2019 Legislative Wrap-Up
From 2019 Public Policy Chair, Morgan Ashurst
June 4, 2019
The Alabama Legislature has just adjourned sine die for the 2019 legislative session, and I am so proud of the work done by the Public Policy Committee during one of the busiest legislative sessions in recent memory. The Public Policy Committee is comprised of members such as yourself, who work hard each week to review all bills that are filed and provide updates to the Association throughout the year.
It has been an honor to serve as chair of the Public Policy Committee this year, and I want to provide some highlights about what has taken place in your legislature over the past few months.
2019 Legislative Session Overview
This year’s regular session convened on Tuesday, March 5, 2019, and adjourned promptly following Governor Ivey’s State of the State speech that same night, where she called for a special session on infrastructure. Following the completion of the special session, which adjourned on March 12, the legislature resumed normal business, adjourning sine die on May 31.
As we saw throughout the special session and regular session, the first year of the four-year quadrennium is always a busy time with new ideas and new opportunities to address challenges facing our state, and this year was of course no exception. The Public Policy Committee tracked a myriad of bills this session, monitoring all developments for legislative initiatives harmful to our members or their businesses. As an industry, this is one of the most important roles we play, and I am proud of the work we did this year both to accomplish our goals and to play “defense” against bad legislation.
2019 REALTOR® Related Bills
I’m delighted to note that we were successful in supporting several pieces of legislation that passed this session that are of particular importance to Alabama REALTORS®.
SB 208, sponsored by Sen. Jimmy Holley (R-Enterprise), passed the House of Representatives on May 2, 2019. This bill allocates proceeds from the sale of REALTOR® car tags to the Alabama REALTORS® Foundation. The Foundation will support disaster relief efforts throughout our state, will provide for other benevolent efforts for REALTORS®, and will offer educational scholarships for children of REALTORS®. We are grateful to Senator Holley for carrying this bill in the senate, and for Rep. Kyle South (R-Fayette) handling the bill on the House floor, as well as for Rep. Anthony Daniels (D-Huntsville) helping to move the bill across the finish line.
H.B. 338, sponsored by Rep. David Faulkner (R-Birmingham), passed the Senate on May 23, 2019. This bill will assist home purchasers in the filing of homestead exemptions, by allowing them to fill an affidavit to then be filed with the local tax official to claim their homestead exemption. The law formerly required home purchasers to wait until a recorded deed arrived in the mail before claiming the exemption in the county tax official office; this often occurs in the middle of a move or renovation project, causing many home purchasers to forget or delay filing their exemption. The completion of the affidavit at closing, as provided for in the bill, will help prevent such delays and remove one item from the often cumbersome new homeowner’s “to-do” list. Our thanks to Sen. Jabo Waggoner (R-Vestavia Hills) and Sen. Rodger Smitherman (D-Birmingham) for helping to move this bill in the Senate.
S.B. 90, sponsored by Sen. Clay Scofield (R-Guntersville) and H.B. 400, sponsored by Rep. Randall Shedd (R-Cullman) were two bills of major importance this session. Sen. Scofield’s bill expanded eligible grant areas for state and federal grants to fund broadband service. H.B. 400 authorized the installation and use of broadband and related communication capabilities by electric providers using their existing infrastructure.
The Alabama REALTORS® joined with other leading trade associations and business groups in our state to form the Alabama Rural Broadband Coalition. The purpose of this coalition was to support several pieces of legislation to expand broadband services to rural and underserved parts of the state.
These bills are going to significantly expand the internet capabilities of our state as a whole, which will in turn help bolster economic development and opportunity in those areas. That is great news for Alabama
2019 Notable Legislation
At the outset of this session, “big-ticket” items that were anticipated included an increase to the gasoline tax to fund infrastructure expansion, an increase in funding for prison construction, as well as the establishment of a lottery, broadband expansion, education reform, and the passage of the Education Trust Fund (ETF) and General Fund budgets. Several of the major initiatives we tracked this session (and will continue to track) require additional revenue to succeed. During discussions of additional revenue, we have remained and will continue to be vigilant against threats to real estate and efforts to balance funding requests on the backs of real estate professionals and/or property owners through increases in taxes/fees or removal of real estate-friendly tax deductions or incentives in the tax code.
As you may have heard, on April 2, 2019 the U.S. Department of Justice (DOJ) issued a report describing the horrendous conditions in our state’s prisons. State leaders wish to avoid protracted litigation and a federal takeover of the system, so they are continuing to meet with DOJ officials to find solutions. Thus, a special session dealing with prisons will likely take place in the fall of this year.
A summary of some of the major issues addressed during the 2019 Legislative Session is below:
Infrastructure funding was probably the most high-profile issue addressed by the legislature this year and will likely define legislative activity for the duration of the quadrennium.
Spearheaded by Governor Kay Ivey, State House Speaker Mac McCutcheon, and State Senate President Pro Tem Del Marsh, improving the state’s infrastructure to support existing industry and recruit new projects to the state in order to bring new jobs and new opportunities for Alabama was of paramount importance. Compared to the states that border Alabama and across the South Alabama has lagged in population growth, and there is a developing consensus that our state is in danger of losing a Congressional seat in redistricting. The loss of that seat would not only cause the state to lose representation in the U.S. House of Representatives, but would also affect federal support for the state in a variety of sectors.
To combat that problem, and to bolster economic opportunity for current and future Alabamians, Governor Kay Ivey led the way for our state to bolster infrastructure funding by supporting a 10 cent gas tax increase, graduated over three years and permanently tied the tax to a national index on highway construction costs that would allow increases only by one cent every two years. The increase is expected to obtain over $300 million per year when fully implemented.
Representative Bill Poole (R-Tuscaloosa) and Sen. Clyde Chambliss (R-Prattville) sponsored the Rebuild Alabama Act (HB 2) in their respective chambers. The bill passed the House on March 8thby a vote of 84-20, and passed the Senate on March 12thby a vote of 28-6. Governor Ivey signed the bill into law on March 12, 2019, and the bill was enacted as Act 2019-2.
Several proposed constitutional amendments establishing a state lottery system were proposed this session, but ultimately did not pass.
A constitutional amendment sponsored by Sen. Jim McClendon (R-Springville) would have established a state lottery to include electronic lottery games as well as traditional lottery tickets. The legislation would also have permanently legalized existing pari-mutuel wagering facilities using video bingo terminals. His legislative package would have allocated receipts between the Education Trust Fund and the General Fund. The amendment was not considered in committee.
Another constitutional amendment sponsored by Sen. Greg Albritton (R-Atmore) would have established a so-called “paper lottery,” only authorizing the distribution of paper lottery tickets for participation in intrastate and multi state (Mega Millions, Power Ball) games. Receipts from the legislation would have been allotted 75% to the General Fund and 25% to the Education Trust Fund. The legislation passed the Senate on April 25, 2019, but failed in the House.
It is possible another constitutional amendment establishing a state lottery will be brought forward again in the quadrennium, perhaps even next session.
The budgets are typically some of the most talked about bills in the session, but this year they actually passed with comparatively little fanfare. The $2.1 billion General Fund budget and the $7.1 billion ETF budget both contained increases in revenue over the current year. The education budget included a pay raise for teachers and administrative staff, and increased funding for all levels of education. The General Fund increased state employee pay by 2%, including a pay raise for employees of the Alabama Department of Corrections. This is the largest the ETF and the General Fund budgets have ever been.
Other Bills of Note
Other pieces of legislation that passed this session included a bill legalizing fantasy sports apps like FanDuel and DraftKings; a bill changing the way members of the state School Board are selected from being elected under the former system, to now being appointed; a bill setting up a commission to study medical marijuana; a bill prohibiting abortions in almost all cases; a bill exempting economic development officials from having to register as lobbyists; and a bill requiring public universities to adopt policies that promote freedom of speech on campuses.
Future Special Session for Prison Reform
As previously mentioned, the state faces a problem of overpopulated prisons that are crumbling, underfunded, and understaffed. Many prisoners are housed in squalid and unsafe conditions. Guards are often put in dangerous situations. Prisoners with mental and physical disabilities are given very few opportunities for adequate treatment. A federal judge has ordered the state to address these issues; failure to do so will likely result in a federal takeover of the state’s prison system.
Governor Ivey has put forward an ambitious plan to build up to three new prisons and provide adequate funding for prisoners with mental and physical disabilities. Given that the DOJ is heavily involved, this issue will become a main priority for lawmakers with the regular session now behind us. The Governor is expected to call for a special session in order for remedial legislation to be brought forward, likely to take place in September or October of this year. Our team will continue to monitor developments on this issue as solutions are discussed.
Consumer Awareness Campaign on First Time Home Buyer Savings Account Program
The Alabama First-Time Homebuyer Savings Accounts (FHSA) program was passed last year during the 2018 Legislative Session. It helps first time homebuyers save money toward the purchase of their first home through a tax-free savings account. Deposits and savings can then be used by a first-time buyer on the down payment and closing costs of a residence. These savings accounts will allow more people to experience the American dream of home ownership.
This spring, we launched a robust three-month consumer awareness campaign leading up to National Home Ownership Month. This is a great time for consumers in the market for their next home to learn more about the Alabama First Time Homebuyer Savings Account Program.
The campaign has reached over a million consumers in Alabama and has helped spur interest across the state. The program has also been well supported by banks state-wide that are or will be offering these savings accounts to their customers.
So while we were working for you in the halls of the Statehouse, we were also working for you to promote this important program with consumers. We are thrilled about the opportunities the First Time Homebuyer Savings Account Program will provide for consumers - and the opportunity for them to work with one of our great REALTOR® members to help them achieve the American dream of homeownership.
Again, it has been an honor to serve as the chair of the Public Policy Committee this year, and I am proud that we were successful in defeating bad legislation as well as helping to pass good legislation. The well-being of our profession, and the state as a whole, is better because of your participation in the process, and I am very grateful for the engagement of our members this year.
For further details on the ins and outs of this year’s session, our Alabama REALTORS® Public Policy Team published weekly updates from the State House in Capital News and Notes, which you can view under the public policy tab on our website, www.alabamarealtors.com.
Thank you for what you do, and may God continue to bless our great state.