CNN Week 5 – Property Tax Cap Advances, School Choice Signed into Law

CNN Week 5 – Property Tax Cap Advances, School Choice Signed into Law

Remarkably, we are half-way done with the 2024 legislative session. Through 5 weeks, we have only 15 legislative days remaining before the last possible day of session on May 20. Last week, the frantic pace and tough issues like School Choice, DEI, and gambling spilled over into some tense moments on the House floor. The legislature is currently on a week-long break, followed by one week on and another week off. Expectations are that they will slow down to two-day weeks moving forward. 


Property Tax Cap Bill Advances

House Bill 73, setting caps on property tax increases, advanced out of House committee last week. Sponsored by Rep. Phillip Pettus (R-Killen), the bill limits to 5% increases on the assessed value for class II and class III properties. The assessed value is determined by multiplying the property’s appraised value (as determined by the county tax assessing official) by a percentage tied to the class of property. Class II property is business and commercial property and has an assessment percentage of 20%, while class III property - residences, agricultural and timber property – has an assessment percentage of 10%. 

The bill does not limit property taxes for new construction, improvements or properties that change ownership. A REALTOR® requested amendment allows for improvements due to damage or regular maintenance and excludes transfers among family members for nominal or no consideration. 

Little more was stated in the committee meeting to add to comments made in the public hearing two weeks ago, as reported on in CNN Week 4 here. Rep. Pettus did praise the bill as a way to provide certainty and stability amidst skyrocketing costs for Alabama’s homeowners and businesses. 

In light of opposition by counties, cities, and schools, the bill was amended to increase the class II property tax cap from its original 3% to 5%, bringing both classes in line. Despite the compromise, opponents of the bill continue to push for changes that would completely alter the method of property tax assessment and limit the effectiveness of the bill further. 

 The bill now goes to the full House for consideration. 


Online Auction of State-held Tax Delinquent Property Passes House

A bill allowing the state to auction off properties held by the state for five years after a tax sale passed the House last week with a unanimous vote of 103-0. HB 196, sponsored by Rep. Reed Ingram (R-Montgomery), would allow the state to hire an auctioneer and sell the properties in an online auction. To be clear, the state will only be selling its limited interest in the property (i.e. not clear title), and a quiet title action will still be needed. However, the auction would be a vital step in returning the properties to the tax rolls and in stopping the practice of the state purchasing properties left unsold at a tax sale. REALTORS® have supported this legislation for several years and added an amendment to protect the auctioneer from liability. 

The bill now moves to the Senate for consideration.


Proposed Changes to Home Insurance Cancellations

The House Insurance Committee awarded a favorable report on Wednesday to legislation by State Rep. Chip Brown (R – Hollinger’s Island) that requires insurance companies to provide written notice 30 days prior to canceling, reducing, or non-renewing property coverage.

“Suffering loss from a hurricane, tropical storm, or other disaster is traumatic enough on individuals, families, and business owners without having to worry about their insurance coverage being canceled at a moment’s notice,” Brown said. “This legislation will provide a much-needed measure of security and comfort to Alabamians during difficult times.”

House Bill 8, which includes exceptions for nonpayment or policy violations, now goes to the full House for consideration.


School Choice Signed into Law

The Alabama Senate gave final passage on Wednesday to school choice legislation that allows Alabama parents to receive the equivalent of the per pupil public school expenditure, roughly $7,000, to place their children in private schools, or $2,000 for homeschooling with a $4,000 cap.

Only families earning up to 300% of the federal poverty level - which equates to $90,000 for a family of four - initially qualify for the funding, but the proposal will open to any family regardless of income beginning in 2027.

Gov. Ivey, who made passage of the bill a major priority in her annual State of the State Address, signed it into law the Thursday morning after its Wednesday passage.

“At the end of the day, we all want every Alabama student — no matter the zip code, no matter the school — to receive a quality education,” Ivey said at her press conference. “Strong students will lead to a strong Alabama, and a strong Alabama is our goal.”

Known as the Creating Hope and Opportunity for Our Students’ Education Act, or CHOOSE Act, the measure was sponsored by House Education Budget Committee ChairmanDanny Garrett (R - Trussville) and Senate Education Budget Committee Chairman Arthur Orr (R - Decatur).


General Update – IVF, Gambling, Ballot Harvesting, and DEI

The legislature tackled and moved or passed quite a few other big issue bills last week. Topics ranged from IVF provider immunity, gambling, school choice, ballot harvesting, and DEI. 

IVF Provider Liability - An IVF provider liability bill passed and was signed by the Governor. The bill was filed after the Supreme Court ruled an IVF clinic could be sued under Alabama’s Wrongful Death statute in a lawsuit over the destruction of frozen embryos at the clinic. Under the terms of the bill, providers and those receiving IVF services, as well as manufacturers of related goods are immune from liability.  

Gambling Package – A significantly altered gambling package passed the Senate but must go back to the House for either a concurrence or referral to conference committee. Among other differences, the House version contained a lottery, sports betting, and up to 10 casinos, while the Senate passed version only contained a lottery and would allow dog racing and historic horse racing machines at the seven existing casinos in the state. The package is expected to be taken back up when the legislature returns next week. 

Ballot Harvesting - A Senate bill criminalizing the payment of individuals to fill out absentee ballot applications for someone else passed the House with amendments. Called ballot harvesting by some, the bill exempts individuals requiring assistance due to a disability or literacy challenge. The bill now moves back to the Senate to review the House changes. 

DEI – Another Senate bill that passed the House with amendments deals with diversity, equity and inclusion (DEI) programs in schools. Senate Bill 129 would prohibit state agencies, school boards, and public universities in Alabama from funding or conducting DEI programs. The bill passed along partisan lines and goes back to the Senate for consideration of the House amendments. 


Looking Forward

The legislature reconvenes next Tuesday, March 19, for its 16th legislative day. The House and Senate gavel in at 1 and 2 pm respectively. Current scheduling expectations are for only two legislative days on Tuesday and Thursday, with a committee day on Wednesday, which would mark the legislature’s first two-day week this session.