The Alabama Legislature convenes today for Day 5, the first of an anticipated three day workweek. The pace of activity has been brisk as it appears the members desire to complete their work in an expeditious manner.
Each year, the legislature must address “sunset” legislation by the 10th legislative day. Sunset legislation involves evaluating the need to keep agencies, boards and commissions operational. If the legislature decides that one is not needed, they would simply not vote to extend it or, in effect, “sunset” it. The fact that the legislature is addressing these bills early is indicative of their desire to move quickly through the session.
The only other responsibility the legislature has is the passage of appropriations bills. At this point the General Fund Appropriations (SB125/HB104) and the Education Trust Fund Appropriations (HB117) bills have been introduced but only reflect the Governor’s plan. The legislative versions are expected to be substituted in committee. Currently no committee hearings have been scheduled to address the appropriations bills.
A couple of good tax incentive bills are making their way quickly through the process. SB131 creates an income tax for contributions to health savings accounts mirroring what is allowed by federal law. SB131 is sponsored by Senator Paul Sanford (R- Huntsville) and has been given a favorable report out of committee.
HB36 creates a tax incentive for a small business that hires new employees during the course of the year. Sponsored by Representative Kyle South (R- Fayette), the bill has passed the House and has been assigned to the Senate’s Fiscal Responsibility and Economic Development Committee.
Fuel Tax Increase
The plan to increase fuel taxes began its process in the Senate last week. The plan involves the passage of two bills; the first is an “accountability” bill that will determine how the new tax revenue is distributed and spent and the second will be the actual tax increase. SB180, sponsored by Senator Gerald Dial (R- Lineville), was brought up in the Senate’s Transportation & Energy Committee last Thursday. Dial’s bill would allocate 2/3 of the new revenue to the State’s DOT and 1/3 to local entities (counties and municipalities).
Senator Greg Albritton (R- Range) offered a substitute to SB180 that would; (1) distribute the new revenue at 55% to the DOT and 45% to the locals, (2) require any new tax revenues received by the counties to be used to replace/repair structurally deficient bridges first, and (3) allocates the existing diesel tax revenue at 55% to the DOT and 45% to the local entities (currently 98% goes to DOT). If adopted, Albritton’s Substitute would re-prioritize $62 million to counties and municipalities that currently goes to DOT, regardless if whether a tax increase is adopted. AFA is supporting the Albritton Substitute.
The second bill, increasing the fuel tax, is expected to be introduced in the House by Representative Mac McCutcheon (R- Huntsville) only after the Senate has passed the “accountability” bill. The tax increase being discussed is 6 cents/gallon the first year, an additional 3 cents/gallon the second year and an additional 2 cents/gallon the third year. The total 11 cents/gallon increase is equivalent to a $368 million increase.