Legislative Report – May 11, 2020

Volume 21 Number 7 – May 11, 2020

15th – 20th legislative days

Legislature adjourns, but not sine die

After an extended absence due to COVID-19 and a statewide “Stay at Home” order, the House and Senate reconvened on Monday, May 4, to finish out the 2020 regular legislative session. The State House was closed to the public, and despite a push by the Senate to pass coronavirus liability legislation among various other bills, legislative leadership eventually agreed to only pass budgets, a school bond bill, and local bills.

The week began with the Senate approving a bill to authorize a $1.25 billion bond issue to fund school construction and other capital improvement projects. The funding distribution is based on existing formulas and would allocate about $912 million to K-12 schools, $218 million to state colleges and universities, and $120 million to community colleges.

The last bond issue for school construction was approved 12 years ago. Part of the current bond proposal would retire approximately $67 million from the last bond issue and replace it with money borrowed at a lower interest rate.

The House approved the bill quickly in committee on Tuesday, and it received final passage and was forwarded to the Governor on Thursday.

General Fund budget

The General Fund budget was sent to the Governor for review on Thursday. The budget is less than Gov. Ivey requested at the beginning of the session, before the coronavirus pandemic hit, but still about $168 million more than the previous year.

The budget does not include the previously proposed 2% state employee pay raise, but it maintains a $94.4 million (13%) increase for Medicaid. The budget also increases state funding for the Alabama Department of Public Health by $35.5 million, or nearly 50%. Most of the money will go toward paying an increased state share of the federal Children’s Health Insurance Program (CHIP), which provides a sliding scale of health insurance to children living in households making up to 312% of the poverty level ($67,766 a year for a household of 3). Mental Health will get an increase of $26 million, and Corrections will get an increase of $21 million.

The budget also includes $200 million in CARES Act funding designated for the Governor’s office. On Thursday, a simmering fight between Ivey and lawmakers over control of the funds boiled over when Ivey, in a terse statement, ceded control of the money to lawmakers.

“I just got off the phone with House General Fund Chairman Steve Clouse (R – Ozark) and expressed to him my desire for the Legislature to have full control of the CARES Act appropriation, every single penny,” Ivey said.

In her statement, Ivey referred to a “wish list” from lawmakers for the federal money that included $200 million for a new State House, $800 million for broadband expansion, $100 million for state prisons, and several other requests.

On Friday, Rep. Clouse indicated that the Governor may veto the budget over the CARES Act funding. The state constitution allows the Governor to veto a bill outright or send it back to the Legislature with certain amendments for lawmakers to consider. However, only simple majority votes of both chambers are needed to override the Governor’s veto.

Both the House and Senate plan to return to Montgomery on May 18 to override the Governor’s veto, if needed.

Education Trust Fund budget

Despite a projected loss in revenue due to the coronavirus pandemic, the legislature passed the largest Education Trust Fund budget in history over the weekend. The $7.2 billion budget was sent to the Governor on Saturday.

The originally proposed budget from the Governor included an approximate $411 million increase over last year, but the budget approved by the legislature was pared down to a $90 million increase.

K-12 schools received an increase of $73 million over this year. Community colleges got an increase of $11 million. That includes a $4 million increase for programs offering dual enrollment for high school students and a $1 million increase for prison education. Universities and colleges got an overall increase of $38 million, with each four-year institution receiving at least 2% more than this year.

The budget did not include a previously proposed pay raise for teachers.

Coronavirus liability protections

On Friday, Governor Kay Ivey issued a Gubernatorial Proclamation providing liability protection for health care providers, businesses, non-profits and other organizations from punitive damage claims relating to the coronavirus.

The foundation for the proclamation lies in the emergency powers granted to the Governor during a state of emergency. The protections will last only until the current state of emergency is concluded.

The proclamation follows closely legislation introduced by Sen. Arthur Orr (R – Decatur) to provide permanent protection to businesses and other groups from litigation as they attempt to respond to the many challenges presented by the coronavirus pandemic.

Specifically, the proclamation provides civil immunity for “covered activities” by “covered entities” operating in Alabama from certain claims and damages relating to COVID-19, including claims that someone contracted or was exposed to COVID-19 on the premises of a business, or due to the operations or services provided by the business, or due to the provision of health care services or treatment provided by doctors, hospitals or nursing homes.

Exceptions to this immunity exist only if the covered entity acted with wanton, reckless, willful or intentional misconduct and such misconduct must be proven under a “clear and convincing” evidentiary standard. Cases that do not involve death or “serious physical injury” are limited to recovering actual out-of-pocket economic damages. Punitive damages cannot generally be recovered.

It is anticipated that overall coronavirus immunity legislation will be considered during a special legislative session to come later this summer or early fall.

Upcoming legislative schedule

The House and Senate will reconvene on Monday, May 18, at 1:00 p.m. They are expected to take up any local bills that still need to be considered and address a potential veto or Executive amendment to the General Fund budget.

Monday marks the final day of the 2020 legislative session, and they will adjourn sine die. They are expected to reconvene for one or more special sessions in late summer or early fall. The Governor must issue the call of a special session.