Gov. Ivey Signs Historic ETF, General Fund Budgets

Gov. Kay Ivey signed the Education Trust Fund (ETF) and General Fund (GF) budgets Thursday, as well as a $2.8 billion ETF supplemental spending bill. 

“I am proud to officially put my signature on yet another historic investment in our students, teachers and schools,” Ivey said of the $8.8 billion ETF. “I have said it before, and I will say it again: Our students’ education is the single-most important issue facing our state, and Alabamians can rest assured that it will continue to be my top priority.”

Ivey cited investment in the state’s award-winning pre-K program, implementation of the Literacy and Numeracy Acts, a 2% teacher pay raise and investment in two- and four-year colleges. She also praised lawmakers for creating an additional savings account for the ETF and approving a scaled-back income tax rebate. 

“And thanks to the work of the Alabama Legislature, we continue making these wise investments while paying down debts, adding to our savings and returning the working people of Alabama’s money back to them through tax rebates,” she said.

As reported last week, funding for Alabama Farmers Federation priorities increased or remained level.

Ivey touted conservative budgeting as she signed the $3 billion GF.

“As I said in my State of the State address, we can be proud of the fact that during my time as governor, we have not once used the word proration, nor have we spent beyond our means. I am equally proud to announce today that, with my signature on the 2024 General Fund, that positive trend will continue.”

Federation External Affairs Department Director Brian Hardin thanked the governor and Legislature for their continue commitment to agriculture and forestry.

“Alabama was blessed with strong budget projections going into the 2024 fiscal year,” Hardin said. “We appreciate Gov. Ivey and the legislative leadership for investing in agriculture and forestry while working to increase savings and cut taxes. We especially want to thank ETF budget chairs Sen. Arthur Orr, R-Decatur, and Rep. Danny Garrett, R-Trussville, as well as GF budget chairs Sen. Greg Albritton, R-Atmore, and Rep. Rex Reynolds, R-Huntsville. With projected surpluses, they had a tremendous challenge in navigating competing priorities but, ultimately, crafted budgets which balanced investment, savings and tax cuts.”

Grocery, Overtime Tax Cuts, Rebates Pass Legislature

Historic budget surpluses gave lawmakers an opportunity to cut taxes, increase savings and return money to taxpayers. The Legislature granted final passage to bills reducing grocery and overtime taxes while approving a scaled-back income tax rebate and new Education Trust Fund (ETF) budget savings account.

HB 479 by Rep. Danny Garrett, R-Trussville, passed both chambers unanimously on Thursday after being amended in the Senate. The bill would reduce the state sales tax on food defined by the Supplemental Nutrition Assistance Program from 4% to 3% on Sept. 1, and then to 2% on Sept. 1, 2024, provided the ETF grows by 3.5% year over year.

Legislators were wary of the effect reducing the grocery tax would have on funding education initiatives in the ETF. A joint commission was also created to study the effects of eliminating the grocery tax. Alabama is one of 13 states to tax groceries.

Last week, lawmakers passed a bill awarding rebates to income tax filers. SB 86 by Sen. Arthur Orr, R-Decatur, would give Alabama residents who filed taxes in 2021 rebates of $150 for individuals and $300 for couples. The bill passed the Senate in a 27-4 vote and the House unanimously. Gov. Kay Ivey originally called for rebates of $400 for individuals and $800 for couples. Rebates are expected to be issued in November.

Legislation eliminating the state income tax on overtime pay for public and private employees also earned final passage in the Senate Thursday. HB 217, by Rep. Anthony Daniels, D-Huntsville, would not take effect until the next tax year but is seen as an incentive to increase the amount of overtime work conducted and give aid to hourly workers across the state. Income earned on work done past the 40-hour mark for full-time employees would not be taxable by the state. The bill would expire prior to the 2027 tax year, unless extended by the legislature. Rep. Daniels worked closely with House majority leadership to ensure the passage of the bill. 

Lawmakers also passed SB 101 by Sen. Arthur Orr, R-Decatur, to create the Educational Opportunities Reserve Fund as a savings account for future education initiatives based on the excess funds.

Overtime Tax Video from Leading Alabama

Economic Boycotting Bill Wins Final Passage

A bill protecting Alabama businesses from economic boycotting practices passed the House of Representatives Wednesday and heads to Gov. Kay Ivey’s desk for signing.

SB 261 by Sen. Dan Roberts, R-Mountain Brook, passed the House with a vote of 76-27, along party lines. Rep. Chip Brown, R- Hollingers Island, carried the bill in the House.

The bill would prohibit government entities from entering into public contracts with companies that engage in economic boycotting; prevent companies from being required to engage in economic boycotting by a government entity or being penalized for failing to do so; and require the state attorney general to fight federal laws that would compel or penalize residents or companies for activities based on economic boycotting criteria.

The legislation is anti-ESG (Environmental, Social, Governance) and protects Alabama companies from adopting or conforming to ESG standards. Various industries are protected by the bill including agriculture and timber.  

SB 261 passed the Senate several weeks ago with the vote also along party lines. Last week, the bill was reported favorably by the House Financial Services Committee. 

Some ESG-scoring criteria are contrary to Alabama Farmers Federation policy. 

Driver's License Bill Awaits Governor's Signature

Alabama farmers who rely on migrant work received a victory in the Legislature this week. HB 432 by Van Smith, R-Billingsley, passed the Senate Thursday. It now goes to the governor’s desk for her signature.

The bill would reduce the minimum time an Alabama driver’s license could be issued from 160 days to 30 days. It would allow guest workers who are delayed entering the U.S. the opportunity to receive a license vital to their work. The need for such legislation surfaced during COVID-19 when many migrants were delayed from entering the U.S. on time.

Alabama farmers who represent a variety of agricultural boards, committees and commodities gathered in Montgomery Feb. 17 for Ag Labor Summit to review existing policies and discuss potential alternatives for the ag workforce. The Alabama Farmers Federation was informed of the driver’s license problem during the summit.

Federation External Affairs Director Brian Hardin discussed the importance of bills being created at the grassroots level.

“When our members find problems with laws affecting agriculture in Alabama, it’s our responsibility to work with them to get it fixed,” Hardin said. “We’re thankful for their input and the strength of our grassroots members."

Hardin also praised Rep. Smith and Sen. Billy Beasley, D- Clayton, who sponsored a companion bill in the Senate, for their hard work and dedication to farmers and guest workers. 

Bills in Brief

Preceptor Tax Incentive Program - HB 133 by Rep. Neil Rafferty, D-Birmingham, would give tax credits to certain medical instructors located at health clinics throughout the state. The Preceptor Tax Incentive Program is designed to give physicians, dentists, optometrists, physician’s assistants, nurse practitioners, nurse midwives and nurse anesthetist who work in clinics not owned or operated by qualified nursing, medical or osteopathic schools state income tax credit incentives for instructing students in these respective fields. Preceptors (instructors) would receive either $425 or $500 tax credits per rotation, dependent on the type of preceptor, with caps of $5,100 and $6,000 respectively. It is estimated this would decrease tax funds to the Education Trust Fund by $780,000. This bill would also place more responsibility on the Alabama Statewide Area Health Education Center (AHEC) Program at the University of Alabama-Birmingham to administer the program. It was originally stated this bill would provide tax credits for preceptors in rural and underserved areas, but the text of the bill does not contain these requirements. The Senate passed the bill unanimously on Thursday. It now awaits Gov. Ivey's signature.

Rural Logging Support Act - SB 76 by Sen. Will Barfoot, R-Montgomery, establishing the Rural Logging Efficiency Act of 2023 passed the House unanimously Wednesday. The bill previously passed the Senate and now goes to Gov. Kay Ivey for signature. The legislation would designate the 15% of proceeds from state license tax now going into the General Fund for investment related to the forest products industry. This bill would direct a portion of the funds to the Alabama Forestry Commission for grants to support logging workforce development, research and implementation of technologies to promote forest product harvesting and transportation efficiency. The remainder would go to counties for maintaining and constructing rural bridges.

The Legislature will reconvene on Tuesday, June 6, for the final legislative day. 

The House and Senate will both convene at 1:30 p.m.

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