House committee holds public hearing on bill to tax cash international transfers to fund local costs tied to migrant influx

At a House committee public hearing, lawmakers heard testimony on House Bill 297, a proposal to impose a 4% fee on cash international wire transfers made through in‑person money‑transmission businesses such as Western Union or MoneyGram. Representative Fiddler, the bill sponsor, said the fee would direct 2.5% of revenue to the local communities that bear the costs of migrant influxes and 1.5% to sheriffs statewide, and that the measure includes a three‑year sunset and a legislative study group to review results.

The bill matters, sponsors and supporters said, because counties and local governments are seeing fiscal pressures linked to recent migration patterns — from uncompensated hospital care to additional costs in K‑12 classrooms and county jails. Representative Fiddler told the committee, "It takes 4% on that wire transfer, and it puts 2.5% back into the community in which the burden occurs ... 1 and a half percent is about to help the sheriff's statewide." She said an expected revenue estimate is "no less than 10,000,000." Supporters representing sheriffs also described cash transfers as a conduit for criminal networks. "This is organized crime at its finest," said Randy Hillman (former prosecutor and representing sheriffs), describing storefront phone‑based transfer operations.

Opponents — including the Money Service Business Association and representatives of large retailers — said the fee would saddle small businesses and customers, reduce transparency, and push transactions to less regulated channels. Kathy Tomashevsky, executive director of the Money Service Business Association, told the committee, "HB 2 97 increases cost of businesses, consumers, and regulators while reducing transparency and weakening law enforcement's ability to track illicit activity. I respectfully urge you to vote no on HB 2 97." Patrick McWhorter, representing Walmart Stores Inc. and the Alabama Grocers Association, said many customers who use in‑store money services lack bank accounts and could be unable to reclaim the proposed credit; he said military families in particular might not be able to recover the fee through tax credits.

Technical witnesses described monitoring and reporting practices and limits. Beau Brown of the Alabama Securities Commission said the commission regulates money transmitters in Alabama and that larger firms voluntarily report transaction totals; he told the committee, "We had, I believe, a hundred and $80,000,000 worth of international transfers, in 2024, I believe." Brown also described other avenues for moving funds — including prepaid cards and stablecoin (USDT/Tether) transfers — and said those alternatives, internet access, and fee structures inform how easily actors can shift around a new fee.

Committee members asked about exemptions and scope. Representative Timm and others emphasized that the bill is written to exempt transfers originating from banks, credit unions, credit/debit cards and online payment processors such as PayPal and Venmo; sponsor Fiddler repeated that the fee targets in‑person cash transfers through money service businesses (MSBs). The bill would allow individual tax credits to recover the charge (committee testimony indicated a credit mechanism and, per testimony by an industry witness, a maximum credit figure discussed as $5,000), but several witnesses said the credit process could be burdensome in practice for unbanked customers.

No vote was taken at the hearing. Representative Fiddler asked to carry the bill forward with the committee's immigration study group and indicated a willingness to continue negotiations about technical definitions and exemptions.

The hearing record includes competing claims on enforcement and revenue: proponents said the fee is a practical revenue source for local needs tied to migration; critics said it would harm small businesses and reduce law enforcement visibility by pushing transactions out of regulated channels. The sponsor and technical staff said the bill pulls language from an Oklahoma law used as a model and includes an operational exemption list drafted with the Alabama Securities Commission.

As of the close of the hearing, the committee had not scheduled a vote; the sponsor indicated she would continue to work with committee members and state agencies on technical changes and to convene a study group to evaluate the policy's effects and implementation.