u><\/p>\n

House Bill 341<\/strong>, sponsored by Rep. Patricia Todd <\/strong>(D-Birmingham): This bill would double the fee for the recording of mortgages, deeds of trust, contracts of conditional sales, or other similar instruments recorded to secure the payment of debt. The current recording fee is effectively $150 for every $100,000 worth of debt, with two-thirds of the fee revenue distributed to the State General Fund (SGF) and one-third distributed to the county in which the tax is collected. Under this bill, the recording fee would be $300 for every $100,000 worth of debt, with 3 percent distributed to the county Judge of Probate, 35 percent to the SGF, 23 percent to the Alabama Housing Trust Fund, 23 percent to the Alabama Homebuyer\u2019s Initiative, and 16 percent to the county in which the tax is collected.<\/p>\n

House Bill 370<\/strong>, sponsored by Rep. A.J. McCampbell <\/strong>(D-Demopolis): This bill would improve the lien position of the Federal Home Loan Banking system in the event an member insurance company goes into receivership. By improving the lien position, FHLB members could potentially see higher rates of return.<\/p>\n

Counting bills and joint resolutions, 43 measures have been enacted into law since the beginning of the session. The Legislature has met for 12 legislative days as of this writing. A Regular Legislative Session can contain no more than 30 legislative days, and all legislative days must take place on or before May 16, which is 105 days after the beginning of the session. \u00a0The House of Representatives and Senate will convene today for the 13th legislative day. The House and Senate are expected to meet for two legislative days this week.<\/p>\n

\n

Questions or comments?<\/strong> Email Jason Isbell<\/a>, vice president of governmental and legal affairs.<\/em><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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