09 Jun END OF SESSION REPORT – JUNE 9, 2023

VOLUME 24 NUMBER 12 – JUNE 9, 2023

The Alabama Legislature reconvened on Tuesday, June 6th for the 30th and final legislative day of the 2023 regular legislative session. State legislators established special order calendars that focused on non-controversial bills to avoid filibusters and allow both chambers to focus on bills that could pass on the final day.

Distracted Driving Bill Makes it to the Finish Line

After years of effort by several sponsors in both the House and Senate, the Legislature passed a bill to prohibit the use of a cell phone or other electronic device while driving. SB 301, by Sen. Jabo Waggoner (R-Vestavia Hills),  states that it is a distracted driving violation if a driver crosses in and out of a traffic lane without using a turn signal, swerves, or otherwise operates the vehicle in an impaired manner while:

• Holding a cell phone or another electronic device
• Reading or sending a text message or email
• Watching a video
• Recording or broadcasting a video
• Using more than a single button or swipe of a finger to begin or end a call
• Reach for a cell phone or another electronic device in such a manner that requires the driver to no longer be in a seated driving position and properly restrained by a safety belt.

The bill includes exceptions, such as using the cellphone to call emergency services, using a cellphone with an earpiece, headphones, steering wheel controls, or a mount to allow hands-free operation, or using a cellphone while the vehicle is parked on the shoulder of the road. Rep. Matt Simpson (R-Daphne) offered a floor amendment clarifying that drivers not be pulled over solely for using a telecommunications device and had to illustrate poor or distracted driving. The House passed the amended version with a vote of 57-37-4 with the Senate later concurring with the changes unanimously. 

Bills that Failed to Receive  a Final Vote

Although the Legislature utilized all 30 legislative days this session, many significant bills did not receive a final vote. They include:

• 988 Suicide and Crisis Lifeline Funding (HB 389 / SB 328)
• Adult Material Cell Phone Filtering (HB 298)
• Greene County Historic Horse Racing (SB 324)
• Anti-Vaping for Minors (HB319)
• Expanding the Sales of Ready-to-Drink Beverages (SB 194 / SB 321)
• Film and Music Incentive Act of 2023 (HB 429)

It is widely anticipated that many if not all of these bills will be considered in future sessions. 

A Full Recap on This Year’s Legislative Sessions

Allocation of Final ARPA Funding

During a special session called within the regular session by Governor Ivey in early March, a little more than $1 billion in American Rescue Plan Act funding was distributed by state legislators with the majority of the monies going to water and sewer improvements, internet expansion, and healthcare facilities. This was the state’s second and final ARPA funding allocation after the 2020 and 2021 CARES Act funds. The proposal includes:

• $339 million for health care expenditures, including $100 million each for hospitals and nursing facilities to pay them for COVID-related costs
• $400 million for water and sewer  upgrades
• $260 million for broadband internet expansion

Sen. Chris Elliott (R-Josephine) offered an amendment that adjusted how the money for water and sewer projects can be spent. The amendment specified that up to $200 million of that could be spent on stormwater projects, as well as clean water and sewer infrastructure projects. Separately, $100 million would require local communities to put up matching funds of at least 35% in order to receive the federal money. 

The Game Plan Package

Another major priority during the regular session included a package of bills to extend and modify tax incentives the state offers potential employers by reauthorizing the Alabama Jobs Act and the Growing Alabama program. The Alabama Jobs Act was extended by lawmakers for an additional five years, and the yearly maximum on incentives was raised by $125 million to $475 million by 2027. 

A substantial new provision was included in the Alabama Jobs Act that added new tourism incentive language, the Sweet Home Alabama Tourism Investment Act.This new provision allows the state to offer qualified tourism destination projects tax rebates from the sales, use and lodging taxes that the project produces. This is a major victory for the tourism industry that will open up new opportunities to develop large tourism destination projects across Alabama.

The overall Game Plan, which also provides some state funding for the development of new industrial sites, was comfortably approved by both chambers. 

Record Budgets & Supplemental Appropriations

After 16 hours of negotiations earlier this month, the Legislature passed record funding for the Education Trust Fund and General Fund budgets. 

The $3 billion General Fund budget calls for a 6% increase in spending from the previous fiscal year. Some key items that were in the final General Fund budget include a 2% cost of living adjustment for state employees, increased spending for prisons, Medicaid, public and mental health, and law enforcement. Advocates for an increase in workforce funding in the Department of Mental Health’s budget received an increase in funding of  $7.5 million over last fiscal year. The full General Fund spreadsheet is available here. 

In addition to the General Fund budget, lawmakers approved approximately $200 million of supplemental appropriations for state and local projects. The Governor originally recommended $25 million for the new Whitewater Park project in the Education Trust Fund supplemental budget, but lawmakers decreased that amount to $5 million in the conference committee. Other local projects that received funding in the supplemental bill included funds to relocate the Mobile airport, the State Port Authority, and the Alabama Department of Forensics Lab in Huntsville. The supplemental appropriation legislation can be viewed here. 

Lawmakers also approved a record $8.8 billion Education Trust Fund budget and a $2.7 billion supplemental funding bill. The ETF budget did not undergo nearly as many changes as the General Fund budget and supplemental. Higher education institutions were allocated approximately $1.55 billion, including Christie Strategy Group client, Athens State University, who received approximately $20.5 million in the ETF and $7.35 million in the supplemental. 

One of the largest expenditures in the supplemental budget were the proposed one-time rebates to Alabama tax filers. Originally proposed as $400 rebates for individuals and $800 for couples, the Senate reduced the amount to $105 per person, only for a House committee to raise it to $210. The joint conference committee agreed to $150 per person, or $300 for couples. The full Education Trust Fund spreadsheet is available here, and the supplemental is available here. 

Historic Tax Cuts & Exemptions

After decades of advocacy for a reduction in the state’s grocery tax, lawmakers adopted a historic bill that will begin to decrease and eventually remove the state grocery tax. HB 479, by Rep. Danny Garrett (R-Trussville) will gradually decrease the state’s grocery tax by 1% each year starting on Sept 1, 2023 provided that the Education Trust Fund tax revenue increases by at least 3.5% in order to offset the losses. The Governor quickly signed the legislation and it is now law. 

This year, House Minority Leader Anthony Daniels (D-Huntsville) championed an initiative to provide working families with some relief by cultivating the idea of an overtime pay tax exemption. HB217 exempts overtime pay from state income taxes for hourly workers in the public and private sectors working more than 40 hours in a week. The current state income tax is 5%. The exemption takes effect Jan. 1, 2024. The Legislature added a $25 million cap before passing the bill last Thursday. The governor sent the bill back this Tuesday with an executive amendment that removed the cap altogether. Governor Ivey’s amendment also moved the expiration date up from Jan. 1, 2027, to June 30, 2025. Minority Leader Daniels expressed confidence that lawmakers will extend the exemption in the future.

Anti-ESG Legislation Passes

The Alabama Legislature joined other republican led states by passing anti-ESG (environmental, social, governance) legislation. SB261, sponsored by Sen. Dan Roberts (R-Mountain Brook) will “prohibit governmental entities from entering into certain contracts with companies that boycott businesses because the business engages in certain sectors or does not meet certain environmental or corporate governance standards or does not facilitate certain activities.” The bill would require companies doing business with state entities to provide written verification that the company will not participate in economic boycotts as defined by the bill. 

Ready-to-Drink Mixed Spirit Beverages Task Force Compromise

Advocacy groups and lawmakers worked to draft and introduce a couple of bill versions to expand the sale of mixed spirit beverages, also known as “ready-to-drink” beverages. Currently, canned beverages containing alcohol such as High Noon and many others are only sold in package and Alabama Alcoholic Beverage Control Board stores. 

Sen. Steve Livingston (R-Huntsville) filed SB 194 earlier in the session to allow licensed grocery and convenience stores to sell the pre-made “mixed spirit beverages,” which would be distributed by licensed liquor wholesalers. The bill was referred to the Senate Tourism Committee but never received a vote. After a couple of weeks, Sen. Bobby Singleton (D-Greensboro) introduced SB 321 to create and define state regulations for a new category of ready-to-drink mixed-liquor beverages containing no more than 12.5% alcohol by volume. The Singleton bill did not include franchiser provisions and allowed manufacturers of non alcoholic beverages, such as soft drink manufacturers, to directly distribute these new products.

A joint public hearing was held for both bills last Wednesday and committee members did not take a vote on the bills. A compromise was reached to create a task force study commission that will research and analyze the issue to recommend a new piece of legislation next year. 

Anticipated Special Session on Redistricting

Given the recent ruling of the United States Supreme Court striking down Alabama’s congressional districts based on violations of the federal Voting Rights Act of 1965, legislators are expected to return for a special legislative session in late summer/early fall to address redistricting. Many observers are speculating they will be called back in July or August as primary elections for new Congressional districts will be held in March of 2024. The decision of when the legislature is called into special session is made solely by the Governor.  

The legislature has adjourned sine die for the 2023 legislative session. The next regular legislative session will begin in February of 2024.