CNN Week 11 – Housing Tax Credit, Property Tax Increase Cap, Living Shorelines and More

CNN Week 11 – Housing Tax Credit, Property Tax Increase Cap, Living Shorelines and More

Three days remain in the 2024 legislative session after both chambers adjourned last Thursday. Using two legislative days and holding committee meetings on Wednesday, the legislature had a busy week with a lot of discussion focused on the budgets, gambling and tax credits. Passage of the gambling bills hangs on a thread after the Senate failed by one on a procedural vote to garner the 21 votes necessary to pass the gaming constitutional amendment. Conversations are ongoing, but the end result remains unknown as we approach the likely last days of session this week. Continue reading for highlights from last week’s legislative activity!


Workforce Development – Workforce Housing Tax Credit

Supported by Alabama REALTORS® and carried by Rep. Cynthia Almond (R-Tuscaloosa) on the House floor, House Bill 346, passed out of a Senate committee last week. The bill grants tax credits to developers who build affordable, multi-family housing for low-to-mid income workers.

Administered by the Alabama Housing Finance Authority in collaboration with the Alabama Department of Commerce, the tax credit program would assist individuals earning up to 60% of the adjusted median income by offering non-refundable tax credits to incentivize the development of more affordable housing units. Developers receiving the tax credits agree to cap rent at a certain percentage of the local median income.

Workers in construction, retail, hospitality, entry-level healthcare, and other sectors earning between approximately $11 and $30 per hour are among those expected to benefit.

An amendment was offered to cut the total tax credits offered but the amendment was voted down in committee. The bill is now up for consideration by the full Senate.


Property Tax Cap

An Alabama REALTORS® call for action went out several weeks ago on HB 73, sponsored by Rep. Phillip Pettus (R-Killen). Alabama REALTORS® support the bill’s concept of a cap on annual increases to property taxes; however, several recent amendments need to be stricken from the bill. The objectionable amendments include a higher cap, to the tune of allowing increases near 50% over seven years and expiring the cap after only 4 years. 

The time to act is now. Alabama REALTORS® supports a permanent 5% cap on annual increases to property tax assessments for homes and business properties. 

We have one chance to strip the amendments on the Senate floor and convince lawmakers to amend the bill to provide actual relief. 


Budgets Close to Final Passage

The two budgets are nearing final passage as we wind down the 2024 legislative session. 

Education budget - The record-setting education budget of $9.3 billion passed the House on Tuesday. The budget is almost $550 million more than last year’s budget, and some items receiving additional funds include nearly $200 million for the state’s first-class pre-k program, an additional $1.5 million for the workforce development, $10 million for a summer food program, $50 million seed money for the new school choice act, and a 2% teacher pay raise for all education employees. The House voted to send the bill with Senate amendments to a conference committee. 

General Fund budget – The House passed the General Fund budget with a few changes – largely undoing the Senate’s changes to the governor’s version. The $3.3 billion House-version is largely taken up by two agencies – Medicaid and Corrections – as is typical. One focus in this year’s budget was mental health, with mental health funding going up $24 million. The General Fund budget awaits final approval by the Senate. 


Coastal Dredging and Living Shorelines

HB 215, sponsored by Rep. Jennifer Fidler (R–Fairhope), received final passage last week. The bill establishes a permit initiative allowing shoreline proprietors along the coast to conduct dredging and create living shorelines. Oversight of the program would be managed by the Alabama Department of Conservation and Natural Resources. Comments in the Senate committee were positive, with several Senators questioning whether the bill could be expanded to other parts of the state.

The bill is now ready to be sent to the Governor for her signature.  


Liquid Carbon and Pore Space Storage Bill Passes

A bill setting up a process for property owners to lease “pore space” for geological storage received final passage last week. HB 327, sponsored by Rep. Alan Baker (R-Brewton), would allow property owners to lease “pore space”, or areas underground that are sufficiently porous, to entities that seek to capture carbon by pumping liquid carbon into these spaces, which are extremely deep at over 8,000 feet underground. The areas in Alabama where this is even geologically possible is limited to counties in southwest Alabama. The program will be managed by the State Oil and Gas Board and follows many of the procedures for oil and gas. 

The bill awaits the Governor’s signature. 


General Contractors - Minimum Cost Increase Bill

HB 418, sponsored by State Rep. Mike Kirkland (R-Scottsboro) and carried by Senator Chris Elliott (R-Josephine), received final passage last week. The bill changes the minimum dollar amount required for a project to require a general contractor license. The current threshold is $50,000 and will increase to $100,000 under the bill.

The bill also exempts labor brokers or temporary labor providers from needing a general contractors license if they only provide temporary workers to a licensed contractor.

The bill awaits the Governor’s signature. 


Storm Shelter Tax Credit Passes

The Senate passed legislation sponsored by State Rep. Joe Lovvorn (R-Auburn) that extends a state tax credit of up to $3,000 for the construction of storm shelters until 2028.

Lovvorn, a former firefighter who played a pivotal role in rescue operations after a devastating tornado claimed the lives of two dozen individuals in Lee County in 2019, successfully enacted the initial tax credit, which was set to expire in 2025.

The bill was sent to the Governor’s Office for her consideration and signature.


Ranked-Choice Voting Ban

A bill prohibiting ranked-choice ballots passed the second chamber last week. SB 186, sponsored by Sen. Arthur Orr (R-Decatur), bans the use of ranked-choice ballots except for absentee ballots governed by the Uniformed and Overseas Citizen Absentee Voting Act, which largely governs voting by active duty military serving overseas. While ranked-choice voting has only one documented use in Alabama by a municipality, testimony on the House floor indicated that no current laws govern the area. 

The bill will be sent to the Governor this week.