AL HB475

Enacts the LIBOR Discontinuance and Replacement Act of 2021 to address the discontinuance of the London Interbank Offered Rate (LIBOR) used in financial contracts, securities, and instruments.

Prohibits parties to contracts from refusing performance or declaring breach based on LIBOR discontinuance or use of replacement interest rate indices.

Automatically replaces LIBOR with a recommended benchmark replacement (Term SOFR, SOFR, or other recommended benchmarks) on the LIBOR replacement date for contracts without viable fallback provisions.

Provides safe harbor from litigation and liability for entities selecting or using recommended benchmark replacements, and deems such replacements as commercially reasonable equivalents that do not constitute breach, amendment, or taxable events.

Applies to all Alabama contracts including commercial transactions and cannot be displaced by other state law; becomes effective immediately upon passage and gubernatorial approval.