Week Eleven of the 2022 Legislative Session

Capital Briefing

Week Eleven of the 2022 Legislative Session

BCA Governmental Affairs Staff

House Ways and Means Education Chairman Danny Garrett Provides Update on the Education Trust Fund Budget

Alabama House Ways and Means Education Chairman Danny Garrett (R-Trussville) was the featured speaker this week at BCA’s Government Affairs Briefing in Montgomery. Representative Garrett provided an update on the current legislative session, including the state of the Education Trust Fund budget and several pieces of legislation supporting small businesses.

Scope of Work Narrows for Legislature as End of the Session Approaches

The Legislature convened for its 24^th, 25^th, and 26^th legislative working days as the 2022 session heads for the home stretch. Only four working days remain in the 2022 regular session which could all be achieved next week if the Legislature chooses to adopt a Tuesday-Friday meeting schedule. This four-day meeting schedule is likely to be the game plan for next week with many legislative members eager to turn their full attention to their respective campaign trails which are headed for the May 24 primary election.

As number of the available legislative working days shrinks, both chambers will begin to focus on a smaller scope of bills due to the minimized time that remains in this session. Any bills that have not been transmitted out of their original chamber are typically considered suspended for the remainder of the session.

Legislation Aimed at Curtailing Tax Incentives Stalls

A bill that would have put numerous economic development incentives at risk of being repealed did not receive approval from the Senate this week and is considered indefinitely suspended for this legislative session. Senate Bill 303, by Sen. Arthur Orr (R-Decatur), would have repealed up to nine economic development incentives effective December 31, 2027, unless those incentives were extended by an act of the legislature. These incentives included the Coal Production Tax Credit, Veterans Employment tax credit, Rural Physician tax credit, and the Irrigation Equipment tax credit among others. This bill would have also put extension limitations on all tax incentives going forward. Additionally, Senate Bill 303 would have created new reporting requirements for any state agency that administers any economic tax incentive. The new reports would have to be prepared and submitted to the legislature. This legislation, a replacement to the more aggressive Senate Bill 57, received approval from the Senate Finance and Taxation Education Committee on Tuesday but never made it to the Senate floor for consideration.

Bill to Eliminate Business Privilege Tax Passes Legislature

On Thursday, the Senate gave final approval to House Bill 391, by Rep. Steve Clouse (R-Ozark). Sen. Tom Butler (R-Huntsville) carried the bill in the Senate which was overwhelmingly approved by a vote of 30-0. This was identified as a priority piece of tax relief legislation by Senate and House leadership and was made possible by responsible budgeting and the fiscal health of the state’s budgets. This bill will lower the minimum business privilege tax from $100 to $50 for the taxable year beginning December. 31, 2022. Under current law, the minimum business privilege tax due for certain corporations, business trusts, limited liability entities, and disregarded entities is not less than $100. The most important provision of this bill is the eventual elimination of the minimum business privilege tax which, once it goes into effect after December 31, 2023, will save small businesses in Alabama $23 million a year.

General Fund Budget Heads to Governor’s Desk; Education Budget Nears Final Passage

The Education Trust Fund Budget and General Fund Budget, both at record-setting totals, were the focal point of this week in the Legislature. On Thursday, the General Fund Budget’s conference committee report received concurrence from the House and the Senate and now goes to the Governor’s desk for her signature. The historic budget totals $2.7 billion and has several noteworthy line items. Included in the budget is a 4 percent pay raise for state employees, a one-time bonus for retired state employees, extra funds for the Alabama Department of Mental Health, and $2.7 million for the World Games in Birmingham. The Education Trust Fund Budget was the Senate’s main focus on Thursday when a substituted version of the budget received unanimous approval by the Senate body and now goes back to the House for concurrence or non-concurrence. The historic budget appropriates $8.2 billion from the Education Trust Fund to various state agencies, entities, institutions, and public schools.

Below is a list of other notable bills that either received legislative action this week or have officially been postponed for the session:

On Tuesday, the Senate passed Senate Bill 272 by Sen. Dan Roberts (R-Birmingham) with a unanimous vote of 33-0. The bill would create rules and regulations for doctors who provide telehealth and telemedicine services in the state. to be used in Alabama. The goal of this bill is to put in place the same standards of care received for in-person for remote visits as well. Patients would be limited to 4 visits every 12 months for the same issue. If the Patient has a different issue, the visit count will reset. Prescriptions of controlled substances would still require an in-person visit in order to be prescribed to a patient. Senate Bill 272 received approval from the House Health Committee on Thursday and now awaits debate on the House floor.
The legislature gave final approval to House Bill 136 by Rep. Danny Garrett (R-Trussville) which provides a 4 percent pay raise for teachers and support personnel. Additionally, the bill will increase the automatic salary increases educators receive as they advance in their careers, with the size of the raise being based on a teacher’s qualifications and years of experience. In the same vein, Senate Bill 134 by Rep. Alan Baker (R-Brewton) also passed the legislature and provides a retirement plan to Tier II teachers after 30 years of service. Currently, teachers under the 2012 Tier II system can’t collect retirement benefits until age 62 which can deter potential young teachers.
The House gave final legislative approval to Senate Bill 171 by Sen. Arthur Orr (R-Decatur), also known as the Alabama Numeracy Act. The bill now goes to the Governor’s desk for her signature. The Numeracy Act, aimed to help boost math skills of Alabama Students, would establish an Elementary Mathematics Task Force, a Postsecondary Mathematics Task Force and an Office of Mathematics Improvement within the State Department of Education. The bill would also dedicate more than $80 million for additional math coaches in schools throughout the state, particularly ones deemed as low-performing.
Dueling gambling bills in the House and Senate have stalled in their respective chambers and will likely not be considered this legislative session. However, lawmakers fully expect the issue to be back up for consideration in the next legislative session following the 2022 election season. The House gambling bill, sponsored by Rep. Chip Brown (R-Hollinger’s Island), proposed establishing a state lottery and using proceeds to provide scholarships to help families pay a portion of tuition at two- and four-year colleges. Sen. Greg Albritton (R-Atmore) sponsored the Senate’s version of the gambling legislation would have authorized a lottery, sports betting, and eight full casinos with slots and table games.
On Tuesday, House Bill 162 by Rep. Lynn Greer (R-Rogersville) received a favorable report from the Senate Finance and Taxation Education Committee. This bill will provide that up to $6,000 of taxable retirement income is exempt from state income tax for individuals who are 65 years of age or older. The bill now awaits passage in the Senate.
On Wednesday, the House Education Policy Committee gave a favorable report to Senate Bill 261 by Sen. Dan Roberts (R-Mountain Brook) which would increase the allowable tax credit for individuals who donate to private school scholarships through the Alabama Accountability Act. The 2013 law allows for tax credit-funded scholarships for families leaving the state’s lowest-performing public schools.

A status of BCA-supported bills, as well as other bills the governmental affairs team is tracking, can be found in the policy section of BCA’s Capital Briefing below.

BCA Bills of Interest

HB 391: Business Privilege Tax
Sponsor: Rep. Steve Clouse (R-Ozark)
BCA Position: Support
Status: Passed the Legislature – Awaits Governor’s Signature

HB 391 received final legislative approval on Thursday when it passed the Senate by a vote of 30-0. This bill will lower the minimum business privilege tax from $100 to $50 for the taxable year beginning December. 31, 2022. Under current law, the minimum business privilege tax due for certain corporations, business trusts, limited liability entities, and disregarded entities is not less than $100. The most important provision of this bill is the eventual elimination of the minimum business privilege tax which, once it goes into effect after December 31, 2023, will save small businesses in Alabama $23 million a year.

SB 224: Unemployment Compensation Requirements Updated
Sponsor: Sen. Arthur Orr (R-Decatur)
BCA Position: Support
Status: Pending Action in The House

SB 224 increases the requirement standard for receiving unemployment compensation in Alabama. Under current law, an unemployed individual must make a reasonable and active effort to secure work for which he or she is qualified to be eligible to receive unemployment benefits. This bill would require an unemployed individual to search for work a certain number of times per week to be eligible to receive unemployment benefits.

HB 82: Small Business Relief and Revitalization Act
Sponsor: Rep. Danny Garrett (R-Trussville)
BCA Position: Support
Status: Signed into Law

HB 82 also known as the Small Business Relief and Revitalization Act will allow businesses to exempt up to $40,000 of the market value of business personal property from ad valorem tax levied by the state. HB 82 would also ensure that any relief funding from the American Rescue Plan Act received by qualifying disadvantaged farmers is exempt from state income tax. This bill will also provide a one-month extension of the due date of tax returns for Alabama financial institution excise taxpayers and corporate income taxpayers in the tax years beginning on or after January 1, 2021, without incurring a late filing penalty. HB 82 will also increase the average monthly state sales tax liability threshold calculation to $5,000 or greater during the preceding calendar year for required estimated payments.

HB 408: Economic Development Incentives Reporting Requirements
Sponsor: Rep. Neil Rafferty (D-Birmingham)
BCA Position: Oppose
Status: Pending Action from the House Ways and Means Education Committee

HB 408 would require the Alabama Department of Revenue to submit a Unified Economic Development Budget (UEDB) to provide policymakers and taxpayers with a comprehensive accounting of all economic development spending. This legislation is similar to SB 57 by Senator Arthur Orr (R-Decatur).

SB 303: Repeal/Sunset of Certain State Tax Credits, Incentives, and Abatements
Sponsor: Sen. Arthur Orr (R-Decatur)
BCA Position: Oppose
Status: Pending Action in The House

SB 303 is a new but similar version of SB 57. The primary difference between the two bills is that SB 303 narrows the scope of tax incentives, abatements, and credits to nine specific credits, while also requiring the same reporting requirements proposed by SB 57. Additionally, each state agency that administers any economic tax incentive shall prepare and submit to the Legislature a report regarding each incentive offered. The House Ways and Means Education Committee and the Senate Finance and Taxation and Education Committee will conduct joint hearings on expenditure reports provided by the Department of Revenue. The incentives that SB 303 will impact include the Brownfield Development Tax Abatement Act, Rural Physician Tax Credit, Coal Production Tax Credit, Reemployment Act of 2010, Full Employment Act of 2011, Veterans Employment Act, Irrigation Equipment Tax Credit, Entertainment Industry Incentive Act of 2009, and Alabama Enterprise Zone Act.

SB 17: Security of Critical Infrastructure
Sponsor: Sen. Garlan Gudger (R-Cullman)
BCA Position: Support
Status: Signed into Law

SB 17 would provide increased protections for critical infrastructure assets through enacting enhanced criminal penalties for the act of damaging critical infrastructure. It also provides penalties for individuals who commit the crime of unauthorized entry of a critical infrastructure asset with a weaponized unmanned aircraft system. Critical infrastructure assets need to be protected for public and environmental safety and economic stability reasons. These include facilities or structures such as a chemical manufacturing facility, a pipeline, a natural gas storage facility, an electric grid control center, and a water treatment facility.

SB 125: Local Government Broadband Grants
Sponsor: Sen. Clay Scofield (R-Guntersville)
BCA Position: Support
Status: Pending Action in the House

SB 125 proposes an amendment to the Constitution of Alabama which would authorize the state, a county, or a municipality to grant to public or private entities federal award funds or any other source of funding designated for broadband infrastructure by state law for providing or expanding broadband infrastructure.

SB 152: ARPA Relief Funding Tax Exemption – Child Tax Credit
Sponsor: Sen. Dan Roberts (R-Mountain Brook)
BCA Position: Support
Status: Signed into Law

SB 152 will ensure families aren’t penalized on their state income taxes for the increased child tax credit they received through the federal ARPA bill. The tax relief measures included under this bill include increased child tax credit, increased dependent care credit, and increased and modified earned income credit, which totals around $2 billion in additional pandemic relief benefits that were received by Alabama families.

HB 20: Extension of Sales Tax Exemption for Certain Military Aircraft Parts
Sponsor: Rep. Paul Lee (R-Dothan)
BCA Position: Support
Status: Pending in the House of Representatives

HB 20 was substituted and approved by the 24-0 Senate vote on Thursday and now heads back to the house for concurrence or non-concurrence. This bill would extend the tax exemption for the gross receipts from the sale of parts, components, and systems that become a part of a fixed or rotary wing military aircraft and that satisfy other criteria from May 30, 2022, to May 30, 2032.

SB 57: Repeal/Sunset of Certain State Tax Credits, Incentives, and Abatements
Sponsor: Sen. Arthur Orr (R-Decatur)
BCA Position: Oppose
Status: Pending Approval by the Senate Finance and Taxation Education Committee

SB 57 would repeal any tax incentive, credit, or abatement that doesn’t currently have a prescribed sunset or expiration provision unless the Legislature passes an extension on December 31, 2022. The Alabama tax code contains numerous individual and businesses tax incentives, credits and abatements that are often used as a tool to for economic development at the statewide and local levels. It would also establish annual reporting requirements for all tax incentives, credits, and abatements that would be subject for review by the House and Senate Education committees.

HB 16 and HB 29: Private Right of Action Against Employers (COVID Vaccinations)
Sponsor: Rep. Tommy Hanes (R-Bryant)
BCA Position: Oppose
Status: Pending Approval by the House Judiciary Committee

HB 16 and HB 29 would establish a private right of action against employers for any adverse reaction, injury, temporary, permanent disability or death of an employee arising from an employer mandate that the employee receive a COVID-19 vaccine.

HB 31: Civil Cause of Action Against Employers (Immunization Status Discrimination)
Sponsor: Rep. Ritchie Whorton (R-Owens Cross Roads)
BCA Position: Oppose
Status: Pending Approval by the House Judiciary Committee

HB 31 creates a civil cause of action prohibits employers for alleged discrimination against an individual based on their immunization status. HB 31 would allow for an employer, potential employer or place of public accommodation be subject to a civil cause of action. It lists available remedies to include, but not be limited to: injunctive relief; compensatory damages; punitive damages and attorney fees.

HB 272: Firearm Concealed Carry Permits and Constitutional Carry
Sponsor: Rep. Shane Stringer (R-Citronelle)
BCA Position: Monitor
Status: Signed into Law

HB 272 passed the legislature on Thursday with a vote of 23-6 and was quickly signed into law by the Governor. This bill would eliminate the requirement for person(s) to acquire a concealed carry permit in the State of Alabama. This bill would also revise the presumption that an individual that is carrying a pistol without a permit is evidence of intent to commit a crime. Two amendments supported by the BCA, were added to the legislation to ensure that employers property rights are protected.

HB 1: Pregnant Workers Fairness Act
Sponsor: Rep. Neil Rafferty (D-Birmingham)
BCA Position: Monitor
Status: Pending Approval by the House Judiciary Committee

HB 1 would require that employers provide reasonable accommodations for employees related to pregnancy or childbirth unless the accommodations would cause undue hardship on the employer. If an employee is denied reasonable accommodations, then they may bring a cause of action against their employer.

SB106: General Fund Budget Appropriations
Sponsor: Sen. Greg Albritton (R-Atmore)
BCA Position: Monitor
Status: Awaiting the Governor’s Signature

SB 106 received final legislative approval on Thursday and now heads to the Governor’s desk for her signature. SB 106 is the FY 2023 General Fund Budget, which makes the appropriations for the ordinary expenses of the executive, legislative, and judicial agencies of the State. Also included in the appropriations package is for other functions of government, debt service, and for capital outlay.

HB 130: Healthcare Certificate of Need Program
Sponsor: Rep. Andrew Sorrell (R-Muscle Shoals)
BCA Position: Oppose
Status: Pending Approval by the House Health Committee

HB 130 proposes the repeal the certificate of need program and abolishes the Certificate of Need Board, the State Health Planning and Development Agency, the Statewide Health Coordinating Council, and the Health Care Information and Data Advisory Council. Under existing law, health care services and facilities are required to apply for and receive a certificate of need before they can build new health care related facilities or offer expanded services.

SB 27: Prescription Drug Compliance Standards
Sponsors: Sen. Tom Butler (R-Madison)
BCA Position: Oppose
Status: Pending Approval by the Senate Banking and Insurance Committee

SB 27 would require a health insurer to communicate to a physician or other health care professional with authority to prescribe drugs, within three business days of receiving a request for insurance coverage of a prescription drug benefit, that the request is approved, denied or requires supplemental documentation. This legislation also requires a health insurer to communicate with a physician or other health care professional with the authority to prescribe drugs, regarding the approval or denial of the request, within three business days of receiving sufficient supplemental documentation.

SB 31: Employer Requirements for Family Leave Related to Adoption
Sponsor: Sen. Andrew Jones (R-Centre)
BCA Position: Monitor
Status: Pending Approval from the House Ways and Means General Fund Committee

SB 31 would require the State of Alabama to offer 12 weeks of family leave to eligible employees for the birth and care of a child during the first year after the birth of the child, and for an adopted child within one year of placement. This bill would also require employers who provide certain additional maternity benefits to female employees to extend those to employees who become adoptive parents. Under current law, employers are not required to provide family leave for adoptive parents, during or after the time of the adoption.

HB 135: Education Trust Fund Budget
Sponsor: Rep. Danny Garrett (R-Trussville)
BCA Position: Monitor
Status: Pending Concurrence by the House of Representatives

HB 135 unanimously passed the Senate on Thursday and now goes back to the House for consideration. This bill is the Education Budget for the State of Alabama. It makes the appropriations for the support, maintenance and development of public education in Alabama, for debt service, and for capital outlay for the fiscal year ending September 30, 2023.

SB 10: Interactive Computer Service Provider Censorship
Sponsor: Sen. Arthur Orr (R-Decatur)
BCA Position: Monitor
Status: Pending Approval by the Senate

SB 10 would prohibit a large interactive computer service provider from taking certain restrictive or suppressive action against a user of its service based on either a viewpoint expressed or shared by the user or true statements of fact expressed by the user. The bill provides for civil liabilities from an effected user against a major interactive computer service provider.

Capital Briefing