MONTGOMERY, Ala., March 12, 2021 —
The biggest story of the sixth week of the 2021 Regular Session happened during the first few hours of State House activity on Tuesday, as Senate Bill 214, the comprehensive casino/lottery/sports betting legislation sponsored by Sen. Del Marsh (R-Anniston) fell two votes shy of passing the Senate. The final vote was 19-13, but since the bill is a proposed constitutional amendment, 21 votes were required to send it to the House. Marsh brought this bill to the Senate floor two weeks ago but carried it over to continue working with Senators who had questions and concerns. Not long after the vote Tuesday, no fewer than six other gaming and lottery proposals were filed, ranging from carbon copies of Senate Bill 214 to simple lottery bills. It remains to be seen whether or how quickly those bills make it to the Senate floor.
On the banking front there was significant movement on several bills of importance to the association.
- Elder Abuse: Gov. Ivey signed SB181 into law on Tuesday night. Sponsored by Sen. Shay Shelnutt (R-Trussville) and managed in the House by Rep. Chris Blackshear (R-Phenix City), this legislation gives financial institutions full discretion to refuse or delay a financial transaction whenever elder financial abuse is suspected.
- Trustee Release: The House version (HB474 by Rep. Merika Coleman (D-Birmingham)) was reported out of House committee on Tuesday and the Senate version (SB282 by Sen. Shay Shelnutt (R-Trussville)) was approved by the full Senate on Thursday.
- LIBOR Discontinuance and Replacement: Again, both the House (HB475) and Senate (SB279) versions of this legislation moved this week. The House version (HB475 by Rep. Danny Garrett (R-Trussville)) was reported out of House committee on Tuesday and the Senate version (SB279 by Sen. Dan Roberts (R-Mountain Brook) was approved by the full Senate on Thursday.
- Remote Ink Notarization. Sen. Givhan’s version of this remote ink notarization legislation, SB275, passed the full Senate earlier on Thursday. It has been referred to the House State Government Committee and will be managed in the House by Rep. Andy Whitt (R-Huntsville).
This week also saw the introduction of legislation that the financial services community will be forced to strongly oppose. Sen. Garlan Gudger (R-Cullman) introduced SB316 on Tuesday, a bill that requires a credit card processor to deduct from the calculation of the credit card swipe fee the amount of state and local taxes and certain fees charged to the customer at the time of making a payment by credit or debit card. Bills related to Interchange Fees have been introduced across the country this year and are being pushed by the National Association of Convenience Stores. We have communicated our concerns to Sen. Gudger and others and will keep a close watch on this legislation.
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 House will consider the Senate bill next week.
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, which was amended with the help of the association, has passed out of committee and will be on the House floor next week.
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 was approved by a House committee this week and is now ready for a vote by the full House.
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 passed was approved by the Senate and is now in position to be considered by a House committee.
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 was approved by the full Senate this week and is in position to be voted on by a House committee. The House bill was approved by a House committee this week and is now in a position to be voted on by the full House.
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 was approved by the full Senate this week and is in position to be voted on by a House committee. The House bill was approved by a House committee this week 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
Through 14 legislative days, representatives and senators have introduced 876 bills – 541 in the House and 335 in the Senate – and 186 resolutions. As of this writing, 80 of those measures had been signed into law.
The legislature returns next week for the 15th and 16th legislative days of the 2021 session. Legislators can meet for no more than 30 legislative days, and the session must adjourn on or before midnight on May 17.
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 email@example.com or at (334) 782-1219.