Capitol News and Notes: Week 1 – REALTOR® Supported Property Tax Cap Filed

Capitol News and Notes: Week 1 – REALTOR® Supported Property Tax Cap Filed

The Alabama Legislature kicked off week 1 of the 2024 session last week. Out of thirty, the legislature used three legislative days and filed 242 bills on a wide variety of topics. After Governor Ivey’s state of the state, only a few committees met, resulting in only two bills passing out of either chamber. Notable bills filed include a REALTOR®-supported property tax assessment cap, gambling bills, the school choice bill, and the governor’s budget bills. Continue reading for a summary of the week’s action, bills of note, and what to expect coming up.


Governor's State of the State

Governor Ivey gave her annual State of the State address on Tuesday of last week. The State of the State is used by governors to provide an update on the state and the administration’s yearly priorities. Gov. Ivey’s address followed these lines, highlighting priorities of creating education savings accounts to increase school choice, ensuring voting integrity, improving school safety, battling human trafficking, understanding artificial intelligence, continuing economic development initiatives of expanding broadband access and increasing workforce participation. You can find a full transcript of Gov. Ivey’s speech here


Property Tax Caps - REALTOR® Priority Bill Filed

For several years, the sharp rise in property taxes has caused an outcry among homeowners, especially those with fixed or low income. Increases of 100% or more are common in certain areas of the state. To prevent homeowners from being taxed out of their property, a REALTOR®-supported bill was filed to place a cap on annual increases. Rep. Phillip Pettus (R-Killen), filed House Bill 73, which will cap annual increases of the property tax assessment for homes and agricultural land at 3% and for commercial and non-utility owned property at 5%. These caps will prevent massive increases and encourage accurate and up-to-date annual assessments by tax officials. 

Listed as a Republican Party legislative priority, the REALTOR®-supported bill enjoys widespread support with over twenty co-sponsors in the House, including the Speaker of the House, Rep. Nathaniel Ledbetter (R-Rainsville), and is being pushed in the Senate by Lt. Governor Will Ainsworth and Sen. David Sessions (R-Grand Bay). 


Gaming Update – REALTOR®-Supported Language Included

A topic of conversation for years, this year’s iteration of gambling is a two-bill package totaling about 150 pages. One bill is a constitutional amendment that would allow gambling in Alabama, and the second bill, called enabling legislation, lays out all the laws on gambling. Included in the enabling legislation is REALTOR®-supported language that prohibits political contributions from those involved in the gambling industry. This language is intended to minimize corruption and provide a perceived and actual ethical backstop for the industry. 

The proposed constitutional amendment would allow a state lottery, a total of 10 casino sites (an additional 7 from the existing 3 owned by the Poarch Band of Creek Indians), sports betting, and a compact with the Poarch Band. Constitutional amendments require a 3/5s vote in each chamber before it will then be on the ballot for voters to decide. The governor does not sign constitutional amendments in Alabama. 

In addition to the REALTOR®-supported language, the enabling legislation establishes a gaming commission and a lottery commission to oversee the different types of gambling. Tax revenues would be split between local governments and the state, with revenues to the state from casinos and sports betting supporting the General Fund Budget and from the lottery supporting education.

This year, the gambling bills start in the House, after prior years’ efforts have stalled in that chamber despite passage out of the Senate. 


Mail Theft Bill

Theft of packages and mail, including checks, is a major concern, and Sen. April Weaver (R-Alabaster) filed a bill attempting to combat it. Supported by the Alabama REALTOR®, Senate Bill 8 would add the theft of items mailed or shipped to the list of crimes considered a theft of property. By law, the value of the package or mail determines the severity of the punishment. For example, stealing mail worth over $2500 is considered theft in the first degree – a class B felony which is punishable by up to 20 years in prison and fines up to $30,000. While the action is already criminalized, the bill is intended to increase a prosecutor’s ability to go after mail thieves. 


School Choice Bills Filed – Governor’s Initiative

Expanding school choice through the establishment of education savings accounts (ESAs) is a priority for Gov. Ivey and legislative leadership. Sen. Arthur Orr (R-Decatur) and Rep. Danny Garrett (R-Trussville), the chairs of the legislature’s education budget committees, filed companion bills to accomplish this goal. 

Called the CHOOSE Act (Creating Hope and Opportunity for Our Students’ Education), Senate Bill 61 and House Bill 129 allow the creation of education savings accounts for K-12 students beginning in the 2025-2026 school year. If enacted, the bill would set aside $7000 per student, or $2000 per homeschooler, to be spent on K-12 expenses like school tuition, textbooks, fees for after school programs or summer programs, and tutoring. Parents would receive the funds through refundable tax credits. The program would prioritize students with special needs and limiting eligibility to families at or below 300% of the federal poverty level, or just over $90,000 for a family of four this year. After two years, the bill opens eligibility to all students. 

The CHOOSE Act includes two measures discussed at length last year – standards for schools and testing. To receive funds under the program, a school must be accredited and agree to participate, and students must receive standardized testing. 

Read the governor’s press release on the bill here.  


Budgets Flat Except for Interest – Supplementals Likely

Budget projections for the current year are good although growth for this year and next is flattening from the prior years’ highs. As required by state law, Gov. Ivey sent to the legislature the two budgets funding state government for the 2025 fiscal year (October 2024 to September 2025) – the education and general fund budgets. The education budget funds education-related expenses, including pre-k-12 and higher education, while the General Fund covers state government operations. According to experts in the executive and legislative branches, state receipts for the current fiscal year (2024) are in good shape to cover costs in both budgets with a little extra. State revenues are relatively flat except for interest on state accounts which is up considerably due to high interest rates. Budget leaders are urging caution as growth moderates to normal levels and with the expectation of interest rates dropping if the Federal Reserve cuts the federal funds rates. 

Supplementals for FY 2024 - The legislature will likely have money to appropriate for the current year above and beyond what was originally appropriated last session. This occurs when the state receives more in taxes, interest and other avenues than budgeted, or appropriated. State law requires the legislature to pass a bill, called a supplemental appropriation bill, to spend the extra money. The education supplemental is expected to be about $600 million, with $100 million set aside for school safety grants and $50 million for ESAs, while the General Fund supplemental is expected to be nearly $200 million, with $100 million set aside to pay for the two new prisons and $20 million for the new State House parking deck. 



The Senate reconvened today at 2:00 pm and the House at 1:00 pm, and will be joined by REALTORS® in the State House halls for REALTOR® Day. At drafting time, the Senate is expected to take up a so-called ballot harvesting bill, or a bill to prohibit assistance with ballots except in narrow circumstances, while the House is expected to focus on the gambling package this week.