The 2018 Regular Session of the Alabama Legislature is rapidly drawing to a close. This week saw both budgets advance to within a single vote of final passage. Since passing the budgets is the only constitutional requirement for a Regular Session—and with many in the State House expecting the session to end no later than March 29th—their passage will likely prompt a downhill dash toward adjournment sine die. With perhaps as few as five or six session days left this year, the window for passing any newly introduced legislation is nearly closed. With so little time left, the relative harmony that has characterized this session is beginning to show signs of strain. Even the Senate, which has functioned extraordinarily well this year, faced two long days of votes this week as well as several brief filibusters. As tempers begin to fray and highly controversial bills that have been delayed come up for debate, many expect late nights in the two weeks ahead.

Budgets Close to Final Passage

General Fund Budget Passes House on Tuesday

The House passed the General Fund budget, which allocates all of the State’s non-education spending for next fiscal year, in only ten minutes on Tuesday by a vote of 98–1. The budget, which originated in the Senate this year, is the largest in a decade at $2.03 billion and exceeds this year’s by roughly $166 million. The single greatest beneficiary of the increase will be the Department of Corrections, which will receive an additional $54 million next year. The additional funds will help fund the hiring of new Corrections personnel and improvements to mental healthcare for inmates. The Department is currently in the remedy phase—with liability already having been found—of a lawsuit in federal court over the quality of mental healthcare provided to inmates. Other significant increases included an additional $8.9 million for the Department of Mental Health, $3.1 million for the Department of Human Resources, and $2.4 million for the Department of Public Health. Because of minor tweaks made to the budget in the House, it will have to go back to the Senate for either a concurrence or a vote to send the budget to a conference committee where a compromise can be worked out.

The House also passed several other budget-related bills on Tuesday, including SB185, sponsored by Senator Clyde Chambliss (R–Prattville), which gives state employees and some county employees a 3 percent pay increase, and SB 215, sponsored by Senator Gerald Dial (R–Lineville), which authorizes a one-time bonus for state retirees equal to $1 for each month employed. Both bills have now been sent to the Governor for her signature.

Education Trust Fund Passes Senate on Thursday

After a nearly two-hour committee meeting on Tuesday during which the Education Trust Fund (“ETF”) budget was worked through in great detail, the Senate took the budget up on Thursday. The Senate passed the ETF budget, which allocates all of the State’s education spending for the next fiscal year, after several hours of debate and several amendments by a vote of 29–0. The budget, which originated in the House this year, is the largest in a decade at $6.6 billion and exceeds this year’s by roughly $216 million. The budget includes significant increases to various programs, including an additional $18.5 million for Alabama’s highly regarded Pre-K program, and $4 million for the Alabama Reading Initiative. Like the General Fund budget, the ETF budget will have to go back to its chamber of origin for a vote to concur or to send it to a conference committee.

The Senate also passed several other budget-related bills on Thursday, including HB174, sponsored by Representative Bill Poole (R–Tuscaloosa), which gives state education employees a 2.5% raise, and HB180, also sponsored by Representative Poole, which appropriated an additional $4 million for the Department of Veterans Affairs for this year.

Rural Broadband Bill Clears Committee

SB149, sponsored by Senator Clay Scofield (R–Guntersville), passed out of the House Committee on Ways and Means Education Wednesday after being substituted. The substituted bill seeks to accelerate private investment in rural broadband by creating a fund from which the Alabama Department of Economic and Community Affairs may issue grants to broadband providers making investments in either unincorporated areas of the state with fewer than 25,000 residents or other areas of the state that are currently unserved by broadband providers. Under the proposed law, the grants could not exceed either $750,000 or 20% of the overall cost of the investment, whichever is less. Proponents of the bill liken bringing broadband to rural parts of the state to the efforts made to electrify those areas in the 20th century. The total amount of grants issued in a single year could not exceed $10 million.

Senate Committee Favorably Reports SSUT Bill

The Senate Committee on Finance and Taxation General Fund amended and favorably reported HB470, sponsored by Representative Rod Scott (D–Fairfield), on Wednesday. The bill would amend the existing Simplified Sellers Use Tax program, which passed the Legislature in 2015 and currently allows for online sellers to lock in a lower sales tax of 8% if they opt in. Several versions of a fix for the current law have been introduced this session, prompted by Amazon’s acquisition of Whole Foods last year, which triggered a review of whether the online retailer could continue to pay the flat 8% tax. HB470 would keep the SSUT rate at 8% for sellers, but would extend the application of the program to so-called “marketplace” transactions, thus including sales by third parties on websites like Amazon. For these sales now captured by the law, revenues would be split 60%-40% between cities and counties respectively.

Economic Development Bill Carried Over

The Senate Committee on Fiscal Responsibility and Economic Development held a public hearing, but did not vote, on a bill that would clarify that economic development officials are not lobbyists on Wednesday. HB317, sponsored by Representative Ken Johnson (R–Moulton), addresses a concern raised in recent years that individuals hired to negotiate economic development packages as part of efforts to recruit business investment to the state might arguably be engaged in lobbying activities. The bill caused considerable debate in the House last week, and the public hearing brought several high profile officials to the State House to testify, including Commerce Secretary Greg Canfield, who described the bill as critical to the State’s economic development efforts, and Chair of the Ethics Commission Jerry Fielding, who testified that four out five of the State’s Ethics Commissioners support the bill. Senator Del Marsh, who is carrying the bill in the Senate, asked that the committee not vote on the bill for one week so that he would have time to address some final concerns.

Incentive to Hire Veterans Passes

The Governor signed HB83, sponsored by Representative Connie Rowe (R–Jasper), into law on Monday. The new law raises the tax credit for businesses that hire unemployed veterans from $1000 to $2000 as well as extends the credit to businesses that hire combat veterans, even if they are not unemployed at the time of hiring. The law is part of a package of legislation focused on helping veterans that the Legislature took up this year.

Day Care Regulation Bill Receives Final Passage

On Thursday, the Senate passed a bill that would increase regulation of daycares affiliated with religious organizations in Alabama by a vote of 22–4. Under current Alabama law, any daycare that is affiliated with a church or religious nonprofit school is exempt from licensure and regulation by the state’s Department of Human Resources (“DHR”). Considerable media attention focused on the mistreatment of children at some daycares that avoided licensure and regulation by claiming such an affiliation have prompted efforts in the Legislature to eliminate or modify the exemption. HB76, sponsored by Representative Pebblin Warren (D–Tuskegee), would not require that all daycares be licensed and regulated. Instead, the bill would only require that daycares that are currently exempted to post a notice to that effect and to forward annually all records of health and fire inspections as well as the names and criminal background checks of all employees to DHR. Furthermore, the bill would empower DHR to inspect any exempted facility if there is reason to suspect a threat to child safety or if the facility has not supplied the required documentation. The bill now only awaits the Governor’s signature.

Conclusion

The Legislature has used 20 of its available 30 meeting days for the 2018 Regular Session. The House will reconvene on Tuesday, March 20th at 2:00 p.m. The Senate will reconvene on the same day at the same time. Next week is anticipated to be a two legislative day week, with Wednesday reserved for committee meetings. However, because of leadership’s desire to end the session by March 29th, it is possible that an extra legislative day may be used next week to help pass priority bills.

If you have any questions or would like to reach out for more information, please contact Edward A. "Ted" Hosp or Edward A. O'Neal. To read more about Maynard's Governmental and Regulatory Affairs Practice, please click here.

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