Week One of the 2021 Legislative Session

BCA Governmental Affairs Staff

BCA Governmental Affairs Staff

Governor Ivey Addresses BCA Members as the 2021 Legislative Session Gets Underway

The Business Council of Alabama (BCA) was thrilled to kick off the 2021 Legislative Session by hosting Governor Kay Ivey at BCA’s Governmental Affairs Committee briefing on Tuesday, February 2 held via Zoom. During her address, she spoke of three priority pieces of legislation she hopes to see during the first two weeks of session: the reauthorization of economic development incentives, the establishment of liability protections, and parameters surrounding the taxation of PPP funds within the state.

“The Business Council of Alabama has always been one of our strongest partners over the years, and BCA has been at the forefront championing some of our state’s most urgent causes,” stated Governor Ivey. “One of the projects that comes to mind is the Rebuild Alabama Act a few years ago that’s already rapidly transforming our state’s infrastructure and enhancing Alabama’s appeal to some of the world’s largest companies…Efforts like this have shown me that I can always rely on your organization to deliver when our state needs you the most, and I hope you can all say the same for me.”

Governor Ivey thanked BCA for our support of her administration and encouraged everyone to continue the bipartisan efforts, working on behalf of all Alabamians. She also discussed the impressive statistics surrounding the Revive Alabama and Revive Plus programs, both of which BCA played a part in securing, getting over $276 million into the hands of more than 18,000 small businesses.

BCA was also excited to have Horace Horn, vice president of PowerSouth Energy, on the call to introduce Governor Ivey.

Lt. Gov. Will Ainsworth will join us on Tuesday, February 9 for our next Governmental Affairs Committee Briefing. Be sure to register for next week’s meeting so you don’t miss this opportunity to hear from Governor Ainsworth.

BCA Priorities See Quick Action in First Week of 2021 Legislative Session

Three BCA priority bills passed out of their respective chambers in the first week of the 2021 legislative session. This quick action is unusual during a normal session; however, leaders in both chambers recognized the importance of addressing these issues as soon as possible.

These three priority issues include the long anticipated COVID liability protections bill, a bill to reauthorize several key economic development incentives, and a bill to exempt COVID pandemic financial assistance (CARES Act stimulus payments, PPP forgiven loans, Revive Alabama grants, etc.) from state income tax.

Legislation to provide businesses, healthcare workers, churches, and other entities has been greatly needed as Alabama continues its economic recovery from the coronavirus pandemic. Fortunately, SB 30, sponsored by Sen. Arthur Orr, R-Decatur, was the first bill to pass the Senate in 2021 and did so by a vote of 28-1. SB 30 provides civil immunity for covered entities operating in Alabama from certain claims and damages claimed by individuals who allege that they contracted or were exposed to COVID-19 as long as those entities make an effort to adequately follow government issued guidelines related to operating in the COVID-19 environment. This legislation now goes to the House of Represenatives where it will be carried by Rep. David Faulkner, R-Birmingham, and has been assigned to the House Judiciary Committee.

The second priority issue that made strides this week was the reauthorization of key economic development incentives that have proven track records on job creation and industry recruitment. HB 192, sponsored by Rep. Bill Poole, R-Tuscaloosa, passed the House by a vote of 94-1 and now moves on to the Senate where it will be carried by newly elected Senate President Pro Tem Greg Reed. The major provisions of HB 192 would extend the Alabama Jobs Act and the Growing Alabama Credit to July 31, 2023, and would also increase the annual cap for both incentives.

The third major piece of legislation that saw action this week was HB 170, sponsored by Rep. Danny Garrett, R-Trussville, passed the House of Representatives by a vote of 94-0 on Thursday and now awaits action in the Senate. This bill would make the payments and benefits from the coronavirus relief bills passed by Congress exempt from state income taxes. This would direct payments to individuals and any forgiven loans provided to businesses under the Paycheck Protection Program. This legislation also has a second component, unrelated to COVID-19, which makes several changes to the state’s business tax structure. These new tax provisions would implement revenue neutral measures to benefit companies that elect to invest in both property and personnel in this state. They also include decoupling from provisions of the Tax Cut and Jobs Act (TCJA) that woud hinder Alabama’s competitiveness in economic development.

BCA Legislative Priorities

SB 30: COVID Civil Liability Protections
Sponsor: Sen. Arthur Orr (R-Decatur)
BCA Position: Support
Status: Passed the Senate

SB 30 passed the Senate by a vote of 28-1 on Thursday and has been assigned to the House Judicial Committee. This important piece of legislation would provide civil immunity for covered entities operating in Alabama from certain claims and damages claimed by individuals who allege they contracted or were exposed to COVID-19. Exceptions to this immunity would exist if the covered entity acted with wanton, reckless, willful or intentional misconduct, and such misconduct must be proven under a “clear and convincing” evidentiary standard.

HB 192: Reauthorization of Economic Development Incentives
Sponsor: Rep. Bill Poole (R-Tuscaloosa)
BCA Position: Support
Status: Passed the House of Representatives

HB 192 passed the House of Representatives by a vote of 94-1 and has been assigned to the Senate Finance and Taxation Education Committee. HB 192 would reauthorize and reestablish three key economic development incentives: the Alabama Jobs Act, the Growing Alabama Credit, and the Alabama Port Credit. The Alabama Jobs Act will be extended to July 31, 2023, and the annual cap will be increased to $325 million in 2021 and to $350 million in 2022. The Growing Alabama Credit will be extended to July 31, 2023, with the annual cap increased to $20 million a year. $5 million will be reserved in the first six months of the year for rual counties and up to $4 million for technology accelerators.

HB 170: Alabama Taxpayer Stimulus Freedom and Alabama Business Tax Competitiveness Acts
Sponsor: Rep. Danny Garrett (R-Trussville)
BCA Position: Support
Status: Passed the House of Representatives

HB 170 passed the House of Representatives by a vote of 94-0 and has been assigned to the Senate Finance and Taxation Education Committee. This bill’s first component, the Alabama Taxpayer Stimulus Freedom Act, would ensure that economic stimulus payments, and related recovery rebates or credits, received by Alabamians will not be subject to state income tax. It also would exclude from state income tax any relief received by businesses such as PPP loan amounts that are forgiven, as well as financial assistance provided through federal Emergency EIDL Grants, EIDL Targeted Advances, and Grants to Shuttered Venues. At the state level, the bill would also exempt grants received by small businesses from the Revive Alabama and Revive Plus programs.

The second component of HB 170, the Alabama Business Tax Competitiveness Act, is designed to enact revenue neutral measures to benefit companies that elect to invest in both property and personnel in this state, and to decouple from provisions of the Tax Cut and Jobs Act (TCJA) that woud hinder Alabama’s competitiveness in economic development. This will be achieved through enacting “single sales factor” income tax apportionment to level the playing field for companies that elect to headquarter in this State, or to make other investments in property and personnel, by allowing them to exclude these investments when calculating their state income tax liabilities. This legislation also eliminates at the state level the limitation on business interest deductions imposed under IRC Section 163(j) for years in which an Alabama corporate taxpayer, or its federal filing group, would not be subject to this limitation at the federal level.

Other Bills of Interest

SB 46: Medical Marijuana
Sponsor: Sen. Tim Melson (R-Florence)
BCA Position: Monitor
Status: Received Favorable Report from the Senate Judiciary Committee

SB 46, also known as the Compassion Act, would authorize the use of medical marijuana in Alabama by requiring patients to obtain a medical marijuana card from a doctor to treat certain medical conditions included in the legislation. In terms of employee workforce, this legislation includes business protection provisions and worker’s compensation provisions in order to ensure the potential law does not expose the business community to additional civil liability if the use of medical marijuana is authorized.

HB 244: Alabama Research and Development Act
Sponsor: Rep. Danny Garrett (R-Trussville)
BCA Position: Support
Status: Pending Approval by the House Ways & Means Education Committee

HB 244 – the Alabama Research and Development Act – would implement a research and development tax credit to certain Alabama companies. The credit would be based on in-house research, contracted research, and consortium research expenses for qualified research conducted in Alabama. This bill would limit the Alabama Research and Development tax credits to no more than $25 million of credits for research and development expenses in any calendar year, and no eligible company or business could claim more than 20 percent in a single tax year.

HB 214: Coronavirus Vaccine Discrimination
Sponsor: Rep. Chip Brown (R-Hollingers Island)
BCA Position: Monitor
Status: Pending Approval by the House Commerce and Small Business Committee

HB 214 would prohibit an employer from taking adverse action against an employee or prospective employee based on the employee’s immunization status. It would also prohibit a ticket issuer for an entertainment event from denying entry to the event based on immunization status.

HB 216: Consumer Data Requirements
Sponsor: Rep. Craig Lipscomb (R-Gadsden)
BCA Position: Opposed
Status: Pending Approval by the House Technology & Research Committee

HB 216 would allow a consumer to request a business to disclose personal information it collects about the consumer and to require a business to make those disclosures under certain conditions. It would also allow a consumer to request the deletion of certain personal information and require a business to delete certain personal information under certain conditions.

SB 126: Home Alcohol Delivery
Sponsor: Sen. Jabo Waggoner (R-Vestavia Hills)
BCA Position: Monitor
Status: Received Favorable Report from the Senate Judiciary Committee 

SB 126 would provide for a delivery service license issued by the Alcoholic Beverage Control Board that would allow the licensee to deliver sealed beer, wine, and spirits from certain licensed retail establishments directly to individuals in Alabama who are at least 21 years of age for their personal use.

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