Legislative Report – February 12, 2021

Volume 22 Number 2 – February 12, 2021

4th, 5th, & 6th legislative days

Coronavirus priority legislation signed by Governor

The Governor signed three priority bills on Friday. SB 30 by Sen. Arthur Orr (R – Decatur) would provide civil immunity for business entities, health care providers, educational entities, churches, governmental entities, and cultural institutions from certain damages claimed by individuals who allege that they contracted or were exposed to Coronavirus. The bill would shield those entities from lawsuits over COVID-19 exposure unless the person could prove the entity was acting with reckless or intentional misconduct.

The Senate swiftly approved the bill last week, and the House Judiciary committee approved it on Wednesday with the House voting 86 – 4 for final passage on Thursday.

HB 170 by Rep. Danny Garrett (R – Trussville) would ensure that federal stimulus funds derived from the CARES Act and subsequent coronavirus relief legislation are not subject to state income taxes. The bill also includes provisions from bills Garrett proposed last year that would decouple the state from the federal treatment of global intangible low-taxed income, adopt a single-sales-factor apportionment, and create a state and local taxes cap workaround.

The four Class I railroads in the state, which are members of the Alabama Railway Association, expressed concern that HB 170 may significantly increase their state tax liability. Christie Strategy Group worked with Alabama Revenue Commissioner Vernon Barnett to set up meetings with each railroad’s tax department to further discuss the impact of the legislation on railroads. Those conversations are ongoing, but we are hopeful that a resolution can be reached through the future rule-making process.

HB 192 would renew and improve job creation incentives found in the Alabama Jobs Act and Growing Alabama Act. The Alabama Jobs Act is a program that provides tax incentives to stimulate job creation and capital investment through two separate tax credits – the Jobs Credit and the Investment Credit. Both credits expired in 2020 and had been temporarily extended through Executive Order. This bill extends the credits until July 2023.

Small cell bill goes to the Governor

After multiple years of work and debate, a bill to help with the deployment of 5G small cell technology throughout the state went to the Governor for her signature. The bill creates a uniform application process, timeline, and fee structure for local governments to use when approving this type of technology in their cities and counties.

The bill was a priority for the wireless communication companies but was met with significant opposition in years past. After much deliberation and negotiation, all parties came to an agreement on language and the bill passed the House unanimously on Thursday. The Governor is expected to sign it.

Gaming and broadband bills debated in the Senate

Late Tuesday afternoon, Sen. Del Marsh (R – Anniston) filed his comprehensive gaming and broadband expansion bills. Both bills received favorable reports from the Senate Tourism Committee on Wednesday and were on the Senate floor on Thursday. Sen. Marsh said he would not seek a vote on either until they return after next week’s legislative break.

Debate on the gaming legislation centered on casino locations. The bill proposes establishing a state lottery as well as five casinos offering table games, sports betting, and slot machines. The casinos would be located at four existing dog tracks plus a fifth site in north Alabama that would be run by the Poarch Band of Creek Indians, the state’s only federally recognized Native American tribe. The proposal also would encourage the governor to negotiate with the Poarch Band for a compact involving their three other sites, which currently have electronic bingo machines.

Several legislators voiced concern that new casinos were not slated for their districts. Sen. Marsh indicated he is open to adding up to two additional casino locations to the legislation.

The proposal would have to be approved by a three-fifths majority of each chamber of the Alabama Legislature and then a majority of voters in a statewide vote.

The Legislative Services Agency estimated the lottery would generate $194-$279 million annually for college scholarships awarded on a mix of need, merit, and workforce needs in the state. The agency estimated the casinos would generate $260-$393 million annually from the 20% tax on gaming revenues as authorized by this amendment.

Money from gaming would be split between the newly established Alabama Gaming Commission, cities, counties, rural healthcare, mental health services, broadband expansion, and other issues to be appropriated in an independent supplemental bill.

SB 215, known as the Connect Alabama Act, creates the Alabama Digital Expansion Authority (ADEA), which would oversee funding to expand high-speed broadband and other digital expansion opportunities in the state. ADEA would also be charged with developing and administering a statewide connectivity plan and distributing broadband grant funds and other resources. The bill also creates the Alabama University Research Alliance (AURA) and the Alabama Digital Expansion Finance Corporation to issue debt to fund eligible projects.

The gaming legislation diverts 75% of revenue to the state General Fund for IT infrastructure. The first $1 billion of that money would go toward broadband expansion.

The Senate approved the budget isolation resolution, an administrative hurdle, on both bills, but Sen. Marsh carried both over for future consideration. He said he will be incorporating feedback he received this week and hopes to have both bills ready for a vote when they return the week of February 22.

Upcoming legislative schedule

The House of Representatives and Senate will reconvene on Tuesday, February 23, at 1:00 and 2:00 p.m., respectively. They are taking a scheduled break next week to review COVID protocols and ensure everything is running smoothly and safely.