Goat Hill Report- Week ending April 12, 2024

This week, the Alabama legislature completed Days 20 and 21 of the 2024 session. With a maximum length of 30 legislative days, this year’s session is over two-thirds complete and is expected to wrap up by early to mid-May. Details of this week’s action are provided below.

Budgets Move Forward

On Thursday, the Alabama Senate approved a record $3.3 billion FY2025 General Fund budget and a supplemental budget of $214 million for the current fiscal year. The FY2025 budget, which totals more than $300 million over the FY2024 budget, features increases for almost all of state agencies in it and provides a 2% raise to state employees. In Alabama’s two-budget system, the General Fund provides funding to all non-education functions of state government. Both the FY2025 budget and the supplemental budget bills were substituted on the Senate floor Thursday, and Senate Finance & Taxation General Fund Committee Chairman Greg Albritton (R-Atmore) included more prison construction money from the General Fund than previously proposed. Albritton’s district includes one of the two new prisons planned by the Department of Corrections. The state committed in 2021 through legislation to building two 4,000-bed men’s prisons in Elmore and Escambia counties. Price increases at the partially-completed Elmore County site have put that project’s estimated cost at more than $1 billion, leaving state leaders searching for more money for the Escambia County site in Albritton’s district. Between the two spending bills, there is about $400 million for prison construction. Chairman Albritton pointed out that, despite the attention to increased prison funding, overall this General Fund was the largest budget in history with no cuts for General Fund agencies – “everyone is getting at least the same or more than the current year,” he said. The General Fund and supplemental budgets now go to the House for consideration.

Meanwhile, on Tuesday the House Ways & Means Education Committee approved a record $9.3 billion FY2025 Education Trust Fund (ETF) budget. The approved budget closely tracks the proposed budget that Governor Kay Ivey sent lawmakers at the beginning of the session. Under the approved budget, ETF funding is split 68.2% for K-12 education and 25.6% higher education, with about 6% for other agencies. Mirroring the General Fund pay raise for state employees, the committee also approved a 2% raise in FY2025 for K-12 and two-year college educators, as well as support staff – which comes with a price tag of $104.5 million. The committee also approved a $651.2 million supplemental budget for the current FY2024, with notable items including: $51 million to start the recently approved school choice law that will allow some families to receive tax credits when attending private schools; $7 million for charter school capital improvement grants and funding for some 200 assistance principals in middle and high schools that have at least 300 students; $5 million to support struggling readers beyond third grade; and $20 million for a residential public high school in Demopolis focused on health care sciences. A third education budget bill approved by the House budget committee is HB147 – the proposed Advancement and Technology Fund – which is a one-time appropriation allocated to public schools and colleges based on their enrollments. The money can be spent on a limited list of expenses including capital projects, security improvements and technology upgrades. A total of $1.75 billion is available. Lawmakers don’t have to allocate funds each year and didn’t in 2023. Ivey recommended spending $700 million this year, but the House committee increased that number to $1 billion.

Tort Reform Legislation Update

At least one major policy issue is debated almost exclusively behind closed doors every session, and this year is no exception with the recent introduction of comprehensive tort reform legislation. SB293 by Sen. Arthur Orr (R-Decatur) and HB420 by Rep. David Faulkner (R-Mountain Brook) are companion bills that were filed last week and are being referred to at the State House as the “Lawsuit Fairness Act of 2024.” Fundamentally, the bills seek to address range of issues with a goal of increasing balance and transparency in Alabama’s litigation process. Elements of the proposal include reforms related to lawsuit financing practices, direct negligence protections, proper venue, and limits on non-economic damages – to name just a few items.

The legislative effort is being spearheaded by the Lawsuit Fairness for Alabama coalition – which is presently comprised of over 20 state-based trade associations. More information on the specifics of SB293/HB420 and coalition partners can be found at www.lawsuitfairnessforal.com. This topic is especially relevant as it has been decades since the last major tort reform war took place in the state. Business organizations have engaged in their fair share of “brushfire” battles with trial lawyers in recent years, but the call for more substantial action has been growing. The Lawsuit Fairness Act of 2024 comes at a time when sounding the alarm about the growing influence of plaintiff’s bar at both the Alabama Legislature and within the state’s court system – at both the circuit and appellate levels. With that said, it remains to be seen whether this year’s activity turns into a full-blown tort war. Advocates on both sides of the issue have been participating in closed door meetings for over a month, well prior to the introduction of the actual bills. If any progress is to be made on the proposed reforms in this session, the next two weeks will be critical; with each passing legislative day (and with only nine total days remaining), the chances are increasing that these bills will carry over into the offseason and ultimately the 2025 Regular Session.

Bills of Interest to the Concrete Industry

We are still awaiting final passage of HB 110 by Representative Bedsole. The bill increases the air mile range from 75 to 150 miles for drivers operating under the intrastate guidelines. The legislation has cleared the House and Senate committee and only needs a final vote by the Senate.

SB 266 by Senator Steve Livingston would require scales used to weigh trucks at permanent weight stations also include a 10 percent tolerance. Under current law, portable scales must add 10% for weighing trucks for potential tickets. However, a truck driver can request the truck be weighed at a permanent scale if desired. There are different interpretations on whether the 10% should be added for permanent scales. The legislation cleans up the current law to require the 10% be added no matter the scale used.

If you have any questions about this report, please contact our office.

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