2025 Alabama Legislative Update: Regular Session - Week Six

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Pharmacy Legislation 

This week, the Senate passed legislation, sponsored by Senator Billy Beasley, concerning pharmaceutical benefit managers (PBMs) and altering the mechanism in which independent pharmacists are reimbursed. Specifically, this legislation prohibits pharmacists from being reimbursed at a rate lower than the Medicaid reimbursement rate. This rate includes a $10.64 dispensing fee. The legislation also includes various provisions regulating PBMs and eliminates gag clauses between pharmacists and consumers. The legislation passed the Senate 32-0 after some changes were made, including altering the implementation date of the legislation and the sunset date of the legislation. This legislation now moves to the House for consideration.

Religious Released Time 

This week, the Alabama House Education Policy Committee amended a bill sponsored by Representative Susan DuBose concerning religious release time. A landmark Supreme Court ruling deems released time programs constitutional if guardians consent, no public funds are used, public school employees do not provide instruction, and private sponsors assume liability. Representative DuBose revised the bill to enhance its effectiveness and address the concerns of all stakeholders. Under current Alabama law, school boards are permitted but not required to implement released time instruction policies, resulting in many parents' requests for these programs being denied.

The bill now requires local school boards to implement their own policies allowing, but not forcing, students to attend off-campus religious instruction with parental consent. The adopted amendments, unanimously approved by the committee, clarify that local school boards may, but are not required to, award credit for released time instruction. Additionally, another amendment states that local school boards have the authority to develop their own policies to fit their needs and reflect their individual circumstances. Specifically, the second amendment states, “Nothing in this act may be construed to limit the authority of local boards of education to tailor the policies required by this section to meet their specific needs, provided the policy reflects the requirements of this section and complies with applicable law, rules, and regulations."

Representative DuBose emphasized the necessity of this legislation to provide parents with choices regarding their children's curriculum and to ensure equal educational opportunities for all students across the state. She stressed that the bill aims to provide consistent access to religious instruction, regardless of a family's location or their ability to homeschool or transport their children to off-campus courses. Currently, only twelve Alabama school districts offer these programs, but several more are under development. There is strong support for the implementation of these policies, with over 4,000 parental signatures requesting these programs in their local school districts. Thus, the availability of the programs appears to fall short of the demand.

Parental Leave 

This week, legislation, sponsored by Senator Vivian Figures and Representative Ginny Shaver, regarding paid leave for parents was sent to the Governor after passing both chambers. The bill allows for eight weeks of paid parental leave for female state employees and teachers and two weeks for male employees for the birth, stillbirth, or miscarriage of a child. The leave also applies to the adoption of children aged three or younger.

The bill received a favorable report from the Senate Finance and Taxation Education Committee this week and can now be considered for a vote by the Senate. This legislation passed 100-2 and has been sent to the Governor, a vocal supporter of the bill, for her signature. 

Athletic Classifications 

This week, the House Education Policy Committee gave a favorable report to a bill that alters how English Language Learner (ELL) students are factored into sports classifications for public schools. Sponsored by Representative Brock Colvin, the bill proposes that ELL students who do not participate in interscholastic athletics be excluded from the average daily membership calculations used for classifying schools in athletic competitions. Under this legislation, once the percentage of ELL students in grades 9-11 at a school hits 15%, those not participating in sports will be excluded from the classification calculations.

Supporters of the bill this legislation suggest that it levels the playing field by ensuring schools are classified based on athletic participation rates rather than overall enrollment. Representative Colvin has been a leading voice on this issue and has committed to maintaining an open dialogue with stakeholders. He has also voiced his openness to considering a sport-by-sport classification system, similar to that used by private schools. The bill now moves to the full House for consideration.

Overtime Tax 

This week, House Minority Leader Anthony Daniels filed legislation that would extend the overtime tax exemption, which was passed into law in 2023. Under the current law, overtime pay earned by a full-time hourly employee for hours worked beyond 40 in a week is excluded from gross income and exempt from Alabama state income tax. There has been some resistance to this legislation because of the higher-than-expected utilization and the impact on state budgets. However, Leader Daniels insists that any budgetary impacts are justified and that the extra wages earned by those utilizing this exemption are putting those dollars back into the economy.

Tax Relief Package

This Tuesday, the Alabama House of Representatives passed a notable tax cut package, sponsored by Representative Danny Garrett, that aims to reduce financial burdens on Alabamians. The four-bill package is projected to save taxpayers approximately $192 million annually.

The most discussed component of this package is a bill that reduces the state sales tax on groceries from 3% to 2%. Some projections indicate that this reduction is expected to save Alabama families a minimum of $236 per year. Representative Garrett emphasized that this measure is another step towards eliminating the sales tax on groceries entirely.

A second bill grants municipalities the ability to lower their own local sales tax on groceries. A third bill increases the amount of retirement income exempt from taxes, doubling the exemption for couples from $12,000 to $24,000 and for individuals from $6,000 to $12,000. A fourth bill raises the income tax thresholds, deductions, and child credits for those making less than $120,000 a year. Representative Garrett highlighted that these measures will provide broad-based relief to the citizens of Alabama.

Other Legislation to Watch 

• ALFA Health Plan: A more comprehensive version of legislation that proposes the creation of a new type of "health plan" that would be exempt from most state and federal laws and regulations, as overseen by the state Department of Insurance was filed this week. The Alabama Farmers Federation (ALFA) would be authorized to market and sell these plans and is the primary supporter of the bill. Critics argue that the bill lacks consumer protections, could allow denial of coverage for preexisting conditions, and would result in an entirely unregulated health plan product under its current language. Proponents argue that it is an alternative to traditional health insurance for farmers.

• Cannabinoid Legislation: A bill that aimed to make Delta-8-THC as illegal as heroin failed in the Alabama Senate. The proposed legislation, which sought to add Delta-8-THC and Delta-10-THC to the state's controlled substances list, was met with opposition. Lawmakers are now considering a revised version of the bill. 

• Workers Compensation: A bill to provide workers' compensation benefits to educators stalled in the House Ways and Means Education Committee. The bill, sponsored by Sen. Sam Givhan, aims to establish a Public Education Employee Injury Compensation Board and a dedicated fund for reimbursements. Despite objections from House Democratic lawmakers, the vote was delayed addressing concerns about the appeals process and other technical aspects

Status of the Legislature

The legislature used three working days this week, bringing its current total to 16 of its allotted 30 legislative working days. 

As of March 21, 478 bills have been filed in the House, and 268 bills have been filed in the Senate.

The legislature will not convene next week. The House will reconvene on Tuesday, April 1, at 1:00 PM, and the Senate will reconvene on the same day at 2:00 PM. Upon return, the legislature is expected to use two legislative working days.