Week Six of the 2021 Legislative Session

BCA Governmental Affairs Staff

BCA Governmental Affairs Staff

Senate Minority Leader Touts Early Success on Key Issues, Encourages Continued Bipartisan Efforts

BCA was honored to host Senate Minority Leader Bobby Singleton as this week’s Governmental Affairs Briefing keynote speaker. Sen. Singleton began by noting the great progress the legislature has made on critical issues during the first half of the legislative session. He also shared his optimism for the remainder of session that will follow next week’s spring break.

In the first six weeks, Sen. Singleton noted that there were several significant bills passed and was excited about what that meant for the people of Alabama. He was especially thrilled to see the inclusive language in the package of economic development incentives that were reauthorized during the first two weeks. Those incentives will benefit the business community, including minority-owned, women-owned, and rural businesses.

Sen. Singleton also noted that the two budgets were sitting in a great spot, something he says is a result of two things – being fiscally responsible and displaying strong bipartisan efforts to work together on behalf of all Alabamians.

Looking forward, Sen. Singleton said the legislature is looking at ways to solve some of the issues highlighted by COVID, including a lack of broadband and access to rural healthcare. He also mentioned a desire to reconsider the gaming legislation previously voted down by the Senate as it would benefit some of the aforementioned areas.

Due to the break in the legislative session next week, we will not host a Governmental Affairs Committee Briefing. Please plan to join us on March 30 at 9:00 a.m. for our next scheduled briefing which will feature House Minority Leader Anthony Daniels. In the meantime, be sure to follow BCA on Facebook, Twitter, and Instagram for further updates and information.

Legislature Concludes Productive First Half of Productive Legislative Session

The Alabama Legislature completed its 15th and 16th legislative working days this week which puts it past the halfway point of the 30 days working days allowed in a regular legislative session.

Several key issues saw action in their respective chambers this week. The Senate passed a $7.6 billion education budget, a bill that would exempt airport authorities in the state from paying sales and use taxes, as well as a bill that would create a mental health program for the state public school system. The major items that passed the House of Representatives included legislation that would establish the COVID-19 Recovery Capital Credit Protection Act which would make certain changes to the state capital credit program. Also progressing was a bill dealing with any legal action contesting reapportionment, which is the process carried out by the legislature to redraw legislative and congressional districts.

Several bills of interest were favorably reported out of committees in both the House and Senate, including a BCA-priority bill to provide businesses with clear and consistent guidelines when classifying employees which passed out of Senate committee. Below is a list of notable bills that received legislative action this week:

To see the status of BCA’s legislative priorities, as well as other bills the governmental affairs team is tracking, check out the policy section of BCA’s Capital Briefing below.

BCA Legislative Priorities

HB 408: Guidance on Classification of Workers
Sponsor: Rep. Wes Kitchens (R-Arab)
BCA Position: Support
Status: Received a Favorable Report from the Senate Fiscal Responsibility and Economic Development Committee

HB 408 received a unanimous favorable report from the Senate Fiscal Responsibility and Economic Development Committee on Wednesday. This bill would require employers and state agencies to use the same specified guidelines to determine whether a worker is to be classified as an employee or independent contractor. This will require state government agencies to use a uniformed set of criteria that will mirror the federal government criteria which will provide businesses with clear and consistent guidelines when classifying employees.

SB 249: Relocation of Call Centers
Sponsor: Sen. Clay Scofield (R-Guntersville)
BCA Position: Support
Status: Pending Approval by the House of Representatives

SB 249 would make important changes to a law passed in 2019 which penalized companies that relocate a call center without giving advanced notice to the State. SB 249 would ensure that only call centers receiving incentives from the state are subject to the law and would define the term “relocate” as physically relocating outside the state of Alabama.

SB 30: COVID Civil Liability Protections
Sponsors: Sen. Arthur Orr (R-Decatur) and Rep. David Faulkner (R-Homewood)
BCA Position: Support
Status: Signed into Law 

SB 30 was signed into law and provides 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 when it comes to complying with government issued COVID guidelines. Such misconduct must be proven under a “clear and convincing” evidentiary standard.

HB 192: Reauthorization of Economic Development Incentives
Sponsors: Rep. Bill Poole (R-Tuscaloosa) and Sen. Greg Reed (R-Jasper)
BCA Position: Support
Status: Signed into Law

HB 192 was signed into law and reauthorizes three key economic development incentives: the Alabama Jobs Act, the Growing Alabama Credit, and the Alabama Port Credit. 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 rural counties and up to $4 million for technology accelerators. 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 Jobs Act also includes a provision to provide enhanced incentives to attract new investment and jobs for black-owned and woman-owned businesses, as well as businesses operating as a critical supply chain entity.

HB 170: Alabama Taxpayer Stimulus Freedom and Alabama Business Tax Competitiveness Acts
Sponsors: Rep. Danny Garrett (R-Trussville) and Sen. Dan Roberts (R-Mountain Brook)
BCA Position: Support
Status: Signed into Law

HB 170 was signed into law and ensures that economic stimulus payments, and related recovery rebates or credits, received by Alabamians will not be subject to state income tax. It will also 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.

HB 170 will also enact revenue neutral measures to benefit companies that elect to invest in both property and personnel in this state, as well as measures to decouple from provisions of the Tax Cut and Jobs Act (TCJA) that would hinder Alabama’s competitiveness in economic development. HB 170 is designed to help level the playing field for companies that elect to headquarter in this State, or 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

HB 281: Historical Tax Credit Reauthorization
Sponsor: Rep. Victor Gaston (R-Mobile)
BCA Position: Support
Status: Pending Approval by the Senate Finance and Taxation Education Committee

HB 281 proposes extending tax credits for qualified rehabilitation expenditures for the substantial rehabilitation of certified historic structures through 2027. The Alabama Historical Committee will be responsible for the administering of the tax credit program and approving the rehabilitation of qualified structures that qualify for the income tax credit. No tax credit claimed for any certified rehabilitation may exceed $5,000,000 for all allowable property types except a certified historic residential structure, and $50,000 for a certified historic residential structure.

SB 215: Broadband Expansion
Sponsor: Sen. Del Marsh (R-Anniston)
BCA Position: Support
Status: Pending Approval by the House Urban and Rural Development Committee  

SB 215 would create the Alabama Digital Expansion Authority which would be tasked overseeing the expansion and availability of high-speed broadband services throughout the state. The eventual plan adopted by the authority would be at least partially funded through a gambling expansion bill that is still up for debate in the legislature. Another funding component includes the creation of the Alabama Digital Expansion Finance Corporation that could issue bonds of up to $250 million to finance eligible projects.

SB 46: Legalization of Medical Marijuana
Sponsor: Sen. Tim Melson (R-Florence)
BCA Position: Monitor
Status: Pending Approval by the House 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 both 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 210: Hospital Discharge Data Collection
Sponsor: Rep. Paul Lee (R-Dothan)
BCA Position: Support
Status: Passed the Senate – Awaiting Governor’s Signature

HB 210 passed the Senate by a vote of 28-0 on Tuesday and now heads to the Governor’s desk for her signature. This bill would require the Alabama Department of Public Health to collect, compile, and analyze certain patient discharge data from certain hospitals. This bill will also require the Department of Public Health to adopt a set of rules pertaining to the protection, collection, and dissemination of hospital discharge data. This bill requires also establishes the Hospital Discharge Data Advisory Council to advise the department on rule making, as well as membership.

HB 340: Sales and Use Tax Exemption on Materials for Road/Bridge Projects
Sponsor: Rep. David Faulkner (R-Homewood)
BCA Position: Support
Status: Pending Approval by the Senate Finance and Taxation Education Committee

HB 340 would allow for the purchase of construction materials and supplies for highway, road and bridge projects that are contracted with a government entity to be exempted from sales and use taxes. Currently, a licensed contractor that enters into a contract with a government entity to undertake a project does not have to pay sales and use tax on construction materials and supplies for that project. The current law pertains to all construction contracts entered into by government entities, with the exclusion of highway, road and bridge projects. The bill’s fiscal note states that sales and tax receipts to the Education Trust Fund would be reduced by an estimated $11.5 million annually.

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 165Certificate of Existence Fee for Businesses
Sponsor: Rep. Reed Ingram (R-Pike Road)
BCA Position: Support
Status: Pending Action in the Senate

HB 165 will allow the Secretary of State to waive the $25 Certificate of Existence fee if a state of emergency has been declared in this state or another. The fee can also be waived if the federal government determines substantial compliance with certain provisions of law unreasonable.

HB 14 and SB 11: Airport Authority Sales and Use Tax Exemption
Sponsor: Rep. Rex Reynolds (R-Huntsville) and Sen. Sam Givhan
BCA Position: Support
Status: SB 11 Passed the Senate / HB 14 Passed the House

SB 11 passed the Senate on Tuesday by a vote of 28-0. HB 14, the House companion bill, has passed the House and awaits committee action in the Senate. These bills would exempt airport authorities from paying sales and use taxes. This bill would also include airport authorities in the list of governmental entities that may be issued a certificate of exemption from sales and use taxes on certain projects and in the list of governmental entities that shall obtain an annual certificate of exemption.

SB 92: Mental Health Program for Students
Sponsors: Sen. Roger Smitherman (D-Birmingham)
BCA Position: Support
Status: Passed the Senate

SB 92 passed the Senate on Tuesday by a vote of 28-1. This bill would require the State Department of Education to develop a program to help address the mental health of students who are considered at-risk for various mental health issues.

SB 227: Regulations on Pharmacy Benefit Managers
Sponsors: Sen. Tom Butler (R-Huntsville) and Rep. Nathaniel Ledbetter (R-Rainsville)
BCA Position: Oppose
Status: Pending Approval by the Senate Banking & Insurance Committee

SB 227 would prohibit pharmacy benefit managers from reimbursing a pharmacy in an amount less than the amount the pharmacy benefits manager reimburses an affiliated pharmacy of the pharmacy benefits manager. It also prohibits Alabamians from being able to choose to get their prescriptions using less expensive options like getting them in the mail. It also restricts the ability of health plans to ensure that pharmacies meet network and quality of care standards. If enacted, this legislation will increase drug costs for employers, employees, and the State by placing severe regulations on mail order pharmacy services which will impair the ability of pharmacy benefit managers to effectively manage health benefit costs.

HB 214: Coronavirus Vaccine Discrimination
Sponsor: Rep. Chip Brown (R-Hollinger’s 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: Oppose
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: Pending Action by the House of Representatives

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.

SB 214: Legalization of Gaming and Establishment of State Lottery
Sponsor: Sen. Del Marsh (R-Anniston)
BCA Position: Monitor
Status: Vote to Pass the Senate Failed – Still Pending in the Senate

SB 214 failed to pass the Senate in a 19-13 vote. Because the bill is a constitutional amendment, it requires approval from two thirds of the full membership of the Senate which is 21 members. This bill proposes a constitutional amendment, and if approved by the voting public, would establish the Alabama Education Lottery, allow casino-style games and electronic bingo to be operated only at specified locations, and allow sports wagering at specified locations or through an Internet sports wagering platform. The bills fiscal note states that the Alabama Education Lottery will generate an estimated $194-$279 million annually. It also states that the gaming component will generate an estimated $260-$393 million annually from the 20 percent tax on gaming revenues.

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