Week 12 was a marathon of a week for the legislature. Late nights, even into the am hours on Friday, allowed the legislature to pass important bills including both budgets and supplemental bills. Due to the early morning, four legislative days were used, leaving only three remaining. Besides the budgets, several other bills of note moved this week. Read on for highlights from week 12 of the 2023 regular legislative session. 

The legislature worked long hours this week, with each chamber working late on different days. Some of the long hours were due to normal partisan politics, but Thursday was grueling as the legislature decided to continue meeting until the budgets were passed. Those bills passed late Thursday and early Friday morning.

The two 2024 budgets include record appropriations – $8.8 billion in the education (ETF) budget and $3 billion General Fund budgets. By way of comparison, just ten years ago the state had stagnant tax receipts, and the FY 2016 ETF budget was just under $6 billion, and the General Fund budget was $1.75 billion. This year, the approved budgets include raises for teachers and state employees, a few one-time expenditures on special projects and overall increased funding over last year.

Most of the debate was over surplus funds in the supplemental bills, where the tax rebate and special projects were funded. As a refresher, the supplementals are bills to appropriate extra funds, which occurs when actual tax receipts are higher than the projected amounts, since budgets are approved in advance. For example, during the 2022 legislative session, the legislature’s ETF bill for 2023 was based on tax receipt projections to the ETF for 2023. Those projections ended up being short $2.8 billion from actual receipts, which gives the legislature the opportunity to appropriate the extra $2.8 billion. With those additional funds, the approved ETF supplemental included a tax rebate of $150 for 2021 tax filers ($300 for joint filers), $179 million to a K-12 capital grant fund for school construction projects, $354 million to an educational opportunities reserve fund (special education savings account), and $30 million for distressed colleges (i.e., Birmingham-Southern), to name a few.

The General Fund supplemental bill was much smaller at around $207 million. With these funds, the legislature put $50 million in a savings account, $40 million to pay off four state bonds early, $18 million to finish the Taylor Hardin mental health project in Tuscaloosa, $5 million to Mobile’s new airport, $20 million to the State Port authority, and $5 million for Montgomery’s Maxwell Gateway project, among other projects.

The budget and supplemental bills are now with the governor for her review. In Alabama, the Governor has the authority to line-item veto appropriation bills, which means that she can veto certain portions of the budget bills, leaving the remainder intact. For all other bills, the governor only has the authority to veto the entirety of a bill, allow to become law without the governor’s signature, or sign and deliver the bill to the Alabama Secretary of State.

A grocery sales tax bill unanimously passed the House yesterday. HB 479, sponsored by Rep. Danny Garrett (R-Trussville), would reduce the state tax on food by 1% a year, down to 2%, as long as tax receipts are sufficient to offset the revenue loss. While a reduction on the sales tax on groceries has been discussed for years, the high tax receipts over the past two years seems to have increased momentum behind the idea. The bill does not reduce local sales taxes on groceries but allows local governments to decrease the sales tax on food. The bill also prohibits local governments from increasing sales taxes on groceries above the current amount. HB 479 now goes to the Senate with a narrow window to pass, although all senators have co-sponsored similar legislation.

A bill focused on relieving some of the stress on backlogged courts passed the legislature last week. SB 39, sponsored by Sen. Sam Givhan (R-Huntsville), adds circuit and district judgeships in several areas of the state, focused on areas that have seen high population increases recently. Backlogs in court systems create hurdles for Alabamians by causing costly delays in the adjudication of cases, which can be extremely lengthy in some parts of the state. This is especially true in areas where population increases have resulted in increasing caseloads. The bill aims to relieve the congestion by creating eight additional circuit judgeships in the Sixth, Eleventh, Nineteenth, Twenty-third, Twenty-eighth, and Thirty-seventh Judicial Circuits, as well as five additional district judgeships in Baldwin County, DeKalb County, Mobile County Shelby County and Madison County. The election of the new judgeships would be split between the 2024 and 2026 General Elections.

Additional judgeships have been a divisive topic in the past as tighter budgets would have required judgeships to be taken from another district. This year’s bill is a compromise as allowed by and appropriated in large budgets. The bill is now with the governor for her review.

HB 491, a bill setting homeowner-friendly timeframes on property tax valuations, passed the Alabama House of Representatives last week. Sponsored by Rep. David Faulkner (R-Birmingham), the bill sets July 1 as the deadline for tax officials to mail out revised valuation notices, or notices that an owner’s property valuation has changed for property tax purposes. Also, the bill provides additional time to pay the property taxes when a valuation is appealed and the decision by the local Board of Equalization is pending. Alabama REALTORS® supports HB 491 as providing common sense timelines for the property tax valuation process and protecting the rights of property owners. HB 491 is on the agenda in a House committee this week but has a narrow window to pass the legislature with limited time remaining.

SB 32, sponsored by Sen. Sam Givhan (R-Huntsville), on notary publics passed the Senate last week. With a substantial substitute bill adopted on the Senate floor, the bill provides increased oversight for the appointment of notary publics. In general, the bill sets parameters on who can serve as a notary public, adds a training component for new and existing notary publics, increases the fee a notary public has to pay the probate judge and the fee a notary public is allowed to charge for notarial acts, and creates specific crimes for bad actors. The bill is on a House committee agenda this week and has a narrow but possible window to become law

With three meeting days remaining, the legislature took today off due to the holiday yesterday, will reconvene tomorrow, May 31, and will meet again on Thursday. This would leave one final day which has yet to be determined. The legislature could adjourn sine die as early as Thursday or Friday or wait until next week in order to minimize pocket vetoes. Under the Alabama Constitution, the governor has ten days to sign and deposit with the Secretary of State any bills passed within five days of final adjournment (i.e. sine die) or the bills are considered pocket vetoed (i.e., they do not become law). By waiting a few days to adjourn sine die, the legislature can avoid the number of bills that fall within the five-day window. So, stay tuned next week for either the final weekly update or session recap from the 2023 regular legislative session.