Capitol Notes: Legislature Adjourns

The Legislature adjourned sine die yesterday thus concluding the 2024 Regular Session. Below is a report of what happened during the final week.

Alabama Legislature Passes Record-Breaking Budgets

The Alabama Legislature recently completed its duty of passing budgets for the upcoming fiscal year (FY25).  This year, both the Education Trust Fund (ETF) and the General Fund saw historic increases.

Education Funding Reaches New Heights

The ETF, which funds K-12 and higher education, boasts a record $9.3 billion budget. This includes a 2% raise for teachers and educational staff.  Here are some spending highlights:

• $90 million for school nurses
• More than $5 billion for local school boards to cover teacher salaries and K-12 administration
• Nearly $90 million to the Department of Commerce for workforce development and educational programs
• $587 million to the Community College System
• $221 million to the Department of Early Childhood Education, primarily for pre-kindergarten programs

Supplemental Funding Boosts Education Initiatives

In addition to the main ETF budget, a supplemental appropriation bill (HB144) allocates an additional $681 million. This funding targets various initiatives, including:

• College and career readiness grants
• Literacy and summer reading programs
• More than $100 million for local school boards for buses, Foundation Program shortfalls, textbooks, and supplies
• $50 million for education savings accounts under the CHOOSE Act
• Hundreds of millions distributed across higher education institutions for various projects

ETF Advancement and Technology Fund Allocates One-Time Funding

Finally, HB147 allocates $1 billion from the ETF Advancement and Technology Fund. This fund saves “extra” money from the ETF each year to prevent proration (reduction) in case of revenue shortfalls. This year, K-12 schools and higher education institutions received a combined $1 billion for one-time upgrades to capital projects or technology:

• $274 million for higher education institutions
• $726 million for K-12 schools

General Fund Budget Reflects Growth and Priorities

The General Fund budget, which supports non-educational agencies, also reached a record high of $3.3 billion. Key allocations include:

• $736.5 million for the Department of Corrections, reflecting a doubling of its budget in a decade
• $955 million for the Alabama Medicaid Agency, a slight increase to account for declining federal COVID pandemic funding
• $2.07 billion for the Department of Transportation (ALDOT), with $1.57 billion dedicated to road maintenance and improvement. This includes $240 million from the Rebuild Alabama Program funded by the 2019 gas tax increase.

General Fund Supplement Addresses Specific Needs

The General Fund supplement offers an additional $254 million for targeted projects, including:

• $20 million for a new parking deck near the ongoing State House construction
• $150 million for additional prison construction funding due to rising costs
• $5 million for pier repairs at the Port of Mobile
• $20 million for site development under the SEEDS Act

This breakdown clarifies the Alabama Legislature’s recent budget actions, highlighting the significant investments made in education and infrastructure while acknowledging potential future challenges due to leveling-off revenue.

Working for Alabama Legislative Package Signed by Gov. Kay Ivey

The Alabama Legislature passed the final two bills in the Working for Alabama package, aimed at boosting the state’s low labor participation rate. Gov. Kay Ivey held a signing ceremony on Thursday to enact each of the six bills, which earned bi-partisan support in both chambers.

• HB358: Childcare Tax Credit
  • Creates tax credits for companies that provide childcare for employees.
  • Allocates $15 million annually, increasing to $20 million by 2027.
  • Offers tax credits up to $25,000 to childcare providers meeting specific quality standards.

 

• HB346: Workforce Housing Tax Credit
  • Provides tax credits for private development of workforce housing.
  • Offers up to $5 million annually, with a per-project limit of $2 million.
  • Reserves 20-25% of annual credits specifically for rural areas.

Lottery, Gaming Proposal Dead

A proposed lottery and gaming package in Alabama fell one vote short of reaching the public ballot. Despite efforts to gain the one vote needed for final passage in the Senate, the package died without a final vote.

Gov. Ivey indicated that she needs to see consensus from the Legislature on a proposal before contemplating calling the Legislature into a special session to address the issue.

Bill Limiting Unionization for Businesses Receiving Incentives Granted Final Passage

A bill impacting unionization efforts in Alabama, SB231 sponsored by Sen. Arthur Orr, received final passage by the Legislature and awaits Gov. Ivey’s signature to become law.

Key Points of the Bill:

• Conditions on Incentives: Businesses that accept government financial aid (grants, loans, or tax credits) cannot voluntarily recognize unions for their employees unless a secret ballot vote is held.
• Employee Privacy: Employers cannot disclose employee contact information without consent.
• Penalties for Violation: Failure to comply means repaying all economic development incentives received for the project.
• Enforcement: Applies to agreements made with state, county, or city governments after Jan. 1, 2025.

This bill is seen as a response to efforts by the United Auto Workers (UAW) to organize workers in Southern auto plants, including an upcoming vote at the Mercedes plant in Vance, Ala.

Bill Makes Kindergarten Readiness a Requirement (Starting 2026-2027)

Rep. Pebblin Warren’s multi-year effort to require children to complete kindergarten or pass a readiness assessment before entering first grade awaits Gov. Ivey’s signature.

Previously, there was no mandatory kindergarten enrollment in Alabama. Children could enter first grade directly if they turned six by a certain date.

Here’s a breakdown of the new law:

• Requirement: Students must complete kindergarten or demonstrate first-grade readiness through a test.
• Start Date: This requirement goes into effect for the 2026-2027 school year, giving schools and families time to adjust.

Alabama Limits Property Tax Assessment Increases to 7% Annually

House Bill 73, sponsored by Rep. Pettus, has been passed by the Alabama Legislature and awaits Gov. Ivey’s signature. This bill puts a cap on how much property tax assessments can increase each year.

Key Points:

• Limits on Increases: Property tax assessments for most businesses and residences can only go up by a maximum of 7% per year.
• Exceptions: There are some exceptions, such as properties that undergo major renovations or are sold.
• Effective Date: This law applies to property assessments starting Oct. 1, 2024.
• Sunset Provision: The 7% cap will expire in 2027, meaning it will be reviewed after three years.

Alabama Speeds Up Public Records Requests with New Law

A new law in Alabama will make it faster and easier for people to obtain public records. Senator Orr’s SB270 sets deadlines for how quickly government agencies must respond to requests for information. Previously, there were no time limits.

Here’s what the new law means:

• Deadlines: Agencies now have specific timeframes to respond to public record requests.
• Simpler Requests: For basic requests that take less than eight hours to fulfill, agencies must respond within 15 days. This could include acknowledging receipt, providing the records, or explaining a denial.
• More Complex Requests: For requests requiring more work (over eight hours), agencies have 45 days to respond.
• Governor’s Support: Governor Ivey signed the bill into law quickly, demonstrating her commitment to government transparency.

Ethics Reform Bill Stalled in Committee

A proposed overhaul of Alabama’s ethics law, championed by Rep. Matt Simpson (HB227), didn’t pass the Senate Judiciary Committee. While the committee didn’t reject the bill entirely, they opted to postpone a decision.

Here’s what happened:

• Rep. Simpson’s Bill: This bill aimed to clearly define the roles of the Attorney General and the Ethics Commission. Under the proposal, the Ethics Commission would handle civil enforcement of ethics violations, while the Attorney General would focus on criminal prosecution.
• Committee’s Decision: The Senate Judiciary Committee decided not to pass the bill this session, opting for more time to study the issue.

Looking Ahead:

• Further Review: The Legislature passed a resolution to hire an outside consultant to analyze ethics laws from other states.
• Next Steps: The committee will revisit the issue in 2025, likely using the consultant’s findings to inform discussions on potential ethics reform legislation.

Overall, this means ethics reform in Alabama is on hold until next year. The Legislature will have a chance to consider different approaches based on a broader review of ethics laws around the country.

 

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Below is a list of bills tracked this session by our governmental relations team.

Bill	Sponsors	Title	Last Action	Latest Version
AL 2024rs SB 252	Greg J. Reed	Alabama Growth Alliance Bill Companion bills: HB 372	Senate • May 09, 2024: Enacted	Act Number 2024-309
AL 2024rs HB 358	Anthony Daniels	Relating to child care and workforce development; to establish the employer tax credit and child care provider tax credit; to make legislative findings.	House • May 09, 2024: Enacted	Act Number 2024-303
AL 2024rs HB 346	Cynthia Almond	Establishes the Alabama Workforce Housing Tax Credit Act; creates the Alabama Workforce Housing Tax Credit	House • May 09, 2024: Enacted	Act Number 2024-302
AL 2024rs SB 151	Arthur Orr	State Investments and Public Contracts; to prohibit State Treasurer and Board of Control of RSA and TRSA from using ESG factors in investment decisions; may consider pecuniary factors; to prohibit state entities from considering ESG factors when awarding public contracts	Senate • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs SB 243	Dan Roberts	Economic development; state law authorizing counties and municipalities to provide for innovation districts as public corporations authorized; innovation district use of public funds for public or private persons authorized; Constitutional Amendment	Senate • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs SB 242	Bobby D. Singleton	Innovation Districts; establishment of by counties and municipalities as public corporation authorized; provide for the powers of innovation districts	Senate • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs HB 349	James Lomax	Innovation Districts; establishment of by counties and municipalities as public corporation authorized; provide for the powers of innovation districts.	House • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs HB 373	Kelvin Lawrence	Alabama Workforce Pathways Act, different pathways for high school diplomas based on future career plans Companion bills: SB 253	House • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs HB 372	Randall Shedd	Alabama Growth Alliance Bill Companion bills: SB 252	House • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs HB 368	Neil Rafferty	Economic development; state law authorizing counties and municipalities to provide for innovation districts as public corporations authorized; innovation district use of public funds for public or private persons authorized; constitutional amendment	House • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs HB 344	Danny Garrett	Alabama Workforce Transformation Act FY24 Regular Session	House • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs HB 389	Shane Stringer	Financial Institutions; to prohibit financial institutions from using a merchant category code to identify firearms transactions; to prohibit disclosure of financial information regarding firearms transactions	House • May 07, 2024: Currently Indefinitely Postponed	Introduced
AL 2024rs SB 281	Tim Melson	Financial Institutions; to prohibit financial institutions from using a merchant category code to identify firearms transactions; to prohibit disclosure of financial information regarding firearms transactions	Senate • May 07, 2024: Enacted	Act Number 2024-232
AL 2024rs HB 227	Matt Simpson	Ethics; laws pertaining to public officials and public employees revised (Judiciary (Senate))	Senate • May 02, 2024: Pending Committee Action in Second House (Judiciary)	Engrossed
AL 2024rs SB 247	Steve Livingston	Alabama Workforce Transformation Act FY24 Regular Session SENATE	Senate • Apr 25, 2024: Enacted	Act Number 2024-115
AL 2024rs SB 253	Donnie Chesteen	Alabama Workforce Pathways Act, different pathways for high school diplomas based on future career plans Companion bills: HB 373	House • Apr 23, 2024: Signature Requested	Enrolled
AL 2024rs HB 366	Chris Sells	Consumer protection, further provides for data breaches (Judiciary (House))	House • Mar 21, 2024: Pending Committee Action in House of Origin (Judiciary)	Introduced
AL 2024rs SB 250	Chris Elliott	Establishes the Alabama Workforce Housing Tax Credit Act; creates the Alabama Workforce Housing Tax Credit (Finance and Taxation Education (Senate))	Senate • Mar 21, 2024: Pending Committee Action in House of Origin (Finance and Taxation Education)	Introduced
AL 2024rs SB 187	Merika Coleman	Digital assets, regulates digital asset operations (Banking and Insurance (Senate)) Companion bills: HB 214	Senate • Feb 29, 2024: Pending Committee Action in House of Origin (Banking and Insurance)	Introduced
AL 2024rs HB 242	Ben Harrison	Anti-discrimination against military. (Judiciary (House))	House • Feb 27, 2024: Pending Committee Action in House of Origin (Judiciary)	Introduced
AL 2024rs HB 214	Mike Shaw	Digital assets, regulates digital asset operations (State Government (House)) Companion bills: SB 187	House • Feb 21, 2024: Pending Committee Action in House of Origin (State Government)	Introduced
AL 2024rs HB 205	Prince Chestnut	Retail establishments; banning cash as payment source prohibited, exceptions provided (Commerce and Small Business (House))	House • Feb 20, 2024: Pending Committee Action in House of Origin (Commerce and Small Business)	Introduced
AL 2024rs HB 61	Chip Brown	Public contracts; ESG criteria prohibited in public contract. (State Government (House))	House • Feb 06, 2024: Pending Committee Action in House of Origin (State Government)	Introduced