Capitol News & Notes: Week Five

Capitol News & Notes: Week Five

The Legislature slowed down slightly last week using two legislative days on Tuesday and Thursday and using Wednesday as a committee day. They have completed 14 of 30 possible session days. As of today, March 16, the House has introduced 541 bills, and the Senate has introduced 335 bills.


REALTOR®-Sponsored Homestead Exemption Bill Passes House

HB344, sponsored by Rep. David Faulkner (R-Mountain Brook) and eight co-sponsors, will give county tax assessing officials the option of receiving claims for homestead exemptions electronically.  Last Tuesday, it passed the House with a unanimous 99-0 vote and received its first reading in the Senate. It is awaiting action in the Senate Governmental Affairs Committee. Thank you, Rep. Faulkner, for making this important issue a priority!


REALTOR®-Sponsored Remote Ink Notary Bill Passes Senate

As reported last week, SB275, sponsored by Sen. Sam Givhan (R-Huntsville), would amend current notary law to give the option of remote ink notarization. On Thursday, an amendment was considered by the Senate that provides civil penalties for intentional violation of the section. The Senate voted for the amendment and unanimously passed the bill with a 28-0 vote. It will move to the House next where Rep. Andy Whitt (R-Harvest) will carry the bill. SB275 is supported by Alabama REALTORS®, the Alabama Bankers Association and Alabama Land Title Association. Thank you, Sen. Givhan & Rep. Whitt, for your work on this issue!


AREC Sunset Bill

The Alabama Legislature’s Sunset Committee reviews audits of certain state agencies on a one- to four-year cycle to ensure compliance with state laws and regulations. Initially, HB63, sponsored by Rep. Rex Reynolds (R-Huntsville) and Rep. Howard Sanderford (R-Huntsville), provided for the continuance of the Alabama Real Estate Commission (AREC) until October 1, 2023, in accordance with the Sunset Committee’s recommendation. The bill passed the House and was amended in the Senate for AREC to only be renewed for one year to October 1, 2022, at which time it would be reviewed again for another cycle. The bill passed the Senate as amended with a 32-0 vote. The House concurred with the amendment and the bill has moved to Governor Ivey’s desk to be signed into law.


REALTOR®-Sponsored Bill to Modernize the Code and Operations of AREC

SB331, sponsored by Sen. Shay Shelnutt (R-Trussville), Sen. Dan Roberts (R-Birmingham), and Sen. Sam Givhan (R-Huntsville), would modernize the code in a manner that ensures AREC can fulfill its mission in the most ethical, accountable, and transparent way possible.

 SB 331 would provide further accountability, ethics, and transparency in the operations of AREC and its use of public funds and real estate licensee resources, by doing the following: prohibit the use of public funds and real estate licensee resources from engaging in political speech and activity; prohibit the use of public funds and real estate licensee resources to hire contract lobbyists, legislative consultants, or legislative counsels; establish that Commissioners are bound by the Alabama Ethics Act; establish best practices and clear guidelines for the ethical conduct for Commissioners to avoid conflicts of interest, elimination of market competitors, and abuse of the mantle of their public office for personal gain; require AREC staff to provide annual ethics training and guidance for Commissioners; require use of contractor vendors be closely tied to advancing the core mission of AREC;  and require disclosure of financial institutions holding AREC funds and provide internal controls to avoid conflicts of interest and self-dealing.

SB331 would modernize the code, definitions, and the operations of AREC, with the following updates: update the current appointment process to coincide with other licensing boards; provide for virtual online education courses and allow for one-hour continuing education classes; require specific time allocation for risk management, fair housing, and ethics education in pre-license and continuing education; increase the years of experience required to obtain a broker license; create greater accountability for unprofessional behavior and violations of state or federal fair housing laws; update definition of property management activities that fall under the jurisdiction of AREC; and update definitions and strike unnecessary and outdated sections of the code. Thank you Sen. Shelnutt, Sen. Roberts, and Sen. Givhan for sponsoring this legislation.


Employee Classification Bill

HB408, sponsored by Rep. Wes Kitchens (R-Arab), would require employers to use the IRS test (Rev. Rule 87-41, 1987-1 C.B. 296) to make a determination of employment for purposes of employee benefits and tax liability. This is the existing federal test and should have no impact on the determination of most REALTORS® as independent contractors. On Thursday, this bill was passed by the House in a 99-0 vote, and it will move to the Senate next.


Contingency for Discontinuance of LIBOR

SB279, sponsored by Sen. Dan Roberts (R-Birmingham) and six co-sponsors, would prohibit parties to a contract from refusing to perform under their contractual obligations or declaring a breach of contract due to the discontinuance of London Inter-Bank Offered Rate (LIBOR). Since LIBOR is expected to start its gradual phase out by the end of this year, this bill would provide needed security for the power to contract. On Thursday, the Senate passed this bill with a 28-0 vote, and it will move to the House for consideration next.


State of Emergency “Essential” Designation

HB103, sponsored by Rep. Jamie Kiel (R-Russellville), would eliminate the distinctions between “essential” and “non-essential” businesses during a state of emergency. REALTORS® were fortunate to be considered “essential” workers during this pandemic, but many industries were not as fortunate. If this bill were to pass, the state must either allow all business that were able to comply with health orders to stay open or close all businesses down, rather than choosing which businesses can stay open. This bill passed the House two weeks ago and was given a favorable report by the Senate Fiscal Responsibility and Economic Development Committee on Wednesday. The bill will now move to the Senate for consideration.


Public Records Act

SB165, sponsored by Sen. Arthur Orr (R-Decatur), would improve Alabama’s open records law. The bill would require public agencies to respond to open records requests within 14 days and limit the fees that an agency can charge for copies. It would exempt investigative files, such as those seen by AREC, from the act.  On Wednesday, the Senate Judiciary Committee carried the bill over so that Sen. Orr can work with groups to further strengthen the bill. This bill will have to come back up in committee for approval before moving to the Senate.


A Look Ahead

The House reconvened today at 1 p.m., and the Senate reconvened at 3 p.m. This week, it is expected that the Legislature will only meet for two legislative days and use Wednesday as a committee day again. After this week, the Legislature will enjoy Spring Break for at least one week starting March 22, and will have 14 legislative days remaining upon their return before they must adjourn Sine Die on May 18.