2023 Legislative Update: Regular Session - Sine Die

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Overtime Tax Bill

The bill, sponsored by House Minority Leader Anthony Daniels, has passed in both chambers after changes by the Senate. This legislation excludes overtime pay from the 5% state income tax. The Senate introduced a provision that sets a cap of $25 million as the total amount of tax reduction each year. This $25 million cap was removed, and a sunset date of June 2025 was established via an executive amendment by the Governor and returned to the legislature, where it ultimately passed.

In the executive amendment, Governor Ivey stated, “Eliminating the $25 million annual cap will make the bill easier to administer for employers and potentially put more money in the pockets of the overtime wage earners this bill seeks to benefit . . . the earlier sunset date and reporting requirements will better enable the Legislature to monitor the fiscal impact of the overtime-pay exemption on the State's Education Trust Fund."

As noted in last week’s legislative update, this legislation is the first of its kind in the nation, and Leader Daniels received bipartisan support on this bill. 

Federal Digital Currency Prohibition

A bill sponsored by Senator Dan Roberts has passed both chambers and been sent to the Governor for her signature. Under this legislation, state governmental entities in Alabama are prohibited from accepting a digital currency issued by the United States Federal Reserve System or other federal agencies as payment. They are also prohibited from engaging in any testing initiatives to evaluate the adoption of this currency.

This legislation comes in light of a national dialogue regarding a “Centralized Bank Digital Currency.” Many policymakers fear that a centralized digital currency could cause privacy issues and lead to government-sanctioned surveillance of citizens and businesses. Similar legislation has been introduced in other states and in the United States Senate.

Ethics Commission Requirements

A bill sponsored by Senator Arthur Orr has passed both chambers and been sent to the Governor for her signature after the House changed the bill. Under this legislation, the Alabama Ethics Commission would be obligated to reveal exonerating evidence to individuals under investigation by the commission.

Coal Production Tax Credits

A bill relating to coal production tax credits, sponsored by Senator Arthur Orr, has passed both chambers and been sent to the Governor for her signature.

Under this legislation, the coal production tax credit could be applied toward income and utility services taxes. Individuals and entities that boost their coal production in Alabama would be eligible to claim the credit. Any unused credits could be carried forward for up to five years. The bill also includes sunset provisions and reporting guidelines to regulate economic tax credits.

Distracted Driving

A bill sponsored by Senator Jabo Waggoner has passed both chambers and been sent to the Governor for her signature. This legislation forbids individuals from holding a cell phone while operating a vehicle, expanding the existing law that bans texting while driving. An amendment by Representative Matt Simpson added language stating that individuals cannot be stopped by law enforcement solely for using their phones while driving but rather must be committing some other traffic offense in conjunction with cellphone usage.

Status of the Legislature  

The Legislature has used all of its allotted thirty legislative working days. This session, 524 bills were filed in the House, and 340 bills were filed in the Senate. 

The House and Senate will next reconvene in February of 2024 for the next regular session barring a special session called by the Governor.