Goat Hill Report- Week ending May 19, 2023

This week, the Alabama legislature completed Days 21, 22 and 23 of the 2023 legislative session, leaving seven days in the 30-day session. The session is expected to conclude by mid-June. Details of this week’s notable action are provided below.

Anti-ESG Legislation Advances

On Thursday, the Alabama Senate passed a bill that would prohibit state contracts with businesses that boycott certain sectors of the economy based on environmental, social, and governance (ESG) standards. SB261 by Sen. Dan Roberts (R-Mountain Brook), is the anti-ESG legislation that has garnered significant attention from the state’s business community, with the bill sponsor touting it as the strongest anti-ESG legislation in the nation to protect investors and funds in Alabama. Sen. Roberts and his Republican colleagues said ESG standards promote a liberal agenda over returns and asserted that SB261 protects taxpayer money from being spent on liberal agendas and woke ideas. Senate Democrats argued the bill will hurt businesses in Alabama. The measure, which cleared the Senate on a party line vote of 27-8, is the Alabama version of a trend in conservative states targeting ESG-focused investing. SB261 would require companies doing business with state entities to provide written verification that the company will not participate in “boycotts” of timber, mining, fossil fuel and firearm industries. It would require similar confirmation when it comes to greenhouse gas emissions and stances on abortion and transgender care access. The bill now moves to the House of Representatives.

Space Command Decision in Doubt

Alabama’s state and federal political landscape was jolted by an NBC News report on Monday detailing possible plans by the Biden Administration to reverse the U.S. Air Force’s plans to relocate Space Command to Huntsville. NBC News quoted officials on background claiming that the White House’s plans were “all about abortion politics,” including Alabama’s strict abortion law and also U.S. Sen. Tommy Tuberville’s recent efforts to block military promotion votes in the Senate. Tuberville’s procedural move has been aimed at forcing the Pentagon to reverse its recently updated policy to pay for service members or their families to seek abortions in states with less restrictive policies. On the record, administration officials denied that Alabama’s abortion law had anything to do with the still ongoing official review of the Space Command decision. The possibility of reversing the decision to move Space Command to Huntsville follows two previous, extensive reviews that took place after President Joe Biden took office that found there was no improper political influence on the process that awarded the headquarters to Alabama. Just days before leaving office, Donald Trump had announced Alabama would be home to Spacecom’s headquarters. Trump later said he was “single-handedly” responsible for the state’s selection over others that were under consideration, which seemed to undermine the propriety of the Air Force decision, but the reviews of the process did not support his claim. Some U.S. military commanders also would prefer to keep Spacecom in Colorado, rather than uprooting it and interfering with space operations, according to U.S. officials. The officials cited the war in Ukraine and continuing military competition with China as needing operational continuity.

Budget Bills Face Final Consideration

Looking ahead to next week, the Legislature will re-focus its attention on the Education Trust Fund (ETF) and General Fund (GF) budgets – with both budget packages expected to be in committee on Wednesday and the floor on Thursday. The ETF package has already passed through the full House and the GF package through the full Senate, respectively. Representative Danny Garrett (R-Trussville) is in his second year as Chairman of the powerful House Ways & Means Education (W&ME) budget. On the Senate side, final deliberations on the General Fund will be being led by veteran Senator Greg Albritton (R-Range) – who chairs the Finance & Taxation General Fund (F&TG) committee. No major changes are expected to either of the annual appropriations bill for Fiscal Year (FY) 2024 – which begins October 1. Most eyes will be trained on the House as they address key bills impacting state revenue streams and the one-time use of surplus state funds. For example, Chairman Garrett’s committee is expected to pass HB479 related to a proposed 2% reduction in the state’s grocery tax. There are guardrails in the bill which would halt the reduction if the Education Trust Fund doesn’t experience growth in net receipts of at least 2% for the preceding fiscal year. Approximately 100 members of the 105 member House signed as co-sponsors of the bill.

Also on the House budget agenda will be the much debated and historic $2.8 billion ETF supplemental appropriation bill. Governor Kay Ivey’s recommended proposal for use of these funds created some political commotion earlier in the session which has since subsided to a large extent. The most significant hot-potato item is how to address a difference of opinion on the provisions surrounding individual income tax rebates. Currently, the price tag is capped at $275 million and is viewed by some as a drop in the bucket by some members of the Legislature – while others have argued for more of the excess dollars to be shifted into a savings/reserve account. In Alabama, consideration of the budgets by the second chamber is typically a signal that the regular session is approaching its conclusion. There are still a number of big-ticket general bills that remain to be considered after the budgets are sent to the Governor’s desk – and it will be incumbent upon House and Senate leadership to remain in lockstep as they seek to prioritize what to address in the four legislative days that will be remaining at that point.

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