The pace in Montgomery appeared to slow slightly as the Legislature worked through its fifth week of the 2016 Regular Session. The House and Senate were in session on Tuesday and Thursday and spent all day Wednesday in committee meetings. The education budget moved from the House committee and onto the floor, where the budget is likely to be taken up and sent to the Senate next Tuesday. Meanwhile, the General Fund budget, which has already passed the Senate, is scheduled for a public hearing in its House committee on Wednesday. As in most years, the budgets are likely to be worked out in a six person conference committee after they pass both houses in different forms. Nevertheless, the Legislature seems determined to take care of their constitutional responsibility to pass budgets sooner rather than later this year.

Education Budget

On Wednesday the House Committee on Ways and Means Education, chaired by Representative Bill Poole (R–Tuscaloosa), addressed the Education Trust Fund budget in a public hearing. Unlike the General Fund, expected revenues in the Education Trust Fund this year exceed last year’s revenues by more than $300 million. Because of that, the House committee approved a 4% pay raise for all education employees earning $75,000 or less. Those making more than that would receive a 2% raise. All post-secondary employees would receive the 4% increase. Unlike in some prior years, the budget also fully funds any increase in education employee insurance payments. Pre-kindergarten programs, which are a priority of Governor Robert Bentley, would receive an additional $14 million over last year’s budget. The overall education budget reported by the committee is $6.3 billion, dwarfing the $1.8 billion General Fund budget passed by the Senate last week. The House is expected to take up the education budget on Tuesday of next week.

Prison Construction Initiative

The House Committee on Ways and Means General Fund held a public hearing on the Governor’s plan to build four new megaprisons in Alabama in order to address the problem with overcrowding. Under the Governor’s proposal, the State would close 13 of its existing facilities, including Tutwiler Prison for Women. The cost of constructing the new prisons would be covered by an estimated $800 million bond issue. According to the Governor, the bonds could be paid for simply out of the savings realized by replacing the out of date prisons with modern ones. In a somewhat unusual move, Committee Chairman Steve Clouse (R–Ozark), the bill’s sponsor, indicated that there will be a second public hearing on the bill before calling for a vote. Alabama’s prison system has been threatened with lawsuits and even the possibility of federal intervention for several years due to overcrowding concerns.

Incentives Legislation

Alabama Renewal Act

HB34, known as the Alabama Renewal Act, was reported from a Senate committee on Wednesday and now stands just one step from final passage. The bill would create a commission—known as the Renewal of Alabama Commission—which would have the authority to approve tax credits for businesses that use the state’s ports. The bill would also allow for tax credits for contributions to economic development projects that include the acquisition of property and the development of needed infrastructure. Representative Mac McCutcheon (R–Capshaw) has sponsored the bill.

Small Business Jobs Act

The Senate Committee on Fiscal Responsibility and Economic Development reported HB36, the Small Business Jobs Act sponsored by Representative Kyle South (R–Fayette), on Tuesday. The bill would provide a $1,500 tax credit for businesses with fewer than 75 employees that hire a new worker at a salary of at least $40,000. The bill is part of the House Republican Caucus’s “Right for Alabama” agenda.

Apprenticeships Tax Credit

The House Committee on Ways and Means Education approved an apprenticeship tax credit bill, sponsored by Senator Arthur Orr (R–Decatur), on Wednesday. The bill, SB90, would provide a $1,000 tax credit to employers for each apprentice hired. The legislation is now one step from final approval, and can be taken up by the House at any time.

Right to Work Constitutional Amendment

The Senate Committee on Fiscal Responsibility and Economic Development also favorably reported HB37, sponsored by Representative Arnold Mooney (R–Helena). While Alabama is currently a right to work state by statute, HB37 proposes a constitutional amendment that would declare Alabama a Right to Work state. If approved by a three-fifths majority of the Senate, the legislation would require ratification by the state’s citizens in a referendum at the next general election.

Other Items of Note

Gas Tax Legislation

Senator Gerald Dial’s legislation to allocate a new gas tax was approved by a vote of 25-4 in the Senate on Thursday. The bill is a precursor to an expected effort to increase the state’s gas tax for the first time since 1992. Legislation proposing the tax itself is expected to be introduced by Representative McCutcheon in the coming weeks.

Fantasy Sports

A second attempt to pass a bill that would clarify the legal status of fantasy sports games in Alabama was turned back in the House on Thursday. The bill, HB56, sponsored by Representative Connie Rowe (R–Jasper), would regulate the popular online games and require operators to register with the state’s Attorney General.

Alcohol Restructuring

On Tuesday, the House passed a bill to allow breweries in Alabama to sell up to 288 ounces of beer per day per customer for off-premises consumption. The bill, HB176, sponsored by Representative Anthony Daniels (D–Huntsville) is part of a package of three bills recommended by the Alcohol Beverage Study Commission. The other two bills—one to allow wineries to open an offsite tasting room, sponsored by Representative David Faulkner (R–Mountain Brook), and another to allow the direct sale of liquor to consumers by Alabama distilleries, sponsored by Rep. Alan Boothe (R–Troy)—are pending in the House and can be addressed by the body at any time. Each of these bills has a Senate companion that is also making its way through the process.

Teacher Tenure

On Tuesday, Senate President Pro Tem Del Marsh (R–Anniston) introduced his much discussed bill to reform teacher pay and tenure. The bill, SB316, would increase the time it takes for teachers to achieve tenure status from three to five years. It would also create an evaluation system for teachers with five performance levels. Poor ratings in two consecutive years could result in the loss of tenure. The bill provides for rewards for high achieving schools, and incentives to attract teachers to schools facing teacher shortages. The bill, referred to as the Preparing and Rewarding Educational Professionals (or “PREP”) Act, is likely to come up before the Senate Committee on Education and Youth Affairs in the next week or two.

The House of Representatives is scheduled to convene at 1:00 PM on Tuesday. The Senate will convene at 2:00 PM on the same day. The Legislature has met for 12 of its permitted 30 legislative days. It is expected to meet for two days next week, meaning that it will be just one day shy of halfway through the session.

For additional information contact Ted Hosp or Edward O'Neal.