CNN - End of Session Recap
April 19, 2022
2022 Legislative Session Wrap Up
The 2022 Regular Legislative Session came to a close on Thursday, April 7, when lawmakers adjourned sine die minutes before midnight. The session was fast paced with frequent use of three legislative days a week which are departures from the normal two, record budgets, a break mid-session for a special session on American Rescue Plan Act (ARPA) funding, and an early departure.
Tax relief and special projects were a big topic of discussion. Since estimated revenues for next fiscal year are high, budget discussions were generally positive with extra funds available for tax cuts, multiple education projects, and state employee and teacher pay raises, to name a few. Both budgets were at or near record levels with $8.2 billion in the Education Trust Fund (ETF) budget and $2.7 billion in the General Fund budget.
It is always interesting to look at bill statistics after the session. This year, a total of 873 bills, including 119 local bills and an unknown number of companion bills, were filed. Of these, 534 were filed in House and 339 in Senate. While this total is on the lower end of the spectrum, a low total is usual in an election year. Based on preliminary data pulled from the Alabama Secretary of State’s website, 298 bills became law, including 171 House bills and 127 Senate bills. Of the 298 bills, 72 were local bills, 17 were constitutional amendments, and 209 were general bills..
Alabama REALTORS® advocated throughout the session on behalf of real estate professionals and private property rights. Of the 873 bills, Alabama REALTORS® monitored 215, opposed 19, and supported 10. As usual, the most important aspect of advocacy was defending against bills adverse to these interests. None of the opposed bills passed the Legislature, while six of those supported passed, including the First-Time Home Buyer Savings Account Program Renewal bill.
Here are legislative highlights from the 2022 Regular Session.
REALTOR®-Supported Bills Signed Into Law
First-Time Home Buyer Savings Account Program Renewal: With support from REALTORS® responding to a call for action, the renewal bill for the First-Time Homebuyer Savings Account Program passed and was signed by the Governor. The bill made three primary changes to the Program: 1) extending it for five more years through December 31, 2028; 2) extending the length of time an account holder can save from five to 10 years; and, 3) bolstering the reporting mechanism to and data collected by the Alabama Department of Revenue.
Business Privilege Tax: A frequent topic in this year’s Capitol News and Notes articles, a bill to reduce the business privilege tax for certain businesses passed and was signed by the Governor. The fiscal note on the bill indicated that it will save businesses $23 million. The bill phases out the $100 minimum business privilege tax – decreasing it to $50 next year (2023) and $0 for 2024 and beyond. Currently, a graduated business privilege tax is paid by corporations, limited liability entities, and disregarded entities registered or doing business in Alabama, which is based on the taxable income of the entity with a minimum tax of $100, which equals $80,000 in taxable income (i.e., companies below $80,000 in taxable income automatically pay $100). The new law will reduce the tax for those who report less than $80,000 in income and bring it down to $0 for companies that do not report an income.
Broadband Package: A three bill package aimed at expanding broadband accessibility and speeds to underreached and unreached areas of Alabama passed the legislature. For several years, a Rural Broadband Coalition, including the Alabama REALTORS®, has advocated for the expansion of broadband within the state. The COVID-19 pandemic further emphasized the need, with many working from home and children needing access in order to participate in school. The three bills are a continuation of that effort. One of the bills is a constitutional amendment that voters will see on the ballot this year and, if passed, will allow local governments to provide grants from federal dollars to private companies to expand broadband.
Strengthen Alabama Homes Program Funding: HB 39, providing one-time and future funding to the Strengthen Alabama Homes program, passed and was signed by the Governor. The funding will assist the Alabama Department of Insurance, which oversees the program, in clearing the backlog of applications for the program. The program provides much needed grants to homeowners to fortify their homes against wind damage by using higher-strength materials.
AREC Sunset Bill: The Alabama Real Estate Commission (AREC) was up before the Legislature on sunset review this year. Most licensing agencies or departments are subject to the Sunset Review Act, requiring renewal by the Legislature once every four years or the agency or department will sunset or expire. AREC received a one-year renewal under Senate Bill 98, which passed and was signed by the Governor. With the one year renewal, AREC will be up for renewal next again in the 2023 Legislative Session.
Bills of Interest
Lead-Based Paint: For several years, Alabama REALTORS® has worked with the Alabama Department of Public Health (DPH) and others on revisions to the state laws on lead-based paint. The bill resulting from these discussions gives DPH more authority to enforce the current law and will better ensure the protection of children from lead-based paint poisoning in homes and childcare centers, while safeguarding the rights of property owners when DPH agents seek to review a work site. The bill allows DPH to fine contractors for violations, from $250 a day up to a maximum of $5,000.
Process Servers: A bill to bring process servers under the jurisdiction of the Alabama Board of Private Investigators was amended at the request of Alabama REALTORS® to exclude real estate licensees. The amendment protected agents engaged in normal real estate and property management services, like posting eviction notices, from hiring a process server or becoming a licensed process server themselves. Ultimately, the sponsor carried over the bill.
Tax Lien Law Changes: Alabama REALTORS® worked with the bill sponsor and stakeholders on bills dealing with tax liens. After productive discussions, a second bill was filed that was more friendly to private property owners seeking to redeem the tax lien. The bill makes several needed clarifications to the tax lien process but leaves in place the vital timelines and protections for owners who have gotten behind on property taxes.
Statewide Residential Building Code: One bill that did not pass would have established a statewide uniform residential building code in Alabama. The bill is intended to address the quality of building in areas of the state that are outside the jurisdiction of a municipality or other government body with a building code. The bill is likely to return next year.
Electrical Contractors License: The Electrical Contractors Board filed a bill that would require property managers and handymen to obtain an electrical contractors’ license or cease doing any electrical work. HB 357 would have made sweeping changes to the license laws affecting electrical contractors. Alabama REALTORS® opposed the bill for several reasons, including the large authority the bill gives to the Executive Director to issue subpoenas and the expansion of required licenses to include handymen and property managers, who can easily perform routine maintenance. Alabama REALTORS® worked with Board representatives to amend the bill, but a compromise could not be reached. The bill did not pass but will likely come up in the future.
Security Cameras in Shopping Centers: One bill would have required operating security cameras in businesses in a shopping center. Alabama REALTORS® opposed the bill, as it could have been a huge liability for businesses, commercial property owners and commercial property managers. The bill did not pass.
Home Inspectors Liability Limitation: Alabama REALTORS® worked with the Alabama Homebuilders Association to carry over a bill giving home inspectors more liability protection. HB 275 would give home inspectors the blessing of the Legislature to place liability limitations in their contracts with customers. While provisions limiting liability are already common in home inspector contracts, this bill goes too far for a group that already has limited oversight, no sunset provision and an extremely limited complaint process.
Agricultural Land Ownership Limitation: A Senate bill would have prohibited ownership of Alabama agricultural land by non-U.S. citizens or resident aliens. REALTORS® joined other groups in opposition to the bill. Before a Senate committee, Alabama REALTORS® shared three primary concerns with the legislation: 1) it would restrict an owner’s private property rights in limiting to whom an owner may choose to sell his or her land; 2) the bill openly discriminates against a federally and state-protected class in violation of the Fair Housing Act and Equal Rights Act; and, 3) the bill would have a chilling effect on economic development in the state at a time when Alabama is growing and attracting investment from across the country and the world. The bill was carried over by the sponsor in the committee meeting.
Tax Sales: Changes to the laws related to the sale of property for delinquent taxes is a frequent flyer, mainly due to the outdated and overly complex nature of the current laws. One bill filed this year would have allowed tax sale purchasers an indefinite time to file a quiet title action. Alabama REALTORS® opposed the bill for two primary reasons: 1) the bill would allow tax purchasers to allow interest to accrue at the property owner’s expense indefinitely with no incentive to move forward with a quiet title action, and 2) making piecemeal changes to the already complicated tax sale laws causes broader issues.
Wake Surfing: One Senate bill limiting wake surfing passed both chambers but failed after the Senate did not concur with amendments adopted by the House. SB 281 added statewide requirements for wake surfing, including a life vest for the surfer and a limit to how close to docks and swimmers wake surfers could practice their sport. Alabama REALTORS® has engaged on this topic for several years, as property owners protest the erosion to shorelines and destruction of docks caused by these boats that are built to displace large wakes for people to surf, often untethered to the boat.
Thank you to our members who participated this legislative session, whether at REALTOR® Day, reading Capitol News and Notes, through the call for action, or otherwise. We could not do this without you. Whether before the legislature or regulatory bodies, Alabama REALTORS® will continue to advocate for REALTOR® interests.