Capitol Notes: Week One

JANUARY 12, 2018 — Week one of the Alabama Legislature’s 2018 Regular Session began with Gov. Kay Ivey’s first State of the State address. Focused primarily on her successes since taking over as head of state last April, Gov. Ivey touted Alabama’s surging economy and low unemployment rate in her speech inside the Capitol’s historic House Chamber. She also announced her legislative priorities for 2018, which include additional funding for the state’s successful pre-K program and an expansion of broadband Internet services to Alabama’s rural areas. Based on public statements from legislative leaders, it is expected that Ivey’s list of priorities will be well-received in the House and Senate.

And on what would have otherwise been a ho-hum Wednesday in the State House – legislators cannot vote on bills until next Tuesday – economic development and political officials gathered to announce that automobile giants Mazda and Toyota would locate a joint venture at a manufacturing mega-site in Limestone County. The two Japanese companies are predicted to invest approximately $1.6 billion for a facility designed to produce more than 300,000 vehicles annually and employ up to 4,000 people.

On Thursday, the Senate Republican Caucus, led by Senate President Pro Tempore Del Marsh (R-Anniston) and Majority Leader Greg Reed (R-Jasper), released its 2018 legislative agenda. Bolstered by the recently enacted tax cuts at the federal level, the caucus announced its top priority would be passage of legislation that would allow more middle-class families to claim the maximum standard deduction on their Alabama income tax returns. For example, under current law, the maximum standard deduction for married taxpayers filing jointly with an adjusted gross income of $20,000 or less is $7,500. Under the caucus plan, that same deduction will be available to married taxpayers filing jointly with an adjusted gross income of $23,000. Some early estimates predict the legislation will save taxpayers roughly $6 million annually. Other items on the caucus agenda included

As always, I will provide readers with a brief summary of legislation that might impact Alabama’s banking industry. Those summaries are as follows:

House Bill 90 by Rep. Kerry Rich (R-Albertville) and Senate Bill 30 by Sen. Clay Scofield (R-Arab) make technical changes to an association-supported law passed in 2015 related to the right of redemption for homesteaded properties. Current law caps the redemption period for these properties at 180 days, while the redemption period for all other types of properties is one year. In exchange for the shorter redemption period, legislators in 2015 required that a property owner be notified via certified mail of his redemption rights. These bills merely stipulate that even if this notice is defective, the redemption period is the same as it is for all other types of properties (i.e., one year). It also states that being able to prove the notice was mailed is a defense to a claim that the notice was never received. House Bill 90 was favorably reported by the House Insurance Committee, which Rep. Rich chairs, on Tuesday. It now awaits action by the full House.

House Bill 100 by Rep. Will Ainsworth (R-Guntersville) and Senate Bill 60 by Sen. Clay Scofield (R-Arab) are association-drafted bills aimed at correcting an issue in state law that was discovered last year. With the exception of county commissions, all public depositors are allowed to elect their qualified public depository at any time, meaning a local school board could theoretically deposit its public funds in Bank A on a Monday, only to draw them out and deposit them in Bank B the next day. With county commissions, however, the qualified public depository must be elected the first week of every December and used for the entirety of the subsequent year. These bills simply allow county commissions, like all other public depositors, to elect their depository at any time.

House Bill 117 by Rep. Paul Beckman (R-Prattville) would specify that a civil action to recover debt on an open-end credit plan, including credit card or similar revolving debt, would be required to be commenced within six years. Proponents of this legislation believe that this bill merely cements current law, though opponents say that, under certain circumstances, the appropriate Statute of Limitations is three years.

House Bill 183 by Rep. Paul Beckman (R-Prattville) is the Uniform Trust Decanting Act (UTDA). Drafted by the Alabama Law Institute, the UTDA allows a trustee to reform an irrevocable trust document within reasonable limits that ensure the trust will achieve the settlor’s original intent. The act prevents decanting when it would defeat a charitable or tax-related purpose of the settlor. Approved in 2015 by the Uniform Law Commission, Alabama would be the sixth state to adopt the UTDA.

House Bill 181 by Rep. Matt Fridy (R-Montevallo) and Senate Bill 152 by Sen. Rodger Smitherman (D-Birmingham) is the Uniform Voidable Transfers Act (UVTA), another Alabama Law Institute/Uniform Law Commission bill. In short, the UVTA, which would replace Alabama’s version of the Uniform Fraudulent Transfers Act, strengthens creditor protections by providing remedies for certain transactions by a debtor that are unfair to the debtor’s creditors.

Senate Bill 92 by Sen. Arthur Orr (R-Decatur) revises Alabama law related to unemployment compensation by basing the maximum amount of unemployment benefits on a variable rate. The rate would vary based on the state’s unemployment rate, meaning a recipient would receive benefits for a longer duration during tough economic times and a shorter duration during positive economic times. According to the National Federation of Independent Businesses, Alabama would be the sixth state to pass this bill (or something similar) and the state’s unemployment compensation trust fund would likely realize a savings of more than $50 million annually.

As of the end of the second legislative day, representatives and senators have introduced 373 bills – 202 in the House and 171 in the Senate – and 70 resolutions. The 2018 Regular Session can last for no more than 30 legislative days and must end on or before April 23.

The Legislature will reconvene for the third legislative day next Jan. 16.

Questions or comments about this issue of Capitol Notes? Contact Jason Isbell, ABA’s Vice President of Legal and Governmental Affairs, at