As predicted in last week’s edition, the association’s top 2020 legislative priority, the Financial Exploitation Prevention Act, unanimously passed the House of Representatives on Tuesday morning. The final vote was 99-0. Bill sponsor Rep. Chris Blackshear (R-Phenix City) did a masterful job of explaining the legislation, which was the second general bill on the House floor that day. Other than a brief statement of support from one representative, no legislator even so much as turned on his or her light to speak, meaning the legislation’s time on the House floor was very short (which is always a good sign!).
Afterwards, the bill was transmitted to the Senate, where it received its first reading on Thursday. The next step for the legislation, House Bill 207, will be to (hopefully) receive a favorable report from the Senate Banking and Insurance Committee, whose chairman, Sen. Shay Shelnutt (R-Trussville), is the sponsor of the Senate version of the Financial Exploitation Prevention Act, Senate Bill 166 (which was unanimously approved by the committee a few weeks ago). The committee’s next scheduled meeting is Wednesday, April 1.
This week also saw Alabama voters head to the polls for the “Super Tuesday” primary elections. While President Donald Trump and former Vice-President Joe Biden handily won the state’s presidential primary elections, other major races will need a runoff to decide the Republican or Democratic party nominee. In the highly-anticipated race for U.S. Senate, former Auburn head football coach Tommy Tuberville and former U.S. Attorney General Jeff Sessions outpaced the field, with Congressman Bradley Byrne coming in third. In the race to replace Byrne in Congressional District 1, Mobile County Commissioner Jerry Carl and former state Senator Bill Hightower will face each other in the runoff after state Rep. Chris Pringle came in third. And in Congressional District 2, Dothan businessman Jeff Coleman led the field on election day, with former state Rep. Barry Moore barely winning the battle for second place over Prattville businesswoman Jessica Taylor. The runoff election takes place on March 31. Interestingly, thanks to a recent change in state law, this is the shortest window of time between a primary and a runoff in Alabama’s history. Best wish to all the candidates whose campaigns are still alive, and a tip of the cap to anyone brave enough to put his or her name on an election ballot.
As always, Capitol Notes provides readers with a brief summary of legislation that might impact Alabama’s banking industry. Those summaries are as follows:
House Bill 21 by Rep. Chris Pringle (R-Mobile) expands the Alabama Residential Mortgage Satisfaction Act to include commercial agricultural property, meaning secured creditors would be required to record the satisfaction of a mortgage for commercial agricultural property upon a written request of a mortgagor or a creditor of the mortgagor. The bill was favorably reported by the House Financial Services Committee on Feb. 19 and is now able to be voted on by the full House.
House Bill 159 by Rep. Craig Lipscomb (R-Rainbow City) clarifies how a credit union calculates its taxable income for state income tax purposes. Current law allows a credit union to deduct “reasonable additions to reserves for losses, bad debts, or extraordinary expenses” from its calculation of taxable income. With the 2019 passage of the Financial Institution Excise Tax Reform Act (“FIETRA”), the Alabama Department of Revenue became more focused on the breadth and scope of this deduction. So, working with the credit union industry, legislation was developed to ensure that this deduction was only used for its intended purpose. This legislation does not in any way impact how a bank calculates its tax liability. The bill was favorably reported by the House Financial Services Committee on Feb. 19 and approved by the full House on March 3. It is now in a position to be voted on by the Senate Banking and Insurance Committee.
House Bill 207 by Rep. Chris Blackshear (R-Phenix City) and Senate Bill 166 by Sen. Shay Shelnutt (R-Trussville), the Financial Exploitation Prevention Act, gives financial service providers the authority to refuse or delay a financial transaction if there exists a reasonable belief that an elderly or vulnerable adult customer is or could be the target of financial exploitation. The bills also give financial service providers more discretion to contact persons, including non-accountholders, during an investigation into potential financial exploitation. The Alabama Bankers Association is the primary advocate for this legislation, though numerous other groups also support the bills. Both bills have passed through their respective House and Senate committees. The House bill was favorably reported by the House Financial Services Committee on February 19 and approved by the full House on March 3. It is now in a position to be voted on by the Senate Banking and Insurance Committee.
Senate Bill 103 by Sen. Linda Coleman-Madison (D-Birmingham) increases the fee paid to probate judges to record mortgages and earmarks the additional revenue to the Housing Trust Fund. Under current law, the recording tax equates to $75 for every $50,000 of indebtedness, with the revenue distributed to probate judges, counties, and the state. Under this proposal, the recording tax would equate to $100 for every $50,000 of indebtedness. The revenue would still be distributed to probate judges, counties, and the state, but one-tenth of the revenue would also be distributed to the Housing Trust Fund. This fund was created several years ago but has never been funded by the Legislature. Funds would be allocated by an Advisory Board to non-profit entities around the state that work to provide low-income housing. The bill was originally referred to the Senate Governmental Affairs Committee but was re-referred to the Senate Finance and Taxation – General Fund Committee. It was originally placed on that committee’s agenda on Feb. 19 but was carried over at the request of the sponsor. Several trade associations oppose the legislation and it is unlikely to reappear this session.
As of the end of the 10th legislative day, legislators have introduced 695 bills – 412 in the House and 283 in the Senate – and 140 resolutions. Of those 835 measures, 15 have been enacted into law as of this writing. The 2020 Regular Session can last for no more than 30 legislative days and must end on or before May 18.
The Legislature will reconvene for its 11th legislative day on March 10.