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ISSUE NO. 1 / MARCH 2015
Session Begins as Crisis Looms

Legislators returned to Montgomery this week to begin the 2015 Regular Session of the Alabama Legislature. A host of new legislators face the looming specter of budget shortfalls and the challenge to fix Alabama's budget woes once and for all.

 

During the annual State of the State address, Governor Bentley outlined the dire shape of Medicaid and Alabama's prison system. He discussed the need for expanded pre-K programs and increased spending on economic development as ways to get Alabama on a stronger footing for the future. To do so, the Governor's plan calls for un-earmarking revenue, closing tax loopholes, and other targeted tax increases as the way forward.

 

His speech mirrored the comments he made to the HBAA Board of Directors in February. His plan doesn't include raising any fees or taxes paid by builders. This is a relief to everyone after rumors indicated that all fees, deductions, and taxes were on the table for consideration. Governor Bentley has offered an open door to the HBAA to discuss its concerns as the budget battle begins in the Legislature.

2015 HBAA President Lynn Corder listens as Governor Bentley addresses the HBAA Board of Directors on February 19. The HBAA was the first business group to hear the Governor's revenue enhancement plan to address the budget short falls. Governor Bentley pledged his continued support for housing and that it would remain a priority throughout his second term.  

 

Legislators have not openly embraced the Governor's proposal. Newly elected legislators have already expressed concern with the revenue enhancements called for in the plan, fearing a voter backlash. Although "right-sizing" has reduced the size of state government by 12 percent, legislators have promised to look at further cuts as a way to soften the blow.

 

Rumors have begun to swirl that a special session this summer may be needed to address all of the state's financial needs. What the outcome will be remains unclear, but one thing is certain - Alabama's budget woes will be the primary focus of 2015.

HBAA Legislative Agenda Takes Shape

The HBAA Legislative Agenda was unveiled during February's Governmental Affairs meeting. Here are the primary bills that the HBAA will be promoting in 2015:

 

HOME OWNERS ASSOCIATION (HOA) LEGISLATION

The HBAA has worked closely with Rep. Mac McCutcheon over the past several months to come up with legislation that would be agreeable with the Alabama Realtors Association and the Alabama Bankers Association.   The product of those efforts has now been drafted and we expect Rep. McCutcheon will introduce the bill next week.

Here are the specifics on the proposed legislation:

  • HBAA draft language requires all HOAs (going forward) to be registered non-profit associations.
  • Existing non-profit statutes cover all points raised by the HOA advocates and do not require writing new code sections to Alabama law.
  • Developers will determine through their declaration the point at which control will be handed over to the HOA.
  • The Alabama Association of Realtors and the Alabama Bankers Association fully support this legislation.

HVAC LEGISLATION

The HVAC legislation is being redrafted after several items from previous versions were omitted. The new draft should be completed by Monday. Representative Jack Williams has agreed to sponsor the bill and he will introduce the bill as early as Tuesday. The HBAA will be working closely with the House Boards and Commissions committee to get the bill assigned to committee as soon as possible.

Here are the specifics on the proposed legislation:

  • Directs unused funds to the Alabama Home Builders Foundation for HVAC industry specific trade education support.
  • Establishes registration for DET contractors as an affordable alternative to HERS and BPI raters.

PLUMBERS LEGISLATION

The plumbers legislation that was introduced last year has been revised and is currently being drafted. We expect the draft to be completed by next week with introduction the following week. Senator Gerald Allen and Rep. Jack Williams will once again serve as sponsors for the proposed legislation. As soon as it is introduced, the HBAA will move to get the bills on the calendar for committee action at the earliest opportunity.

Here are the specifics on the proposed legislation:

  • Directs unused funds to the Alabama Home Builders Foundation for plumbing industry specific trade education support.
  • Eliminates the bond requirement.
  • Affirms the Board's right to issue consent agreements.
  • Creates alternative disciplinary actions rather than relying solely on license revocation.
Right of Redemption Reduction

For several years, an effort was launched to reduce the right of redemption time frame on residential property from one year to ninety days. The HBAA vehemently opposed those actions and was successful in preventing its passage. Had the HBAA not been successful in stopping the legislation, the measure would have severely impacted builders and developers with inventoried lots and homes. The issue has reemerged in recent months as a modified approach that excludes property owned by builders and developers.

 

The new effort will be to reduce the right of redemption to ninety days for homes that have been granted a homestead exemption only. The HBAA has worked with the sponsors of the bill to clarify the exemption of builder/developer owned property.  The end product of the process is SB 124 by Senator Reed (R-Jasper), which has been assigned to the Senate Banking and Insurance committee.

 

The HBAA will follow the progress of the bill throughout session to ensure that the exemption remains in place.
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