Sunset bills and legislation impacting pharmacy benefit managers were approved by the Senate last week, and a four-bill tax cut package passed the House. 

Governor Kay Ivey signed REALTOR® supported HB 230 into law on Wednesday. 

The new law, Act 2025-59, goes into effect on April 18, so to help our members prepare and adjust practices, AAR Public Policy Chair Mary Jane Owen provided valuable information and guidance, which may be read HERE.

In general, the law reaffirms Alabama's existing Real Estate Consumers Agency and Disclosure Act (RECAD) framework, emphasizes early discussions of brokerage services and compensation, and protects consumers from premature binding contracts. 

It also clarifies that consumers in Alabama cannot be required to sign a binding contract simply to view a property, but the bill does not require an agent to show a property to a buyer without an agreement. Under its provisions a written buyer agreement will be required before an offer to purchase is submitted, which ensures clear terms of representation. This balanced approach urged by AAR aims to provide greater transparency and consistency for both real estate professionals and consumers.

Supported by the Alabama REALTORS®, House Bill 474 , which strengthens the Squatter Removal Law passed last year, was filed by Rep. Craig Lipscomb (R-Gadsden).

As we discussed in 2024, squatters have no rights to property and should not be treated as if they did. If law enforcement is unwilling to remove a squatter from property after an emergency call, property owners should not have to go to court to remove the trespasser. 

To combat this injustice, the 2024 law created a squatter removal process to make it easier and cheaper for owners or agents to remove squatters trespassing in houses. The law allows homeowners to file an affidavit with county or municipal law enforcement when a squatter enters or remains in a dwelling without the owner’s permission. 

HB 474 strengthens the 2024 law by setting a timeline for removal by law enforcement, clarifying that municipal law enforcement has jurisdiction within city limits, expanding the process to include any building and real property, prohibiting law enforcement from turning away a property owner with a completed affidavit, and requiring law enforcement agencies to have a clear process for handling squatter removal affidavits, among other things.  

More than 60 House members have co-sponsored the bill.

Four bills providing tax cuts passed out of the House last week. Sponsored by House Ways & Means Education Chairman Rep. Danny Garrett (R-Trussville), the bills lower state taxes on groceries, retirement income, and state income taxes. 

• HB 386 would decrease the state’s portion of the sales tax on food from 3% to 2%, effective September 1, 2025.
• HB 387 would give local governments more flexibility in decreasing their food tax rates, allowing these governments to make more substantial cuts without growth targets.
• HB 388 would double the $6,000 exemption for retirement income to $12,000, benefiting retirees who primarily rely on defined retirement plans, like 401(k)s and IRAs.
• HB 389 increases the income floor for the standard deduction and expands the income threshold for the maximum dependent exemption. 

The bills now go to the Senate for consideration. 

for municipalities seeking to adopt a new or increased tax or license fee. Specifically, the bill requires municipalities to introduce the tax or fee at a council meeting, provide a 30-day notice before holding a public hearing on the item, and then voting on the tax or fee at a subsequent meeting. This process is meant to ensure the public and small businesses who will pay the tax or license fee have a full opportunity to be heard on the item. Currently, public notice or hearings are not required for a city council to consider new or increased taxes or license fees, although cities can provide notice.

SB 249 is co-sponsored by Sens. Arthur Orr (R-Decatur) and Tim Melson (R-Florence).

• Alfa Health Plan Bill Filed – House and Senate companion bills were filed last week allowing the Alfa Farmers Federation to offer a health insurance option to its members. According to supporters, the program would decrease costs for farmers and other Federation members and is based on similar programs in ten other states. 
• Pharmacy Legislation Passes Senate – A compromise bill on pharmacy benefit managers (PBMs) was both filed in and passed by the Senate last week. PBMs work for health insurance companies by negotiating prescription reimbursement rates with pharmacists. For some prescriptions, the reimbursement rate falls below the actual cost of acquiring the drugs, which has forced some small independent pharmacies to close. The bill sets a minimum $10.64 dispensing fee per prescription, which would be paid by the health insurance company and not at the counter by the consumer. Bill opponents, including the Business Council of Alabama, argue that the bill will increase insurance costs for businesses and individuals. The bill now goes to the House. 
• Overtime Tax Bill Filed – Rep. Anthony Daniels (D-Huntsville) filed a bill extending the state income tax exemption for overtime that was enacted last year. Originally estimated to cost the state less than $40 million, the actual cost to the Education Trust Fund budget will exceed $200 million. Rep. Daniels argues that the exemption, set to expire this year due to an automatic sunset provision, should be renewed because the ancillary benefits bring more to the state than the cost.
• Sales Tax Cut on Baby/Maternity Products Passes House – Another sales tax cut passed the House last week. HB 152 would exempt baby formula and diapers, maternity clothes, and menstrual hygiene products from the state’s 4% sales tax. The bill awaits Senate consideration.

Lawmakers are on their traditional spring break this week and will reconvene as usual next Tuesday, April 1, with 14 legislative days remaining. The Senate still has several sunset bills to take up, as well as the tax cuts package that passed the House last week. Neither budget the General Fund nor the Education Trust Fund budgets have passed out of committee yet, so those are expected to start moving soon.