Twelve legislative days remain this session after the state legislature adjourned last Thursday. Legislators continue to meet in Montgomery for the 2023 regular legislative session and have about six weeks to pass Governor Ivey’s budget bills for fiscal year 2024. The budgets are moving, and hot topics from the week include tax cuts and rebates, partisan bills, and school choice efforts. We cannot fail to mention that the REALTOR®-backed SB 228, dealing with wholesaling and 40-year right to list agreements, passed the Alabama Legislature today and will move to Governor Ivey’s desk for signature into law. Continue reading for a summary of SB 228 and highlights of week 9. 

Last week, both of the Governor’s budget bills, the education budget and the General Fund budget, passed out of their chambers of origin. As a reminder, the education budget funds the state’s education system, including pre-K, K-12, and higher education, among many other items through the Education Trust Fund. The 2024 education budget appropriates a record $8.8 billion in spending, including $5.9 billion to K-12, $2.4 billion to higher education, and a 2% raise for K-12 and community college teachers. 

Due to higher revenues, both budgets also have supplemental bills for FY 2023, the current fiscal year. The 2024 education budget along with its 2023 supplemental budget passed the Senate last Thursday. The supplemental budget includes $30 million set aside for “distressed” colleges (i.e., Birmingham Southern) and a tax rebate of $105 per tax filer. 

The General Fund budget funds the rest of state government. The 2024 budget of over $3 billion passed the House two weeks ago, as did the accompanying 2023 supplemental budget.

Both bills now go to the next chamber for consideration in a committee, which may be as early as next week.

The Alabama REALTORS® public policy team worked with the Alabama Homebuilders Association and bill sponsor, Rep. Mack Butler (R-Gadsden), to amend HB 302, a bill that would enhance the licensure requirements and penalties for electrical contractors. As drafted, the bill would eliminate an owner exemption which allows owners of property to perform routine maintenance on his or her property. An amendment exempting property managers, and their part-time or contract employees, from having an electrical contractor’s license in certain settings was successfully added to a bill last week. The amendment allows property managers to provide basic electrical work, like changing light fixtures and switches, and allows licensed plumbers and HVAC contractors to connect appliances or equipment when working under their respective licenses. The amended bill passed through House committee last week and can now be considered by the full House. 

REALTOR®-backed SB 228 received final passage in the House today, May 9, after receiving a favorable report by a House committee last week. Sponsored by Sen. Dan Roberts (R-Birmingham) and carried by Rep. Joe Lovvorn (R-Auburn) in the House, the bill addresses two important issues that are unfair to homeowners in Alabama. The first addresses long-term right to list agreements, where companies are offering incentives to homeowners in return for a 40-year listing agreement on a home. The listing agreements are then recorded as liens against the property. Under the bill, any agreement to list a home that is recorded, or purports to run with the land or create a lien, cannot exceed one year. The bill provides punitive damages for violations. The second issue addresses the wholesaling of residential property and requires disclosure to the seller and prospective buyers by a wholesaler and provides penalties for violations. This does not prevent the parties from agreeing otherwise but provides protections to unsuspecting homeowners and homebuyers. Commercial and other property types are excluded from the legislation. SB 228 is a huge win for Alabama's homeowners and real estate industry!

The Alabama REALTORS® public policy team has been engaged all year on a property tax sale bill, which now appears likely to be carried over to next year. The bill, HB 190, would have made significant changes to Alabama’s tax sale statutes dealing with the sale of property for failure to pay taxes. While the bill aims to clarify some issues with the tax sale statutes, including provisions dealing with an Alabama Court of Civil Appeals decision, the bill overprotects tax sale purchasers over property owners, and exacerbates an already problematic process. Alabama REALTORS®, along with the Alabama County Commission Association, requested amendments to the bill to provide a more fair and transparent process on tax sales and redemptions that ends the predatory practice of overbidding and excessive interest which unnecessarily drives up the redemption cost for property owners. However, negotiations over the bill seemed to have reached an impasse, and the bill will likely be carried over for the year. The state is moving away from the tax sale process, with more and more county tax officials moving to tax liens as a better process. Tax liens are certainly more friendly to property owners. 

A fantastic bill that aims to spur economic development in so-call brownfields passed out of a House committee last week. HB 378, sponsored by Rep. Chip Brown (R-Hollinger’s Island), deals with so-called brownfields, or previously used industrial sites, and attempts to make them more attractive and usable for future development. The bill would expand liability limitation provisions to parties potentially responsible for contamination if voluntarily participating in a clean-up program, create a brownfield remediation reserve fund for remediation of brownfields, and create brownfield redevelopment districts to encourage reuse of the properties. The bill is up for consideration in the House chamber today. 

The Legislature reconvened today with the House and Senate meeting at 1 and 2:30 pm respectively. We anticipate that the Legislature will use two legislative days this week, today and Thursday, and use Wednesday as a committee day. Since the budgets are moving, the Legislature continues to position itself to adjourn a few weeks early, with June 4^th being the anticipated last week. 

Stay tuned for more highlights in Capitol News and Notes next week!