Week Two of the 2021 Legislative Session

BCA Governmental Affairs Staff

BCA Governmental Affairs Staff

Lt. Governor Ainsworth Talks COVID Recovery and Military Stability with BCA Members

BCA was excited to host Lt. Gov. Will Ainsworth during Tuesday’s BCA Governmental Affairs Committee Briefing held via Zoom. Gov. Ainsworth provided a status of the state economy since the initial outbreak of the COVID-19 pandemic. He also provided a favorable report on both state budgets as well as the three main priority bills that were passed through the legislature this week.

“What BCA does for our state, especially this year with the COVID situation, should be commended,” said Gov. Ainsworth. “In Alabama, under Gov. Ivey’s leadership, as well as our committee, which BCA was a big part of, we were able to get the economy reopened.”

Gov. Ainsworth mentioned several other priorities, beginning with an emphasis on improving the lives of veterans and military families in our state. The goal is for Alabama to become the most military and veteran friendly state in the nation. He shared numerous pathways currently being explored on ways to achieve that outcome. He also mentioned work being done in the areas of workforce development and education as well as the aerospace industry within our state.

“Alabama is in a great spot for the next five to ten years for growth,” stated Gov. Ainsworth. “I’m encouraged by everything, from our education system and some of the things we are doing there to improve, to the business climate. We all have to continue to work together to improve people’s lives. It’s a great time to be an Alabamian.”

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 February 23 for an update on the third week of session. In the meantime, be sure to follow BCA on Facebook, Twitter, and Instagram for further updates and information.

Three BCA Priority Bills Pass Legislature, Signed by Governor in First Two Weeks of Legislative Session

Three BCA priority bills received final passage from the Alabama Legislature this week and were then signed into law by Governor Ivey on Friday. 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.

SB 30, sponsored by Sen. Arthur Orr (R-Decatur) and Rep. David Faulkner (R-Homewood) passed the Senate by a vote of 28-1, passed the House by a vote of 86-4, and was signed into law by Governor Ivey on Friday. This new law provides businesses, healthcare workers, churches, and other entities with much-needed COVID-19 civil liability protections. These protections include civil immunity 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. “Businesses throughout Alabama are continuing to do all they can to keep their employees and customers safe while also allowing hardworking Alabamians the opportunity to provide for their families. This legislation provides the necessary protections for businesses large and small as they continue to revive jobs and restore production throughout our state,” said Katie Boyd Britt, president and CEO of BCA. 

The second BCA priority issue signed into law 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) and Sen. Greg Reed (R-Jasper) passed the House by a vote of 94-1 and the Senate by a vote of 28-1. The major provisions of HB 192 extend the Alabama Jobs Act and the Growing Alabama Credit to July 31, 2023, and increase the annual cap for both incentives. Both the Alabama Jobs Act and the Growing Alabama Tax Credit have proven to be key tools in furthering economic development in both urban and rural parts of our state and creating much-needed job opportunities in struggling communities across Alabama.

The third major piece of legislation that now becomes law is HB 170, sponsored by Rep. Danny Garrett (R-Trussville) and Sen. Dan Roberts (R-Mountain Brook). This bill passed the House of Representatives by a vote of 94-0, and then the Senate by a vote of 27-0. This new law will make the payments and benefits from the coronavirus relief bills passed by Congress exempt from state income taxes. This includes direct payments to individuals and any forgiven loans provided to businesses under the Paycheck Protection Program and other government relief initiatives related to COVID. “Businesses and individuals throughout the state received this pandemic relief funding as a lifeline during these challenging times. Having this relief exempt from state taxes is imperative in allowing these funds to be used for their intended purpose,” said BCA President and CEO Katie Boyd Britt.

HB 170 also includes a second component, unrelated to COVID-19, which makes several changes to the state’s business tax structure. These new tax provisions will implement revenue neutral measures to benefit companies that elect to invest in both property and personnel in this state, as well as decouple from provisions of the Tax Cut and Jobs Act (TCJA) that would hinder Alabama’s competitiveness in economic development.

BCA Legislative Priorities

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

SB 30 passed the House of Representatives by a vote of 86-4 on Thursday and was quickly signed into law by Governor Ivey on Friday. This important piece of legislation 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 by Governor

HB 192 passed the Senate by a vote of 28-0 on Wednesday and was signed into law by Governor Ivey on Friday. This new law 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 rual 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 by Governor 

HB 170 passed the Senate by a vote of 27-0 on Wednesday and was signed into law by the Governor on Friday. This bill will ensure 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 woud 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.

HB 408: Guidance on Classification of Workers
Sponsors: Rep. Wes Ktichens (R-Arab)
BCA Position: Support
Status: Pending Approval by the House State Government Committee

HB 408 was filed in the House of Representatives on Thursday and has been assigned to the House State Government Committee. This legislation 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.

Other Bills of Interest

SB 46: Medical Marijuana
Sponsor: Sen. Tim Melson (R-Florence)
BCA Position: Monitor
Status: Pending Action by the Senate

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.

SB 227: Regulations on Pharmacy Benefit Managers
Sponsor: Sen. Tom Butler (R-Huntsville)
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 and from paying a pharmacy for prescription drugs an amount different than the amount the pharmacy benefits manager contracted with the health benefit plan to charge the health benefit plan for those same prescription drugs. 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-Hollingers Island)
BCA Position: Monitor
Status: Pending Approval by the House Commerce & 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: Passed the Senate 

SB 126 passed the Senate by a vote of 25-4 on Thurday and has been transferred to the House where it has been assigned to the Judiciary Committee. This bill 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: Pending Action by the Senate

SB 214 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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